Wow- there's a lot of reality in that link if one is willing to open their eyes just a wee bit! Unfortunately, it mostly shows that many are completely oblivious to what is happening around them. While Mish has had it nailed for some time, it seems most of those involved in the industry are still somewhere between denial and blissful ignorance.
Even more frightening is the lack of appreciation for the fact that the same set of circumstances that gave rise to easy mortgage financing and rapidly inflating housing prices has also given rise to a global credit expansion that is about to collapse. In analogous real estate terms, while people are starting to notice cracks in the fresh sheet-rock, very few are aware that the river has completely undermined the foundation, and the house is about to be swept downriver.
But but but....we have Zune, Vista, and the $6 cup of coffee.
Bubble in Seattle?....rubbish! :twisted:
You'll have to cross $6 cup of coffee off the list.
Starbucks (nasdaq: SBUX - news - people )' stock sunk 90 cents, or 3.7%, to $23.20 in Friday trading. The Seattle-based company's stock has fallen almost 35% year-to-date.
"For the first time, the business is showing sensitivity to macro factors," said Bear Stearns analyst Joseph Buckley. Previously, Starbucks' sales and traffic seemed unyielding to macro factors and events that hurt other consumer businesses. Buckley attributes the new sensitivity to "the success the company has had in past years," which has broadened its customer base. Starbucks now serves a larger number of "blue collar, less affluent consumers who are more likely to react to economic pressures by scaling back visit frequency."
``People were telling me Boston and Seattle were OK,'' said Morgan, who recently visited both cities. ``I've got news for those folks. They aren't OK.''
The jabs have already landed squarely on the nose of the real estate market. The economy is starting to land body blows and a couple solid hooks. The fed's rate cut band-aid is not going to fix these wounds. And we're only starting round 2 of the bout. The market factors and inventory in this piece (which we all know about) are like solid right cross to the jaw of this housing market, which is tottering on its feet. I'm afraid that the impending recession might be the gut-punch that puts sellers of overpriced properties on the ropes, dropping prices by 15, 20% if necessary in 2008, as the housing slowdown gathers momentum. And it sounds like round 2009 will be even more of a bloodbath.
This is one bout I'm glad to be on the sidelines of. With a down payment sitting in cash, international stocks, and bonds, and a nice long lease signed on an apartment. I'm not sure the view from the "equity ladder" is very good right now.
Comments
Great blog link, deejayoh, Mish's has been added to my list!
Even more frightening is the lack of appreciation for the fact that the same set of circumstances that gave rise to easy mortgage financing and rapidly inflating housing prices has also given rise to a global credit expansion that is about to collapse. In analogous real estate terms, while people are starting to notice cracks in the fresh sheet-rock, very few are aware that the river has completely undermined the foundation, and the house is about to be swept downriver.
Bubble in Seattle?....rubbish! :twisted:
You'll have to cross $6 cup of coffee off the list.
Starbucks (nasdaq: SBUX - news - people )' stock sunk 90 cents, or 3.7%, to $23.20 in Friday trading. The Seattle-based company's stock has fallen almost 35% year-to-date.
"For the first time, the business is showing sensitivity to macro factors," said Bear Stearns analyst Joseph Buckley. Previously, Starbucks' sales and traffic seemed unyielding to macro factors and events that hurt other consumer businesses. Buckley attributes the new sensitivity to "the success the company has had in past years," which has broadened its customer base. Starbucks now serves a larger number of "blue collar, less affluent consumers who are more likely to react to economic pressures by scaling back visit frequency."
Starbucks Earnings: Not Grande
The jabs have already landed squarely on the nose of the real estate market. The economy is starting to land body blows and a couple solid hooks. The fed's rate cut band-aid is not going to fix these wounds. And we're only starting round 2 of the bout. The market factors and inventory in this piece (which we all know about) are like solid right cross to the jaw of this housing market, which is tottering on its feet. I'm afraid that the impending recession might be the gut-punch that puts sellers of overpriced properties on the ropes, dropping prices by 15, 20% if necessary in 2008, as the housing slowdown gathers momentum. And it sounds like round 2009 will be even more of a bloodbath.
This is one bout I'm glad to be on the sidelines of. With a down payment sitting in cash, international stocks, and bonds, and a nice long lease signed on an apartment. I'm not sure the view from the "equity ladder" is very good right now.