Wednesday, February 07, 2007

The Pig In The Python

The housing slump continues to work its way through the economy. Bloomberg (02.07.07):
"Whirlpool Corp., the world's largest appliance maker, said fourth-quarter profit fell as a drop in the U.S. housing market hurt sales. The company lowered its 2007 earnings forecast.

Whirlpool Profit Declines on Slump in U.S. Housing

"Net income declined to $109 million, or $1.37 a share, from $126 million, or $1.83, a year earlier, the company said today in a statement."

"Chief Executive Officer Jeff Fettig sold units with slower sales growth and will eliminate at least 4,500 jobs and close factories to fend off competition from overseas rivals such as LG Electronics Inc. A 4 percent fourth-quarter drop in the price of cold-rolled sheet steel and a 16 percent retreat in copper costs couldn't compensate for the U.S. housing-market slump."

Huh. Even a significant drop in the cost of its materials didn't help.

It's not just hitting appliance manufacturers either. It's already caught up to Black and Decker and Home Depot (though to be fair, Home Depot's difficulties have as much to do with the business acumen of recently departed BottomLine Bob and his buddies as anything). Not to mention the builders.

And it may not be going away anytime soon. Homeowner vacancies (h/t Bonddad) are way up too. "That figure, an often-overlooked measure of how many homes for sale in the country are empty, has climbed to its highest level since the Census Bureau began tracking it four decades ago."

Then there's the subprime lenders. They're feeling the effects of the slump bigtime. The ones still in business that is.

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