very soon, we'll be experiencing a housing SHORTAGE of epic proportions

a housing shortage - yes, shortage - is coming. we are building the same number of houses in this country that we were building in 1959. we had 179 million people in this country in 1959. we have 310 million people now.

for better or worse, the fed has been given a green light, via the consumer price index, to take rates down to nothing. the banks should be eager to repossess and sell homes at these prices. not that i want that: i want people kept in their homes. but it is too late for that.

what matters is that supply will not be able to keep up with demand given that build, even with foreclosures. there are just too many households being formed. too many people who need homes. and too few new homes.

don't forget the inventory of homes that are unsold is really going to come down when people realize that they are looking at what they can get and nothing more. at this pace, the homebuilding complex of len, dhi, phm, kbh, ctx, spf and tol cannot be maintained.

it is NOT so low due to prudence. fdic chairwoman bair simply doesn't let defunct banks give more loans to builders. that's why it is shrinking, as the major homebuilders wouldn't know how to stop building to save their lives.

this housing starts number is thrillingly positive for the economy and the markets. it alone is enough to drive the market higher.