Housing, expect at least a 0.25% rate cut from the FED

Another Horror Story: Pulte Homes (=one of the biggest builders in the USA)
10/26/2007 11:10 AM

A month ago I went on national television and said not to buy real estate, that you would lose money.
Wednesday night Pulte (PHM - commentary - Cramer's Take) confirmed that thesis. There isn't an area in the country that is doing well. It's just that some areas are doing more poorly than others.
That conference call Thursday morning was another unreal number. During something like that, you sit there and think of the positives: didn't lose as much as they thought, cutting home prices and in some areas you sell more.
But you also think about how it doesn't matter how low you go in others, particularly the dreaded Inland Empire, which I talk about ad nauseam because it has surpassed Fort Myers, Fla., as the worst area in the country; no sense of bottom anywhere, and areas they thought had bottomed just dropped again. How about the fact that each month was worse and that having a down payment on a $300,000 home is now beyond the reach of many Americans?
I listen to this stuff and I see the price of corn and the price of oil and I think, "This is what is trumping relief from the Fed?" I listen and I think, "Does President Bush bother to hear any of this stuff?"
It is so bad. So dreadful. Now, you know my view: Few of these companies survive or thrive and they can't be owned for anything other than 100 basis points worth of cuts and short squeezes.
Meanwhile, they are still building houses, houses they can't sell. It never ends. Sure, they have cut back, but they aren't cutting back in a way that will come near denting inventory in this environment. They can't control themselves; they have to build to monetize the land.

Go read the transcript of that conference call. You will come away shaken. Just shaken.

Jim Cramer