Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles.
There’s an “ass” for every seat… and Wall Street is running out of chairs.
“All is well with the economy,” they once told us. “There’s a recovery underway, but it just won’t feel like one.”
The Great Recession ended in June 2009 when no one was looking. And people actually believe it — at least the dimwitted that live among us with short attention spans do…
“Ooh, a shiny penny.”
More than 70% of Americans think now is a good time to buy a home, according to a Fannie Mae survey.
And 78% believe home prices have either bottomed, or will rise next year.
What are they thinking? Better yet, what are they drinking?
Sure, home prices recovered over the last year… But that was thanks to an artificial stimulus known as “the home buyer tax credit.”
Plus, home prices were recovering from a boost in confidence, as foreclosure numbers dropped.
But let’s not be naïve here. Foreclosures only dropped because banks delayed the foreclosure process.
I don’t want to hear that defaults are down 30%. It only happened because banks weren’t sending out the notices of default, which they did to keep housing prices afloat.
Fact is, three long years and millions of foreclosed homes later, there’s still a wave of foreclosures headed our way — just as we’ve been warning readers about since the early days of 2007.
We’re nowhere near the end of a crisis that could cost us $1.5 trillion. Thinking we’ve bottomed is like thinking you’d survive a nuclear blast.
We’ve gone from one asset bubble, in which the Fed warned about irrational exuberance but did nothing… to another bubble (credit and housing), in which the Fed was implicit by keeping rates far too low for too long without regulation… to where we are now, witnessing the Fed blowing up yet another bubble.
Anyone that tells you housing has bottomed shouldn’t be giving investment advice. Period.
People are still losing their jobs. Resets haven’t finished. Foreclosures will mount even more than they already have. Without the home buyer tax credit, the government can’t prop up imaginary housing numbers any longer.
More than 25% of homeowners owe more than their homes are worth. This could result in more strategic defaults, which in turn will drive up foreclosure rates even more.
There is a tremendous amount of inventory on the market, and this will only grow as homeowners fail to pay their mortgages. With banks reeling from all the bad paper their holding, they’re not very motivated to lend money to people that could screw them later.
So what incentive is there to buy a house?
We still have these pesky resets that will hit very hard — and drop values further.
There are two more waves of resets on more than $1 trillion worth of Alt-A and Option ARM borrowers, many of which could easily face foreclosure.
Another 2.7 million delinquencies and foreclosures haven’t reached the market yet. U.S. home builders aren’t confident. And there’s a great possibility of another two million strategic defaults.
It’s ugly out there, folks… real ugly.
Given all the weakness in the economy and the glut of homes, it will take years to absorb millions of empty homes — a sobering thought when you account for worsening employment.
Housing is not bottoming out, as Wall Street would have many believe.
There’s much more pain ahead.
But as bleak as things seem, there are still profit opportunities out there. You just have to know where to look.
The editors of Wealth Daily and Energy and Capital do. Below, you’ll find some of the week’s best investment ideas.
Stay Ahead of the Curve,
Ian L. Cooper
Crude Awakening: Peak Oil: We’ve Been Lying to You
Editor Ian Cooper exposes the biggest lie we’ve ever told readers, and shows you how to turn the tables for personal gain.
Natural Gas Forecast: Peaked Production: Holding Out for Production… or Holding On?
Editor Keith Kohl reveals the natural gas crisis happening right now in Canada.
Four Ways to Play the Global Water Crisis: Water is the Next Oil
Editor Nick Hodge details water woes in a few corners of the globe before offering several ways for investors to profit.
Diesel Price Soars to $6.36 a Gallon: Energy prices and consumer behavior
Editor Jeff Siegel discusses the latest in electric vehicle development.
But Baby, I Can’t Find No Job: Money Goes Where It’s Wanted
Editor Christian DeHaemer explains why money goes where it’s wanted… and where smart investors might consider putting theirs in upcoming months.
Some Secrets Aren’t for Keeping: A Covert Meeting Backed by $54bil in Gov’t Cash
An unauthorized photo… A story buried by the mainstream media… Hushed meetings behind closed doors between a tiny American nuclear outfit and the Korean government… They could all add up to one thing: a $36,950 return on your investment in this energy company by July 2011.
The First $1 Trillion Stock: Who will win the race to a $1 trillion market cap?
Analyst Adam Sharp speculates about which stock will be the first to reach a market value of one trillion dollars ($1t). Contenders: GOOG, MSFT, AAPL, XOM, PTR.
Mongolia, The Saudi Arabia of Central Asia: Meeting the Mongolian Prime Minister in NYC
Editor Christian DeHaemer meets with the Prime Minister of Mongolia and the two largest investors in the country, among others. The details of this meeting reiterate what he’s been saying for a year now…
Your Latest Free Trade: Get In Before It’s Too Late
Most people think profiting from options requires years of investment experience or a seasoned stock broker… That’s why people are losing thousands of dollars, every day. Our in-house options expert has put together a FREE guide detailing an options strategy that’s so easy he’s calling them “automatic options.” Get in now while the gettin’s good.
Gold Fever: How Nevada Just Changed the Future of Gold Mining
As a tiny Nevada-based mining exploration company rewrites the rules on gold mining, and as the global economy gears up for what may be the biggest gold rush in history… this company’s timing couldn’t have been better.
Oil Price Fantasy – the True Cost of Crude: Persian Gulf Oil Costs $543.00 a Barrel
Editor Steve Christ looks at the true cost of oil and explains why the cost at the pump is nothing more than a fantasy.
Yukon Gold Stocks – Retaming the Wild: Geologists May Have Discovered the Source to the Yukon’s 200 Million Ounces of Gold
Editor Greg McCoach takes an in-depth look at Yukon gold stocks, beginning with the famous Klondike Gold Rush of the late 19th century.