"Hovnanian said it incurred $336 million of charges related to inventory impairments and land option write-offs in all of 2006, including $315 million in the fourth quarter.

The company said it had not anticipated the suddenness or magnitude of the fall in pricing. The pace of new home sales was still being affected by high contract cancellation rates, increases in resale listings and in new homes available for sale, it added."

From CNN Money. When I see things such as this, it is a nice reminder on how important it is to think for yourself. I did write here (and I really do not want this to sound like I think I have any special knowledge), that I thought that we could not have a bottom (amidst all of the pundits saying the worst is over) until there were asset writedowns that typically accompany a wholesale industry decline. I would hazard a guess that there will be more writedowns. And I have to marvel that management did not foresee the magnitude--though this is the second time that I've heard this from a homebuilder. They are the fox in the hen house, so taking them at their word regarding their opinions on the worst is over etc is risky at best.

So for those of you who feel like you are swimming upstream from mainstream thinking, take heart in your intellectual integrity and patience in standing aside when things look awry.

Leisa,
I share your sentiments from a past post in regards to Tradesman. I don't think that he would have gone on an extended leave without letting the board know about it. Maybe Bill would email him for us. Like you I miss his wisdom.

Re swimming upstream. Here is what you make when you swim with the sharks:

Adding more fuel to the fire surrounding this year's record banking bonuses, Bloomberg News calculates that Goldman Sachs Group Chairman and Chief Executive Officer Lloyd Blankfein is eligible for an $87 million bonus this year after his firm shattered Wall Street's profit record.

Bloomberg based the calculation on a compensation plan approved by Goldman shareholders earlier this year that allows the firm to pay as much as 0.6 percent of pretax earnings to each of its 25 top executives. That works out to $87.4 million apiece, based on Goldman's $14.6 billion of profit before tax. Shareholders also eliminated a $35 million cap on bonuses paid in cash and stock.

While a payment of that size would be more than double the $40 million Morgan Stanley awarded its chief, John J. Mack, last week, most analysts estimate the Mr. Blankfein is likely to get $50 million when the bank discloses its executive bonuses this week.

Bill,
According to Tradesman, he has daytraded full time for two years. I did not get the impression that he had any other job.

Iran drops USD:

http://news.bbc.co.uk/2/hi/business/6190865.stm

Credit Swiss said:

Silver lining
Given the swift reaction by the exchange market yesterday (i.e.,
depreciation of the baht), we believe these restrictions could be lifted
earlier than expected. Therefore, we urge investors with existing
holdings in Thailand to take on a longer-term view, with a .buy-hold.
strategy.

Did not take long, Thailand Abandons Lockup on Foreign Stock Investments.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aq0GRm0MrgAg&refer=home

The Empire Strikes Back ! -

Well that is MY bailiwick (CRE) Leisa and I have said the same so good on you! ;) That was an unbelievable short squeeze counter rally abetted by some middling data points. It then became mainstream with the financial press doing their usual poor job. In my opinion the homies will retrace the last move and more. They will get to book or below as a group (financial impairment). I started shorting IYR last week as its time has come also.

(Didn't I say that I would be gone til 2007? Ah well, home with my 5 year old duaghter who had a tonsillectomy. She can't sleep and so neither can I!)

General market observation. Naz gaps are getting sold off HARD. IMHO, Naz is putting in its top and the others will shortly follow. Naz topped before May sell-off also. That's the tell. Beta. Again, this is just IMHO. Good luck all.

Hang in there with the 5 year old, Mark. I've got twin 6 year old girls... Given my sleep (or lack of sleep) patterns, I'm usually the one who gets up in the middle of the night to take care of whoever is sick. Great time to catch up on Bloomberg or CNN (or Sportscenter for that matter...) Good luck.
EJ