Goldman: Housing Prices Falling For Two Years

Goldman would say this report is only to generate trading ideas and you have to realize the firm may take opposite positions. Every long has a short.

So since GS says housing will be going down, I assume they will be betting that prices go up...

GS will bet that housing will go down and will also bet that housing will go and will "mysteriously" make tens of billions of dollars.

Meant to say:

GS will bet that housing will go down and will also bet that housing will go up and will "mysteriously" make tens of billions of dollars.

At least when someone like Hugh Hendry at Eclectica pushes an opinion you know his funds are taking that exact position.

Of course with REO inventory expected to peak next summer and gov't housing stimulus winding down. Goldman's piece is not that unreasonable....

lol, my estimate is down at the very least for 4 years. remember that the 2nd wave of foreclosures just kicked in, that's nice homes, not shacks. also from 2012 on there will be more sellers than buyers (more downsizing than new household formation). it's gonna be fun for those in the sidelines imho!!!

> Every long has a short.

Not really, unless one redefines short as "not long".

If you're at Goldman today and, you want to by a 10MM apartment, they will have your head. I can't imagine worse PR. So now all our poor 'richie-rich' Goldman kids can do is sulk over the amazing high end prizes that they can't touch. Hey!!! Here's an idea...If they can't buy them now maybe 2 years from now the smoke will be clear and they can buy the 10MM place without anyone giving a sh-t. Hey, maybe they could buy it for 8MM. That's kind of a short, don't you think?

I picture the guys at Goldman being a littl like in the movie Good Fellas..

Isn't she gorgeous? I bought it for my
wife. It's a coupe. I love that car.

What did I tell you?
I talked to you, didn't I?

Didn't I say not to go buy anything
for a while? The fucking car.

It's a wedding gift from my mother.
It's under her name. I just got married.

- I love that car.
- Excuse me for a second.

- I just got married.
- Are you nuts?

- Why are you getting excited?
- Are you stupid?

We got a million bulls out there.
Everyone's watching us.

It's under my mother's name.
It's a wedding gift.

I don't give a fuck.
Didn't you hear what I said?

Don't buy anything. Don't get anything.
What's the matter with you?

What are you getting excited for?

Because you're going
to get us all pinched.

> If you're at Goldman today and, you want to by a 10MM apartment, they will have your head. I can't imagine worse PR.

arent's GS people already in teh boards of the best buildings? i would be disappointed otherwise.

lawyers that work for banks sorry to say, should be considered like GS secretaries imho

Personally I think Goldman has just shorted the market - then they issue stories like this so people pile on to their trades. When I was trading stock GS would upgrade a stock and then GSCO was on the offer all day long selling. There was a different stock every day. They would give their big clients a head start - tell them that in 3 days they were going to upgrade Pets.Com - the clients would but thousands of shares. Then GS would upgrade the stock and the private clients would use the news to sell and take their quick profits. So again - I bet GS shorted the housing market over the last few days.

http://www.youtube.com/watch?v=glSN4qvjt2E

"So again - I bet GS shorted the housing market over the last few days."

come on!!! it doesn't take a rocket science to know that prices have to keep on going down. why not bet on it?

"come on!!! it doesn't take a rocket science to know that prices have to keep on going down. why not bet on it?"
No problems with betting on it - makes good business sense - my issue is that they will short it then publish these reports immediately after - it's their business model.

ummmm, you DO realize that there is a STRICT chinese wall between pro trading and research at ALL i-banks, legally, and that goldman would be CRIMINALLY liable and shut down by the SEC tomorrow if this guy treated there prop desks any different then he treated Fidelity or SAC, right? Or that Fidelity and SAC would NEVER do business with GS if they thought any of this were true.

In reality, this guy is ALSO treated by GS's prop desk the exact same way the DB, ML, UBS, or CS analysts are treated. Rudely.

"prop"

Here's my Goldman quote:
http://www.youtube.com/watch?v=Tk6DPq2_c2M

DO realize that there is a STRICT chinese wall between pro trading and research at ALL i-banks, legally,

Depends on what's going on, and it's not always that strict.

For Falcolngold1
http://www.youtube.com/watch?v=ONDZr840nkg

too good!!