Replies to post #402412 on Zeev's Turnips Patch-No Politics (ZEEV)

[ogm]

Yep. VIX is about to go red again :) VXO already red. Astounding complacency.

[steviee]

Housing markets show signs of bust: Fannie
By Robert Schroeder, MarketWatch
Last Update: 1:57 PM ET June 20, 2005
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WASHINGTON (MarketWatch) - The possibility of a housing bust has "risen sharply in certain parts" of the U.S., thanks to a number of conditions including easier lending standards, a Fannie Mae executive said.





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In a presentation prepared for a National Association of Home Builders meeting May 5, Fannie Mae's (FNM: news, chart, profile) Thomas Lawler said housing-market conditions in many areas mirror past conditions that preceded regional housing busts. Lawler is senior vice president for risk policy at the housing-finance giant.

Fannie Mae did not release a copy of Lawler's presentation to the public when it was given. The Wall Street Journal on Monday first reported on the 34-slide presentation. The data Lawler presented include material collected by the Federal Housing Finance Board, the Office of Federal Housing Enterprise Oversight and Lehman Brothers, in addition to Fannie Mae.

The report noted that no one can tell if a housing bubble exists until after the fact.

Lawler said a number of lending patterns over the past year are similar to those seen in the late 1980s, the "boom" of the most recent "boom/bust" cycle. Among those patterns are increased buying by investors, "unrealistically high consumer expectations" that home prices will rise, "creative, riskier financing" for homes and a higher share of adjustable-rate mortgages.

Last week, Fannie's top economist said he sees home prices moderating and that there is a chance home sales will decline in some parts of the country in 2006.