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ace, IMO David Lereah is a paid "shill" for NAR who has been right about the depth and duration of the decline in the residential housing market on zero occasions, since it began in some areas of the US in Sept., 2005.

The february "numbers" do not reflect the impact of the severe tightening in mortgage qualifying ability of more current and future "refi" and new mortgage applicants, than you can possible imagine yet, ace....but it's coming:

IMO, this is over....The "home builders", consumers, recent home buyers, those who "maxed out their home equity in serial "refis", and the US economy are "dead men walking". The "lending model" could only be sustained if residential property rose in value. Mortgage applicants who would never be approved for loans in a no or low appreciation price environment, drove the demand, along with speculators and 2nd home buyers, and initial scarcity of "for sale" inventory, drove up price and eventually an overbuilt, excess inventory.

Now, in a declining price environment, formerly credit worthy folks, enriched on "cash out refinancing" on 3 or 4 occasions in the last 5 years as their home equity, on paper, rose, speculated on second home purchases, refied their credit cards and car loans into their newest refied mortgage, extracted "MEW" of $800 billion in 2005, and spent it into an economy that grew briskly, because of this "one time", escalating stimulus.

Now, it will all unwind....the US Congress can only push for tighter terms on all borrowers, and all will be required to meet lending restrictions that will only qualify those capable of making payments at 30 year, conventional, principle and interest, with insurance and tax payments also factored.

PEOPLE!!! THIS IS NOT A "PROBLEM" CONFINED TO SUB-PRIME BORROWERS....
IT IS A LIQUIDITY TRAP THAT WILL TRIGGER A HUGE WAVE OF FORECLOSURES AND A DOWNWARD VALUATION SPIRAL THAT WILL BE INVERSELY PROPORTIONAL TO THE "UP" PRICE MOVE:

Other examples: DOW 30 Index, Sept. 1929= 393
DOW 30 Index, July 8, 1932= 41

Nasdaq 2000 Index, March 10, 2000= 5132
http://finance.yahoo.com/q/hp?s=%5EI...=15&f=2000&g=d
Nasdaq 2000 Index, Oct. 10, 2002= 1108
http://finance.yahoo.com/q/hp?s=%5EI...=15&f=2002&g=d

Nikkei 225 stock index, Dec. 29, 1989= 38957
http://finance.yahoo.com/q/hp?s=%5EN...=31&f=1989&g=d
Nikkei 225 stock index, Apr. 3, 2003= 7603
http://finance.yahoo.com/q/hp?s=%5EN...=30&f=2003&g=d

The "good news" is that residential property valuations will not revert to a low of 20 percent of their former highs, but a decline of 40 to 50 percent from the 2005-2006 prices in the areas of the country with the most intense speculative bubbles, is, IMO, a high probability event, and it will be achieved in span of the next 3 to 15 years. The Nasdaq is still less than half way back to it's high of March, 2000, the Nikkei is still below half of it's Dec., 1989 high, and the Dow 30 index did not revisit it's 1929 high again, until 1953.

YOU MIGHT THINK THAT IT IS "DIFFERENT THIS TIME", but it never is....never has been...HUGE BUBBLE...liquidity crunch..HUGE DECLINE....EVERY TIME....

Disclosure: Sold KBH short at $49.00 in AM pre-trading yesterday, before it announced that it's unsold backlog increased, and that "earnings" dropped from $2.00+ in the comparable year ago qtr, to .36 cents, last Qtr.

Stock closed at $47.25. Short sold an equal amount today at $48.32, after the "new home sales", 10:00 am report, briefly spurred up the KBH price.

Did a "cover buy" trade, out of yesterday's KBH short position....paid $46.51 today.... $249.00 gross profit on each hundred shares in that trade.

Still short today's shares, borrowed and sold at $48.32

Bought <a href="http://finance.yahoo.com/q?s=QFWPC.x&x=23&y=16">put contracts</a> on stock symbol LEND today, paid $3.40 each, and I think that this was a "gift", since they are contracts to sell LEND at $15 with
April 21, 2007 expiration, and LEND was $12.40 when I made the trade.
LEND is at $11.95 at this moment, it has traded below $4.00 in the last two weeks, and below $9.00 earlier this week. It had to pledge all of it's assets to obtain a "loan" at 13 percent interest, last week. It is selling billions of loans that it already made at .95 cents on the dollar, or less. Each billion in loans sold, costs LEND at least $50 million. LEND is BK, IMO, trading up on misguided sentiment....

Just sold CFC (Countrywide) short, as I was writing this.... at $36.65 per share. I bought (after Icahn made "noise" about a "plan" to buy at $22.00) <a href="http://finance.yahoo.com/q?s=wcire.x&x=63&y=15">put contracts</a> on WCI that expire in June at a strike price of $25.00.... I paid $3.20 and WCI trades now at $22.41 ....WCI is stuck with a huge inventory of unsold So. Fla condos....has stopped building new towers, and has laid off more than 2000 since November. The stock price is "propped up" by "noises" made by Carl Icahn...he hold a 15 percent position in WCI and sez he "might" tender an offer at $22.00 for each outstanding share. I view the current valuation at less than $10 per share....with a BK filing possible in the next 12 months:
http://wci-cancellations.com/

Icahn issued his PR, 8 days ago, ace....so far, no followup. This will resolve by the third friday in June, and WCI will tank if Icahn is posturing. If he is willing to pay $22.00 per share for this "dog", I'll lose $320.00 (100 x $3.20) per June put contract....if he only issued the "plan", PR, so that folks who followed him into WCI could get a 4 point "bump" to sell their shares into, then I'll do okay.

The point, ace...is that I'm puttin' my money where my mouth is. They'll be tough days....like the post Fed, non-announcement "melt up" of the stock indexes,two days ago....but they were shorting opportunities....there has been no "follow up" from stock buyers, since.....