Builders Revisited: Dangerous Optimism

This morning Centex Corp. CTX(one of the large home builders) reported results for
4th qtr: a loss of $910.5 million (thats almost a Billion), or $7.36 a share(!!!) on the $342.8 million sale of land at the loss of $719.3 million. Revenues for the Qtr plunged to $2.31 billion from $3.64 billion, down 36.5% compared to the 4th Qtr of last year. Closings in the 4th Qtr declined by 33% and average sales price down 15%... Centex profit margin on homes sold sank to 7.7% from 17.7% year earlier...
Is this kind of earnings report a reason to bid this stock up almost 7%???
-Apparently it is! According to Wachovia analyst: "CTX is focusing on an asset-light model, and 4th Qtr results is the step in the right direction." (as per Dow Jones Wire at 10:25am.)
I was trained to believe that loosing money is a bad thing... not anymore! Losing money is GOOD! Making money is BAD! Just look at Exxon being clobbered down 4% after earning almost $11 billion for the qtr.
Despite obviously nasty and further deteriorating market for home builders, (see my April 22, 2008 article Builders: A Sure Thing at SA, home builders stocks are up as much as 60% this year. I do understand that markets anticipates, and that some believe that "its so bad now, it can't get any worth"... well, it can and it will! This morning surge in Jobless Claims by 35,000 by no measure is a good news for housing sector.
In its stock report on another large builder Lenar Corp., (LEN) dated April 26, 2008 S&P analyst Kenneth M. Leon while attempting to put a positive spin on home builders, forced to admit that: "To date, we believe the key factor driving the housing downturn are a decline in buyer's confidence, a weakening of demand for new homes, an oversupply of new and existing homes available for sale, and the inability of many (potential) home buyers to sell their current homes..."
-Need I say more?
In my humble opinion, those who bet on improving housing sector, regretfully will be disappointed. The issue is not only the problems I listed in my previous article, the main problem is in the "Structured Finance" area, or inability of bankers to package mortgage loans into a mortgage bonds and sell them to investors. There are not too many buyers for mortgage bonds now and may not be for a long time. Without "Structured Finance" link, there is no money to lend! The system that provided endless supply of money to the mortgage market is severely damaged and it will take a long time to repair it, if it even can be repaired.
Home builders stocks have rallied on expectations of happy days and now their stocks are extremely overvalued. As for Happy Days, they are nowhere in sight.