Top investor sees U.S. property crash
Wed Mar 14, 2007 12:59PM EDT
By Elif Kaban

MOSCOW (Reuters) - Commodities investment guru Jim Rogers stepped into the U.S. subprime fray on Wednesday, predicting a real estate crash that would trigger defaults and spread contagion to emerging markets.

"You can't believe how bad it's going to get before it gets any better," the prominent U.S. fund manager told Reuters by telephone from New York.

"It's going to be a disaster for many people who don't have a clue about what happens when a real estate bubble pops.

"It is going to be a huge mess," said Rogers, who has put his $15 million belle epoque mansion on Manhattan's Upper West Side on the market and is planning to move to Asia.

Worries about losses in the U.S. mortgage market have sent stock prices falling in Asia and Europe, with shares in financial services companies falling the most.

Some investors fear the problems of lenders who make subprime loans to people with weak credit histories are spreading to mainstream financial firms and will worsen the U.S. housing slowdown.

"Real estate prices will go down 40-50 percent in bubble areas. There will be massive defaults. This time it'll be worse because we haven't had this kind of speculative buying in U.S. history," Rogers said.

"When markets turn from bubble to reality, a lot of people get burned."

The fund manager, who co-founded the Quantum Fund with billionaire investor George Soros in the 1970s and has focused on commodities since 1998, said the crisis would spread to emerging markets which he said now faced a prolonged bear run.

"When you have a financial crisis, it reverberates in other financial markets, especially in those with speculative excess," he said.

"Right now, there is huge speculative excess in emerging markets around the world. There will be a lot of money coming out of emerging markets.

"I've sold out of emerging markets except for China," said Rogers, long a prominent China bull.

Even in China, the world's fastest expanding economy, Rogers said stocks were overvalued and could go down 30-40 percent.

But he added: "China is one of the few countries in the world where I'm willing to sit out a 30-40 percent decline."

The last stock market bubble to burst was the dot-com craze which sparked a crash from March 2000 to October 2002.

When the last bubble burst in Japan, said Rogers, stock prices went down 85 percent despite the country's high savings rate and huge balance of payment surplus.

"This is the end of the liquidity party," said Rogers. "Some emerging markets will go down 80 percent, some will go down 50 percent. Some will most probably collapse."

"You can't believe how bad it's going to get before it gets any better," the prominent U.S. fund manager told Reuters by telephone from New York.

"It's going to be a disaster for many people who don't have a clue about what happens when a real estate bubble pops.

"This is the end of the liquidity party," said Rogers. "Some emerging markets will go down 80 percent, some will go down 50 percent. Some will most probably collapse."

It is going to be a huge mess

D.R. Horton Chief Executive Sees Trouble Through 2007


NEW YORK (AP) -- The chief executive of the nation's largest homebuilder by volume said Wednesday that 2007 would "suck" for his company, providing the clearest signal yet that a recovery in the battered sector is farther off than many thought.
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Speaking at an investor conference in New York, D.R. Horton CEO Donald J. Tomnitz said he expects to get more pricing power in 2008 but not before home prices continue their decline this year as builders try to sell the glut of houses currently on the market.

"I don't want to be too sophisticated here, but '07 is going to suck, all 12 months of the calendar year," Tomnitz said.

He said excess inventory, built up during a five-year boom cycle that saw land purchases and housing construction reach all-time highs, is the biggest problem facing the sector.

After months of declining prices and home sales, there were signs late last year that the market had reached bottom, prompting many to predict a recovery by midyear. But builders have had to keep curbing construction volumes and offering price discounts.

Tomnitz said Horton is currently building 26,000 houses, down 35 percent from its peak of 40,000, but further cuts are coming.

It is going to be "tough" for the Horton to reach its internal goal of 50,000 closings in 2007, based on the current construction figures, Tomnitz said. That would put 2007 closings below the year-ago level.

The executive said Fort Worth, Texas-based Horton has taken all the charges it could legally take to write down the value of undeveloped land and to forfeit options to buy land, but he did not rule out further hits to the balance sheet.

"We may have more impairments coming. We'll know that on a quarter-to-quarter basis," he said.

The charges are an admission that the company will not be able to develop properties for a profit, but they also free up cash for other purposes.

"The future is not as bright as we would like it to be, but we feel we're in a strong position going forward," the CEO said.

This isn't the first time Tomnitz has offered gloomy predictions for 2007. In January, Horton announced earnings had fallen 64 percent in the last three months of 2006. At the time, Tomnitz said the slowdown had begun in early 2006 and that the market would eventually bottom out this summer.

"We don't see anything on the horizon that would change that opinion," he said then.

Horton's net income for the quarter ended Dec. 31 plummeted to $109.7 million, or 35 cents per share, from $310.1 million, or 98 cents per share, a year earlier.

D.R. Horton shares fell 1 cent to close at $24.55 on the New York Stock Exchange. The shares fell another 16 cents in after-hours trading.

"I don't want to be too sophisticated here, but '07 is going to suck, all 12 months of the calendar year," Tomnitz said.

Hyper inflation: Alors qu'un mark-or valait 46 marks-papier en janvier 1922 il en vaut 84 000 en juillet 1923, 24 millions en septembre, 6 milliards en octobre et 1 000 milliards à la fin de l'année 1923.

Et les martiens ? Ils attaquent quand ?

Une hypothèse : la théorie du Ka-Poom !

http://www.itulip.com/retrospective2006.htm

Le grand danger pour les US [après le Ka déflationniste] est le jour où plus personne n'aura confiance dans le $ [Poom inflationniste], tous les $ imprimés et "électronique" vont arriver sur le marché domestique américain dans un espace de temps très court.

C'est ce qui s'est passé en Allemagne en 1873 lorsque les marchés étrangers ont appris l'abandon du Thaler d'argent (bimétallisme) au profit de l'étalon or, toute la confiance dans la monnaie d'argent a tété détruite, l'allemagne a vu tous ses Thalers (pays exportateur de monnaie) lui revenir dans les dents provoquant une inflation démesurée (il s'en est suivi un Krach)...

Ca pourrait arriver tu crois si les pays pétroliers abandonnent le dollars pour l'euro comme a voulu le faire l'Irak avant sa chute?