Toll Brothers result shows deflation hurting real estate badly
Sam Adelton
Feb. 22, 2007

The first-quarter profit dropped 67 percent due to hefty write-downs and other costs at Toll Brothers, the Luxury-home builder.

Quarterly earnings declined to $54.3 million, or 33 cents per share, from $163.9 million, or 98 cents per share, during the same period a year ago.

Analysis of data shows the company actually did pretty well in clearing its inventory. But the problem is what they had to do to clear the inventory is pathetic. This is an example how deflation can force companies into cutting costs but at the end they make less money any way.

Real Estate’s biggest trouble is deflation that has engulfed it after the burst of the bubble. Deflation is scary because fear fuels fear.

The mortgage default rates and talks on the main street about foreclosures are actually bring more deflation to the front end of the economy.

The echoes of 1929 in the Wall Street- crash, deflation and depression?
Peter Oberois
In the August of 1929, people used to joke in New York about the fools that talk about stock market problems. The parallels are here. The school children are again since 1987 talking about stock market.
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Toll Brothers result shows deflation hurting real estate badly
Sam Adelton
Real Estate’s biggest trouble is deflation that has engulfed it after the burst of the bubble. Deflation is scary because fear fuels fear.
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Underemployment changing unemployment as deflation become real – the truth behind the jobless claims
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More importantly, the four-week moving average for claims edged up from 326,700 to 328,000, the highest level for this average since early December....
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Which stocks can outperform during deflation and underemployment?
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During deflation, stock market collapses. It happened in 1929-34 and also in Japan – 1988-2005. These deflation induced bear markets in economy and stock markets....
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Certain sectors of the stock market has started reacting to deflation and underemployment
Nina Parker
The sectors of the stock market that is facing price war on the downside are actually falling in prices. Those stocks that have some pricing power are advancing.
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While gold is going up on Iranian geopolitics, lack of overwhelming demand in crude oil shows deflation making economy shrink
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Oil and gold normally correlates very well. During economic inflation, gold and oil both go up rapidly in prices. This time gold is going up while oil is getting ready for collapse due to lack of global demand.
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Stock market can rise even with deflation – how can that happen?
Mark Osifchin
Deflation in the economy is hidden. Stocks market is reacting like tax-free municipal bond market. The new dividend tax rule changed the stock market into a tax heaven bond market.
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