Home myths meet reality

--representative home builders : Dr. Horton, Beazer, Hovananian Enterprieses Inc., Lennar Corp, WCI(luxury home bulders), KB home, Centrex Corp --several factors dry up their profits --a.cash machine fallacy: builders would turn into "cash machines" in the event of a housing slowdown becaues they would pare constuction and land buying. In reality, they have to keep building large housing developments so they are unable to stockpile as much cash as expected. --b.incentives are crippling these companies' profits. --most builders except KB Home has few cash cushion and negative cash flows --Some might buy lands outright, which tripped up builders uring the previous slump. --only biggest builder achieve diversity --bank will tighten its stance on credit line, further deterioate the housing market condition