top of page
  • Writer's pictureJeff Matthews

How to Deflate a Housing Bubble

Editor’s Note: Given the current state of government oversight over our public capital markets, in which attorneys working for the SEC issue subpoenas for phone records of investigative journalists who dare investigate publicly traded corporations—as opposed to those attorneys going after the phone records, for example, of message board stock manipulators or corporate executive stock manipulators—the writer of this blog is no longer willing to speak his unadulterated mind. The following reflects the New, Always-Upbeat World of Free Speech which seems to be preferred by the same SEC that regularly shuts down hedge funds after the principals have absconded with the cash and which was unable to detect and prevent the collapse of numerous Bubble-Era companies, including Enron, whose former Chairman and former Chief Operating Officer are now on trial for allegedly hiding that collapse from public investors whom the SEC was supposed to protect, following the Hovnanian conference call yesterday.

“We are projecting margins to be lower than we have had for the last few years,” a very savvy member of the top-flight home-builder Hovnanian’s management team said on yesterday’s superb and highly upbeat conference call.

“Although it’s too early for a formal EPS projection for fiscal ’07,” the superlative management executive continued, “we expect to see a similar trend to what we are projecting this year—further reductions in gross margins offset by further gains in deliveries and revenues, resulting in an increased EPS.”

I have no doubt that this strategy—of homebuilders seeking to make up in volume what they are losing in price—will have the most salutary and beneficial impact on the current housing situation in the United States, which, in the New, Always-Upbeat World of Free Speech, I should describe as not a bubble but more a nice warm bath.

Jeff Matthews I Am Not Making This Up

© 2005 Jeff Matthews

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations.

5 views0 comments

Recent Posts

See All

Beware Elites Interpreting History

It has the slam-bang certitude of an indignant Tweet: “In an excerpt from his new book, Lincoln and the Fight for Peace, CNN’s senior political analyst and anchor [John Avlon] shows how racist elites

Donald Immelt?

“It became clear right away that my main role would be Person to Blame,” Mr. Immelt writes in his new book “Hot Seat: What I Learned Leading a Great American Company,” which will be published Feb. 23.



Stay up to date with an insider's look into The World of Wall Street.

Great! You're all signed up.

bottom of page