Shenandoah

Hat Tip to Barry Ritholz at The Big Picture Blog for this one:

The recession is over but the depression has just begun

By John Galt

December 19, 2009

From PR Newsire:

RED BANK, N.J., Dec. 16 /PRNewswire-FirstCall/ — Hovnanian Enterprises, Inc. (NYSE: HOV), a leading national homebuilder, reported results for its fourth quarter and fiscal year ended October 31, 2009.

RESULTS FOR THE THREE AND TWELVE MONTH PERIODS ENDED OCTOBER 31, 2009:

• Total revenues were $437.4 million for the three months ended October 31, 2009 compared with $721.4 million in the same quarter a year ago. For all of fiscal 2009, total revenues were $1.6 billion compared with $3.3 billion in the prior year.

• For the fourth quarter of fiscal 2009, the after-tax net loss was $250.8 million, or $3.21 per common share, compared with a net loss of $450.5 million, or $5.79 per common share, in the fourth quarter of 2008. For fiscal 2009, the after-tax net loss was $716.7 million, or $9.16 per common share, compared with a net loss of $1.1 billion, or $16.04 per common share, for the previous year.

• Pre-tax land-related charges for the fourth quarter ended October 31, 2009 were $146.4 million, including land impairments of $122.7 million, write-offs of predevelopment costs and land deposits of $15.3 million and $8.4 million representing the write down of our investments in certain unconsolidated joint ventures. For all of fiscal 2009, pre-tax land-related charges were $703.1 million, including land impairments of $614.1 million, write-offs of predevelopment costs and land deposits of $45.4 million and $43.6 million representing the write down of our investments in certain unconsolidated joint ventures.

• Despite a 37% decrease in active selling communities, the number of net contracts for the fourth quarter of fiscal 2009, excluding unconsolidated joint ventures, increased 1% to 1,238 homes compared with the fourth quarter of the previous year. For the full year ended October 31, 2009, the number of net contracts, excluding unconsolidated joint ventures, was 5,227 homes, a 20% decline compared with the prior year.

(Continued at the link above)

Basically speaking, the value of the land they hold is down, the price on the homes they sold is down, the number of contracts were down and their net losses were reduced thanks to this:

As a result of recent tax legislation, an income tax benefit that will increase cash, net income and stockholders’ equity by $275 million to $295 million is expected in the first half of fiscal 2010. This has increased slightly from the previous expectation of $250 million to $275 million.

So you don’t have to be a smart investor. You just have to eat the losses and hope they get more tax breaks to offset the fact that people are not buying or ordering more homes because the available pool of qualified buyers is reduced by the “Obama Economic Recovery” we are enduring.

I’m in this business. There is no recovery. Realize that we have another 1/2 decade to go in the good markets and another 10 years in the hardest hit areas and you can play this correctly. The propaganda is just that; designed to prey upon your “Animal Instincts” and make you feel good enough to invest in a losing propostion. Do not trust one damned thing this government or the Fed feeds you at this time. The crisis is far from over; it has only paused and reloaded for 2010.