At first glance, I am sure you are calling me crazy. Perhaps the same people that were calling me crazy when I said we would have positive GDP growth this year. But again, let me prove you wrong. It will be easier to detail this in "example" form. I basically conjugated this after visiting a friends party for their kids this weekend.

______________________

1. Family is being f-closed on.

2. Family was still going to have a birthday party for their kids either way.

3. With the money that they are not paying the bank right now, they are spending on extra presents for their kids and extra food for adults at party (important)

____________________

Now, #3 is quite important, and this alone should tell you what I am getting at. It is the AMERICAN CONSUMER at its finest. While it seems totally outrageous that they would be spending more, they ARE! So this gets me thinking..

____________________

Foreclosures are GOOD FOR THE ECONOMY. We are weeding out the weak and the people that should have never have had this loan to begin with. Now I know certain circumstances apply in certain situations, but deal with me.

Now, using this same example. This Family will continue of course to spend well over their means, but they will be doing it in a RETAIL MARKETPLACE and NOT to a bank. This family will now be renting a house that is $300 cheaper a month, and YOU WANT TO GUESS WHAT THEY WILL DO WITH THE REST?.. Thats right, spend it irrationally.

In summation, NEVER DISCOUNT THE AMERICAN CONSUMER.

Multiply this by the number of homes being foreclosed on * .75 (the variable for the average american consumer) = BULL MARKET CONTINUATION TO ME

I look forward to an interesting debate if anyone would like to disprove my theory.

Dont worry, I can be quite persistent as well lol (as most know)

I know of at least 5 home owners who have not paid their mortgage since Jan 09 and at least 2 renters who went to court and do not have to pay rent to their landlords who are in foreclosure and can stay until they get kicked out.None are in imminent danger of being removed.Must be nice!

Then.. they...

KEEP SPENDING OVER THEIR MEANS

As I am sure they were in the first place (no offense of course)

Just have to say though, I wonder what they are going to do with those 7,500,000 homes that are empty right now.

Probably just bulldoze them to keep the prices from going where they should be.

Yes, my sister is thinking of squatting at her house until they boot her. She owes 10% more than the house is worth.

Unless they destroy these houses, I believe the tailspin will be unstoppable in the housing market.

Those latest numbers of homes sales only reflect what has happened in the south. Everywhere else the sales are still declining at 10-20%. e.g. Midwest home sales last month dropped 16%.

Not very many things are indicating any, and I do mean any real across the board recovery.

My .02

Let me add -

Home sales DO NOT MATTER IN THIS INSTANCE

We are looking for families that are/been foreclosed on, and spending the rest of their usable income the "american" way.

Yes, I spent 5 of the last 6 years in California building projects for a land development company.

When I started we were building a lot of Custom homes. Than we started to build a lot of Apartment complexes. Than a lot of Commercial sites.

The pendulum was swinging back to apartments for the very thing you are talking about.

I talked to the company a few weeks back. The last 2 apartment complexes are only at 65% load.

It takes a 80% minimum load to break even. Their is just a huge glut in the market for all of the different types of buildings. The people that own them cannot afford to drop the rates on these units or they lose their shirts.

It is still in freefall. Yes, some green shoots. But money can only be wrung from destruction of a business or economy so much.

The micro outlook is great, but the macro for our economy is still a dire thing. We must be able to produce jobs to create the upward climb of the economy. If their are no consumers, you cannot produce anything.

Hence the markets overall in the Construction, Homes, Rentals, and Commercial buildings sales and such is still in freefall.

The only ones that will make it out will be the ones that owe nothing.

Jobs are lagging indicators.

I cant argue with the feeble state of the economy, but we ARE GETTING OFF TOPIC.

The topic is I believe rising foreclosures are good for the economy because of the stated reasons. Would you agree with my theory disregarding all the other things that are happening in this world? I know this will get off topic from the start, so I rather not at all.

Yes, actually your theory is quite innovative in its inception.

Think about it, instead of a bank(which right now will just sit on that money) getting the mortgage payments, the money will flow into more fluid markets.

Yes this will help. I do not know how much.

But one thing is for sure. That money not flowing into the bank's bottomless pits will help.

edit to add-sorry about wandering off grounds

[edit on 11/30/2009 by endisnighe]

Oh, not disinfo. Did you know about the 30% give away on home improvements that increase the energy efficiency of homes?

I have done 3 projects in the last 3 months.

People are replacing windows, doors, and doing insulation installation.

The markets are still being manipulated by government infusion of cash into the economy. Of course the latest one(this home efficiency rebate), the cash or loan(which 2 of the 3 people got their money from) is coming from the people and to be rebated from their income taxes. I hate to see the end result of taxes collected come April 15th next year. These purchases moved from future sales may be a bitch come next year. The Japanese economy tried all of these things a few years back. It delayed their recovery. I read a couple articles on their problems a little while ago.

Total GDP, I wish we could see the raw numbers they get their aggregate numbers from.