As usual, Congress has dropped the ball, and we all lose. Commercial real estate is showing real signs of stress, and residential housing, which I think bottoms this year anyway (although at lower prices than would have occurred had we executed this correctly), is still terrible. So what does Congress do? It adds $500 to a tax credit for first-time homebuyers. Are you kidding me? What a damn joke!
I will simply come out and say it: These guys are idiots. They haven't a clue about what's ailing the system. Not a clue. It is real estate! And now it may well become unemployment. The mainstream doesn't get this at all. The New York Times' front page: "It is a quick, sweet victory for the new president and potentially a historic one." Huh? Who edits that BS? That's extraordinary.
We who actually follow the economy know the stimulus package is a total joke. How do we know that? We read. We all know that unless more jobs are created, the mortgage businesses of WFC and BAC will be much worse off (the C balance sheet is being sunk less by residential mortgages than others, but it is ugly). We also aren't even dealing with the failing home equity lines.
It is really easy to see how things can't turn around. I expected more from Congress, which puts me distinctly in the moron category. This news is terrible. I can't sugarcoat it.
The only silver lining is that they didn't give the homebuilders like TOL and LEN and DHI and PHM and KBH the credit they wanted for new homes. Hopefully that will make it so supply isn't added.
But will it matter? The foreclosure numbers show that supply may be added this month once the forbearance expires. The stimulus package has come and gone.
It was no help whatsoever for the pressing problems of this economy.
Shameful and stupid.
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