Is Warren Buffett Signaling a Housing Recovery?

by Robert Williams, Publisher Thursday, November 5, 2009

Warren Buffett is teaming-up with Goldman Sachs as the investment bank attempts to buy $3 billion of tax credits from taxpayer-owned mortgage firm Fannie Mae.

According to The Wall Street Journal, investments in low-income housing tax credits has waned dramatically in the face of the credit crisis.

Credits are being sold for between 65 cents and 79 cents on the dollar. By comparison – at the height of the real estate boom – developers were fetching 95 cents on the dollar.

(Property developers receive tax credits – worth between 30% and 60% of a project’s cost – to encourage building in low-income areas and to hold rents down. They typically then sell the credits to large financial institutions for the tax benefits they offer.)

Although Buffett and Sachs surely intend

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Dan Holland has just interviewed Wall Street chronicler Charlie Gasparino’s. The first few paragraphs of the interview that appeared on RealClearMarkets are published below.

There’s good reason to believe that Gasparino’s latest book, The Sellout, will become the definitive book on the current financial crisis and the events that led up to “The Great Recession.” Spanning three decades, The Sellout pulls no punches in chronicling the rise and fall of excessive Wall Street leverage and risk taking, as well as the cast of colorful characters that ultimately brought the US financial system to its knees. It will hit bookshelves tomorrow [Tuesday].

RealClearMarkets: You sat down recently with Wall Street legend Teddy Forstmann to discuss your new book and the genesis of the mess we now find ourselves in. Forstmann said it all began as a “cold” back in the 1970s and 1980s, and that since

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BRE Properties Inc. (BRE), a real estate investment trust (REIT) that operates apartment communities, has reported a decline in third quarter 2009 FFO (fund from operations) to $32.5 million or 59 cents per share compared to $36.3 million or 69 cents per share in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. Total revenues from continuing operations during the quarter were $86.5 million versus $87.9 million in the year-ago quarter. Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) were $55.7 million for the quarter, compared to $61.8 million in the prior year quarter. Overall same-store net operating income decreased 7.9% during the quarter, primarily due to a 6.9% year-over-year decline in average same-store market rent from $1,540 per unit to $1,434. Average ...

Goldman Sachs Group Inc. (GS) is contemplating buying tax credits from Fannie Mae (FNM). However, it may be reasonable to assume that the U.S. Treasury may not approve of the deal. Goldman hopes to receive approval this week for $1 billion worth of tax credits. Tax credits are incentives designed to bring more investment to low-income housing developments. This would help the company reduce its tax bill as well as bring some much-needed financial relief to Fannie Mae. While financial details of the proposed transaction are not disclosed, Goldman could arrange other investors for the deal as well. The Obama Administration, however, is opposed to the deal, as it will reduce Goldman's tax bill at a time when Wall Street is already facing intense public scrutiny. Fannie Mae, a government-controlled mortgage financier, could get financial relief if Goldman bought the tax credits. As ...

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Friday October 30, 2009

DrStockPick.com Stock Report!

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Cavitation Technologies, Inc. (OTC Bulletin Board: CVAT) announced a 3-for-1 forward stock split effective at the market open Thursday, October 29th. CTI is a world leader in the development of technologies that represent a quantum leap over existing processing methods for a wide variety of applications and industries. Positioned to provide licensing and sales of its technology which can be applied to virtually every industrial fluid that requires complex molecular bonding, including large-scale water purification, removing impurities from agricultural

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For Immediate Release

Chicago, IL – October 30, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Moody’s (MCO), Microsoft (MSFT), Fannie Mae (FNM), Freddie Mac (FRE) and ExxonMobil Corporation (XOM).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Thursday’s AnalystBlog:

GDP Notes – In Depth

With massive amounts of space sitting idle in offices and empty strip malls littering the landscape, look for new investment in commercial real estate to continue to decline in coming quarters. Moody’s (MCO) has estimated that the value of commercial real estate has plunged by

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Senior strategist Dirk van Dijk, CFA has issued notes on this morning's GDP numbers. These notes will be published in two separate blogs -- Growth Rates and Contributions to Growth. The recession is over! In the third quarter, GDP grew by 3.5%, comfortably ahead of expectations for 3.0% growth. This is a huge improvement over the 0.7% decline in the second quarter and the 6.4% plunge in the first quarter. The internals of the report were strong as well, although it appears that much of the growth came from things like the "Cash for Clunkers" (C4C) program and the extraordinary levels of support that are currently being given to the housing sector. I will first go over the percentage growth rates for the main components of GDP, and then how much each part contributed (or subtracted from the 3.5% growth rate). This is probably the ...

For Immediate Release

Chicago, IL – October 29, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Beazer (BZH), Lennar (LEN), Fannie Mae (FNM), Freddie Mac (FRE) and WellPoint, Inc. (WLP).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Wednesday’s AnalystBlog:

New Home Sales Sink, Credit Rising

For the month, median prices rose 2.45%, although they are still down 9.1% from a year ago. Average prices posted an even stronger rise, up 10.1% on the month and down just 1.6% from a year ago. That probably is mostly a reflection of the regional

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Helped by the "first-time home buyer" tax credit and other forms of government assistance, home prices -- as measured by the Case Schiller Composite 20 index -- rose for the third straight month, up 0.97%, but still down 11.36% on a year-over-year basis, and off 29.89% from its May 2006 peak (note below when I reference peak levels they are from May 2006, not from the individual city peaks, which might have been a few months before or after the national peak). Since home prices do exhibit a fair amount of seasonality, I am working with the seasonally adjusted numbers. Most of the press has a habit of tracking the unadjusted numbers, which I feel is a mistake. So realize that the numbers presented here might be different from what you read in the newspaper tomorrow. A total of 16 of the 20 cities registered price increases, ...

For Immediate Release

Chicago, IL – October 23, 2009 – Zacks.com announces the latest Industry Outlook. Today, Zacks Equity Research discusses the REITs sector, including American Capital Agency Corp. (AGNC), Fannie Mae (FNM), Freddie Mac (FRE), Vornado Realty Trust (VNO) and Simon Property Group Inc. (SPG).

Here is the latest on the REITs sector:

The credit freeze will have a positive effect on commercial real estate down the road; new office, apartment and retail construction has slowed considerably, which will benefit owners in a couple of years. Many companies that we cover have stopped all-new construction.

In this environment, we like well-capitalized companies that have adequate liquidity and manageable near-term debt maturities. Currently, we are bullish on American Capital Agency Corp. (AGNC), a mortgage REIT that invests exclusively in agency securities for which the principal and interest

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