Wednesday, November 15, 2006

Countrywide Says: Expect 12 More Months of Bad Shit Happening

CEO Angelo Mozilo (a.k.a George Hamilton) of Countrywide Financial Corportation, predicts hard landing for housing market and another 12 months of "market adjustment":

"We have another year of adjustment, or transition" in the industry until consumers believe home prices won't decline. Various events will make the change take place and one of them is "a decline in available homes".

A decline in available homes?

OK, but ah...wait a minute. For a decline in available homes, we need to sell those available homes, so that they're not available anymore. Right?

How does one sell available homes when they are perceived to be overpriced and consumers consider home values to be on the verge of even greater decline in the future?

Since inflation remains pretty much unchecked, what happens should the Federal Reserve raise rates in the future?

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