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Right now in many parts of the country, homes are selling below replacement value.  In that environment, every home sold, is sold at a loss......even if you got the land for free.

The funny thing about that is that the more a builder sells, the more money the business loses.  Do you think that is why new builder executive compensation packages rewards units sold as a seperate metrix not including profits.  Executives are being incentivized to lose money.  Now that is capitalism at its best.  And analysts are recomending people buy the stock of those companies?

We are heading down a very slippery slope.  We are rewarding our business executives to destroy our nations wealth.  The spec building must stop and must stop now or TRILLIONS more will be lost.  It is criminal behavior when a foreign country dumps inventory in our markets.  We bonus our executives to for doing essentially the same thing?

As more foreclosures and specs come to market the downward pressure will continue.  As existing homeowners put their homes up for sale even more inventory will flood the market.  As the economy slows and people lose their jobs, there will be fewer and fewer buyers against a tidal wave of inventory flooding the market.

Until homebuilders stop building specs and dumping inventory at fire sale prices, the destruction of American wealth will continue for the foreseeable future.

Our nation is facing headwinds it has never faced before.  Leverage is at levels that will drown the best swimmers.  Money will be made by some and lost by many more.  How this plays out is anyone's guess......in the end there will be winners on CAPs and losers.  That is what they call a  market.  Good luck.

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