Adios Housing Bubble

The homebuilder and related stocks are in an “official” bear market.  For a short-seller it’s the perfect scenario, as the decline in homebuilder stocks has received little to no attention from the mainstream financial media.  The current bubble is a “price bubble” that was fueled by the $2.5 trillion of printed money dumped into the housing market by the Fed and de facto subprime mortgages underwritten by the Government (Fannie Mae, Freddie Mac, FHA, VHA, USDA).

Prices are beginning to fall in many markets and inventory is rapidly increasing.  Many of the new listings are flippers who soon will become desperate to unload.  This is how the mid-2000’s market collapse was triggered.

Meanwhile, the housing market stocks began to collapse in mid-2005 – an omen ignored most.  It would appear that history will once again repeat.  And the homebuilders have a long way still to fall:

My Short Seller Journal subscribers and I are making easy money shorting the homebuilder stocks. I called Hovnanian at the beginning of the year at $2.88. It’s currently trading at $1.53. The homebuilder stocks provide opportunities for profitable short term trades plus positioning for long term short-sell “investing.” In last week’s issue I discussed a strategy for navigating yesterday’s earnings reports for DHI, PHM and BZH. We are already making money on these ideas. You can learn more about this newsletter service here:  Short Seller’s Journal information.

6 thoughts on “Adios Housing Bubble

    1. Tell me what’s changed with AXDDF? Have you seen any news? I have not. It’s dropping in correlation
      with the price of gold/silver and the general poor investor sentiment toward mining stock. I assume
      you mean “new” AXDDF and not Azucar

  1. Jim Rickards has a new disciple, Mr Hemke.

    According to Mr Hemke the strong correlation between the Yuan and the dollar can only be explained by a manipulation of the price of gold by China.

    “This is not a correlation searching for a cause, nor is it a simple act of “traders” reacting to a falling yuan by selling digital gold. No, in a market the size of global gold, this type of sudden and direct correlation can only be accomplished through massive interventions, the size and scope of which is only possible at the state/sovereign level. And which state/sovereign would have a direct interest in linking the dollar price of gold to the yuan? China, of course. ”

    https://www.sprottmoney.com/Blog/potential-impacts-of-the-yuan-gold-peg-craig-hemke-24-072018.html

    In short, instead of selling their dollars on strength and buying gold on weakness, China do the opposite : They sell their currency and gold. They love dollars.

    http://gata.org/node/18405

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