1115.org

Miller’s Crossing (1990)

Caspar: Friends is a mental state. Wuddya say, kid?

Tom: I’ll think about it.

Caspar: Kid, if it’ll help you think, you should know that if you don’t do this you won’t be in any shape to walk outa here.

Tom: Would that be physically, or just a mental state?

Ara Hovnanian (7/27/07):

Hovnanian Enterprises Chief Executive Ara Hovnanian told CNBC Friday that the housing market’s biggest problem is psychological.

“It’s a psychological problem right now, more than anything else,” Hovnanian said on CNBC’s “Squawk Box.” “Job growth is good. Interest rates are still really, really good. Demographics are good so it will come around.”

Apparently it wasn’t all psychological. Just a couple of months later, Hovnanian pulled what should have been (and probably was - to most of the company anyway) an extremely embarrassing PR stunt by adopting “Crazy Eddie” prices and getting the business press (and some regular news shows) to cover his fire sale live:

Hovnanian Enterprises, struggling like other home builders, is offering six-figure discounts on some of its properties this weekend as it attempts to draw interest in a slumping market.

The sales blitz involves dropping prices by more than 20% on some of its prime real estate.

“We wanted to create a little more buzz and hype and we got all of our geographies to agree to do a three-day blitz all at the same time and that’s what is unusual,” CEO Ara Hovnanian told CNBC on Friday afternoon.

“We’ve had to reduce prices to deal with the marketplace and we want to make sure we communicated,” Hovnanian added. “We do have a little more inventory than we’d like and we’d love to stimulate sales more so that’s what we came up with this idea to move some houses.”
[…]
“Folks are ready to buy, they are just waiting to confirm that there is value out there,” said Michael Skea, vice president of marketing and sales for the company’s northeast sector.

The Bush administration needs to hire this guy Skea, ASAP.

Unfortunately for The Hov, psychological problems persist:

After paying preferred stock dividends, [Hovnanian] reported a net loss of $340.7 million…compared with a loss of $30.7 million for the same period a year ago.

Quarterly revenue fell 30 percent to $776 million from $1.1 billion in the same period last year.
[…]
The company said its net contracts for the second quarter, excluding joint ventures, declined 29 percent to 2,226 homes. Its average home price fell nearly 17 percent to $290,556 from the same period of 2007.

What did The Hov have to say?:

“We expect to persevere through the current downturn and we will be in position to thrive again once the housing markets begin to recover,” President and CEO Ara K. Hovnanian said.

A ten-fold loss after fire-saling his inventory and showing his ass on TV, and now he “expect[s] to persevere?”

When The Hov ends up in a padded room in the puzzle factory - a fate no doubt wished upon him by shareholders - will it still be the housing market that has psychological problems?