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Countrywide CEO says housing slump has a year to go
November 14, 2006 (Reuters)
The slowdown of the U.S. housing market will last through 2007 as inventories are pared enough to prompt a change in consumer psychology, the chief executive officer of the nation's biggest mortgage lender said on Tuesday.
Mortgage lending has slowed as rising inventories in the housing market led to a "hard landing" for the industry after a decade of strong growth, Countrywide Financial Corp. (CFC.N: Quote, Profile, Research) CEO Angelo Mozilo said at a Merrill Lynch & Co. conference in New York.
"We have another year of adjustment, or transition" in the industry until consumers believe home prices won't decline, Mozilo said. "Various events will make the change take place and one of them is" a decline in available homes, he said.
Mozilo said he expects the industry will see lending volume grow progressively from 2008 to 2010 because of a build-up of demand. Until then, the industry will continue to consolidate and eliminate excess capacities.
AntiSpin: What a bunch of crap. Thankfully we have the iTulip WayBack Machine to instruct us on where we are in the denial cycle.
Let us return briefly to August 2002:
...for winning with his prediction the coveted iTulip Flying Pig award–the first, but not the last–since before the 2001 recession!
Congrats, Angelo!
November 14, 2006 (Reuters)
The slowdown of the U.S. housing market will last through 2007 as inventories are pared enough to prompt a change in consumer psychology, the chief executive officer of the nation's biggest mortgage lender said on Tuesday.
Mortgage lending has slowed as rising inventories in the housing market led to a "hard landing" for the industry after a decade of strong growth, Countrywide Financial Corp. (CFC.N: Quote, Profile, Research) CEO Angelo Mozilo said at a Merrill Lynch & Co. conference in New York.
"We have another year of adjustment, or transition" in the industry until consumers believe home prices won't decline, Mozilo said. "Various events will make the change take place and one of them is" a decline in available homes, he said.
Mozilo said he expects the industry will see lending volume grow progressively from 2008 to 2010 because of a build-up of demand. Until then, the industry will continue to consolidate and eliminate excess capacities.
AntiSpin: What a bunch of crap. Thankfully we have the iTulip WayBack Machine to instruct us on where we are in the denial cycle.
Let us return briefly to August 2002:
iTulip.com has consistently contradicted the consensus opinion of mainstream economists, who certainly spend too much time reading each other's nonsense and unanimously agreed:
- In 1999 that no financial market and economic bubble existed. Technology had created a high growth, high productivity, low inflation New Economy.
- In late 2000 that there was a financial market bubble, in fact the largest in history, but that no economic recession will follow its collapse.
- In early 2001 that the economy was maybe suffering a mild recession, perhaps related to a negative wealth effect following the collapse of the bubble. The mild recession would end and the economy was due to recover in the second half of the year.
- In early 2002 that the recession in the previous year had lasted only one quarter and the economy was due to recover strongly in the second half of 2002.
- Last week that the 2001 recession had in fact lasted for, well, three quarters rather than one as predicted in 2000 and reported up until last week. GDP growth in Q2 2002 was actually only 1.1% versus the 5% consensus estimate, so maybe the economy won't recover much in 2002. But not to worry, the pace of recovery will accelerate smartly in 2003.
Prosperity is just around the corner. Why anyone listens to these guys anymore is a mystery to us. iTulip.com gave a few of blue sky prognosticators the coveted iTulip.com Flying Pig Award.
The cheerful academic revisionist history of the 1930s post bubble period offered up by Schwartz and Friedman states that if only the Fed had done more or the government more that The Great Depression could have been avoided. But as Alan Greenspan himself said back in 1959, "Once stock prices reach the point at which it is hard to value them by any logical methodology, stocks will be bought as they were in the late 1920s–not for investment, but to be unloaded at a still higher price. The ensuing break could be disastrous because panic psychology cannot be summarily altered or reversed by easy-money policies." Collapsing asset bubbles always leave economic devastation in their wake. Witness the condition of the high technology industry, the center of this most recent asset bubble, now approaching a state of economic dysfunction, with rising unemployment and next to no job creation. Wishful thinking and ignorance of the dynamics of economic contraction set in motion by the collapse of asset bubbles dominates during the collapse phase, as the articles from 1929 attest.
iTulip QuickComment August 9, 2002
I'll also repeat the following advice from that Quick Comment:The cheerful academic revisionist history of the 1930s post bubble period offered up by Schwartz and Friedman states that if only the Fed had done more or the government more that The Great Depression could have been avoided. But as Alan Greenspan himself said back in 1959, "Once stock prices reach the point at which it is hard to value them by any logical methodology, stocks will be bought as they were in the late 1920s–not for investment, but to be unloaded at a still higher price. The ensuing break could be disastrous because panic psychology cannot be summarily altered or reversed by easy-money policies." Collapsing asset bubbles always leave economic devastation in their wake. Witness the condition of the high technology industry, the center of this most recent asset bubble, now approaching a state of economic dysfunction, with rising unemployment and next to no job creation. Wishful thinking and ignorance of the dynamics of economic contraction set in motion by the collapse of asset bubbles dominates during the collapse phase, as the articles from 1929 attest.
iTulip QuickComment August 9, 2002
If you bothered to read the Wall Street Journal article noted above, hoping to glean how the government is going to fix the stock market and improve your stock portfolio, locate the nearest white board and write 100 times, Bart Simpson style:
The government does not control the markets or the economy
The government does not control the markets or the economy
The government does not control the markets or the economy
The government does not control the markets or the economy
The government does not control the markets or the economy
I congratulate Countrywide Financial Corp. CEO Angelo Mozilo...The government does not control the markets or the economy
The government does not control the markets or the economy
The government does not control the markets or the economy
The government does not control the markets or the economy
The government does not control the markets or the economy
...for winning with his prediction the coveted iTulip Flying Pig award–the first, but not the last–since before the 2001 recession!
Congrats, Angelo!
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