Sunday, August 20, 2006

aus dem innenleben eines homebuilders

das ist ein kommetar von nic c aus dem comments sektion von mishhttp://globaleconomicanalysis.blogspot.com/. freue mich schon auf die angekündigten updates.


I just got off the phone today with one of my best friends. He is a senior executive in finance at one of the large public homebuilders and is based on the east coast in one of the prime bubble markets (I don't want to give any specific info about him for obvious reasons).

Up until the spring, he was totally a "company-line" kind of guy. You know, things are great, and getting better by the month. He told me that as late as February, they were still giving each other high-fives at corporate when all the finance VPs were giving their numbers.

When I talked to him today, it was a COMPLETELY different story. He told me that business has just dropped off the cliff. He said that his market is "absolutely brutal" and they just can't believe how fast it all happened.

He said that the media and the markets are about 6 months behind what is happening on the ground.

Last year, we got into a friendly debate on the market and he couldn't believe that I was bearish on housing. I told him to be careful of "investors" as the builders would soon be competing against their own products. He listened but blew it off. Today, he told me that I was not bearish ENOUGH.

He actually told me that I was write to short the homebuilder's stocks and that it is probably smart to continue doing until the markets price in the full effect of the new market conditions.

He also told me that they are already talking about "retention bonuses" for senior management (that was shocking - even for me to hear as I am from Detroit originally and that sounds like Delphi/Ford type talk) and layoffs for some of the staff/workers. A year ago, a lot of people would have given their left nut to work at this company.

I couldn't believe how down he was about business, my other friends used to joke about how he was drinking the kool-aid at work. It seems like somebody finally took away the puch bowl.

I know that a lot of my fellow bears will take delight at my friend's situation, but he is a really nice guy who works like an animal to get ahead and take care of his family. He is not some sleazy realtor type, just a smart, solid finance guy who happens to work for a builder.

On the other hand, don't feel bad for him either. He has been on a gravy train for 5 years and has taken full advantage of it. And even if things get bad at his company, he can always just get a new job.

btw/ I am trying to get him to write an anonymous commentary and give it to Mish to post on the site. I'll see if I can convince him to do that.Also, pretty funny that when he and his wife bought a house a couple of years ago, they didn't buy one from his company. A telling sign that I didn't let him forget about. LOL


auch hier ein beleg mehr das anscheined im zwietn quartal der total ungebrmeste aufprall in voller wucht eingeschlagen ist. ende 2005 und anfang 2006 hieß es immer noch das das geschäft im spring/frühjahr erneut anspringen würde und diese "springrally" die ersten schwachen monate vergessen lassen würde. pustekuchen. in der saisonal stärksten verkaufsphase hat sich der abschwung gar noch beschleunigt.

gruß
jan-martin

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