However the deals being offered by the GSE's, Fannie and Freddie are very attractive. Sub 5% rates(5-7 year term) on spreads under 200 basis points have been available in the last week.
A 73% decrease in loans for office properties gives you the state of affairs in office building REITs. As sales demand has plummetted, price will follow. My guess is the assets of the REITs are still marked to model, not market. I don't follow these REITs, but, my guess there is some good shorting opportunities left. Anybody know?
O/T - but is this what is in store for US consumers? CC company simply dropping card customers, simply canceling their cards even if you have a good credit history - No Mo Money!
Wow, those are huge drops in loans for offices, industrial, and retail.
Boy, we should see some nice softening in prices this year and next, given the big drops in demand.
FWIW -- the lag in San Diego residential resales was two years: peak sales volume was in June 2004, followed by peak price in May 2006, with both moving down nicely after their respective peaks.
Anon@4:31p, I would say that it is likely we will see something like that happen in credit cards. However, IMHO what is probably more likely to happen is overall lending standards will tighten. You will probably also see card limits being lowered, late fees increased, and annual fees being introduced for problem borrowers -- you don't have to cancel people to squeeze them out. The nice thing about that is if they don't go, they'll become less of a problem (you'll have hog tied them pretty well so they won't/can't run up more balance) and they'll help add to the bottom line with all the fees generated.
for all of u who have put up with rich and i shamelessly promoting SRS over the last several months i would like to pt out that very possibly the stars are all beginning to align for it.
CMBX is moonshooting
as i said earlier, .IRX and .TNX were up big today. if this continues it will kill the hedgie idea that REIT dividends will be the place to hide as the Fed continues to cut rates.
IF stocks have hit resistance levels and are getting ready to roll over, then the rise in .IRX and .TNX is a big warning.
we now know after todays banking report that loans to CRE are plummeting.
after hours SRS jumped and GGP dropped.
SRS has hit resistance at 100 as well as the Dow having just crossed 38.2% fib line.
On Moody's suggestion to go numeric: they should stick to letters but start from the end of the alphabet, as in x, y, z, thus actually confessing their level of ignorance on the instruments and entities they're passing judgment.
I suspect he will experience a jump
in tax brackets over the coming year and will have that truck paid off in short order. If he is a smart repoman.
I did come across a real repoman about
1 1/2 yrs ago and spoke to him about his business. At that time he could not keep up with demand. Was looking
for more help in order to put more trucks on the road. Was doing 100-200
takebacks/month. I would like to see
what his numbers look like now.
Repo men are crazy. The few I have encountered all seem to have a nervous twitch. Pretty hard to send a repo man in the middle of the night to get a house or building back. So, instead, the people getting foreclosed can just tear the thing apart. There is a lesson in that somewhere.
i would agree cre lending has been way too loose the past few years. but if you think it is in as big a bubble as resi, you are crazy. resi values almost trippled in southern calif in last 7 yrs. cre is no where near that level.
current market levels have more to do with liquidity (lack of) than true value. i see trades all day long that would provide insane risk free (true arb) yields. problem for anyone going long is too much risk in market that lacks depth with liquidations from prop desk and hedge funds etc. One hint of selling and spreads blow out.
at todays levels, i would sell you protection on certain cmbx until i couldnt see straight.
The same day that the MBA study came out my local cheerleader, er, newspaper ran a story about how office rentals were above 95% capacity, and how rates were 1-2% higher in Jan alone. Huh?
I suppose its true, like all the local realtors have been saying...our little mid-size southern town is sufficiently decoupled that bad things happening in the US market won't affect us. Now, let me happily drift to sleep...
However the deals being offered by the GSE's, Fannie and Freddie are very attractive. Sub 5% rates(5-7 year term) on spreads under 200 basis points have been available in the last week.
godihatejargon, will Fannie and Freddie take a 2006 appraisal?
A 73% decrease in loans for office properties gives you the state of affairs in office building REITs. As sales demand has plummetted, price will follow. My guess is the assets of the REITs are still marked to model, not market. I don't follow these REITs, but, my guess there is some good shorting opportunities left. Anybody know?
CR,
Check out the top link for Housing Wire.
I thought we were supposed to be impressed by the fact applications have been UP, UP, UP!
You mean they don't fund every application anymore? That doesn't seem fair.
O/T - but is this what is in store for US consumers? CC company simply dropping card customers, simply canceling their cards even if you have a good credit history - No Mo Money!
Egg Cancels 161k Credit Cards
Wow, those are huge drops in loans for offices, industrial, and retail.
Boy, we should see some nice softening in prices this year and next, given the big drops in demand.
FWIW -- the lag in San Diego residential resales was two years: peak sales volume was in June 2004, followed by peak price in May 2006, with both moving down nicely after their respective peaks.
Anon@4:31p, I would say that it is likely we will see something like that happen in credit cards. However, IMHO what is probably more likely to happen is overall lending standards will tighten. You will probably also see card limits being lowered, late fees increased, and annual fees being introduced for problem borrowers -- you don't have to cancel people to squeeze them out. The nice thing about that is if they don't go, they'll become less of a problem (you'll have hog tied them pretty well so they won't/can't run up more balance) and they'll help add to the bottom line with all the fees generated.
I know it has been another scary day, but don't worry, Moody's has solved all of our problems:
http://www.bloomberg.com/apps/news?pid=20601087&sid=ai0R4KZOGdHY&refer=home
Of course, it was an alphabetical ratings system that caused all of our problems. If we had only gone numeric sooner!
OT but topical,
SPF is supposed to report earnings today at 'time not specified' - how about midnight?
for all of u who have put up with rich and i shamelessly promoting SRS over the last several months i would like to pt out that very possibly the stars are all beginning to align for it.
On Moody's suggestion to go numeric: they should stick to letters but start from the end of the alphabet, as in x, y, z, thus actually confessing their level of ignorance on the instruments and entities they're passing judgment.
depending on where u draw retracement lines from, the Dow could be at the 50% or 38.2% fib line.
Idoc,
How does SRS deal with REIT dividends? Do you have to pay them twice?
Well it's about time. I don't think more strip malls are needed in SFV for sure. OC seems pretty built out too.
And just cruising around the fwys here, for lease signs are littering the commercial building landscape.
So, who's going to be hiring going forward?
Cheers,
Fast Money:
Sam Zell reports 7.7% stake in Starwood.
Sorry, idoc, thats bullish for RE - probably a short-term negative for SRS.
I think they should merge into one big conglomerate.
Lively Money: Cashing out using Google's blogger!
Lively Money,
Easy on the SPAM.
Mike in AZ,
Hes been spamming for a month now - I think people have just been ignoring him, though I also said something the other day - gets old.
Just don't click on the link - any referrals from CR will just keep it going.
Mike, dunham,
At least he's not that guy posting that annoying thing about fake paychecks. He really thought that was earthshaking stuff.
Cheers,
One post upthread Tanta mentions ignoring this twit until she can stomp him with the bunny slippers o' death...ignore him in other words.
Misean @ 5:16 - Vivid?
Gary,
LOL
Cheers,
MAB,
i went quickly thru the prospectus but couldn't find it. rich?
http://media.proshares.com/documents/psprospectus.pdf
Misean asked
So, who's going to be hiring going forward?
The repo men....got a tow truck?
Idoc,
The DJ REITS yield about 5% currently. Shorts and SWAPS have to account for this in some manner.
Thats a 10% negative dividend for SRS combined with a 0.95% yearly management fee = 11% cost of entry.
Plus, in a large sense you are shorting inflation to boot as most real estate leases are long term and have automatic yearly increases built in.
Be careful.
SDS gets a dividend b/c of the swaps contracts and whatnot - not sure how SRS works.
Striper,
Yeah but the repo man bought the truck on credit.
Who repo's the repo-man?
Cheers,
I suspect he will experience a jump
in tax brackets over the coming year and will have that truck paid off in short order. If he is a smart repoman.
I did come across a real repoman about
1 1/2 yrs ago and spoke to him about his business. At that time he could not keep up with demand. Was looking
for more help in order to put more trucks on the road. Was doing 100-200
takebacks/month. I would like to see
what his numbers look like now.
Repo men are crazy. The few I have encountered all seem to have a nervous twitch. Pretty hard to send a repo man in the middle of the night to get a house or building back. So, instead, the people getting foreclosed can just tear the thing apart. There is a lesson in that somewhere.
i'm just generally at a loss for words
'm just generally at a loss for words
Care to expand on that?
i would agree cre lending has been way too loose the past few years. but if you think it is in as big a bubble as resi, you are crazy. resi values almost trippled in southern calif in last 7 yrs. cre is no where near that level.
current market levels have more to do with liquidity (lack of) than true value. i see trades all day long that would provide insane risk free (true arb) yields. problem for anyone going long is too much risk in market that lacks depth with liquidations from prop desk and hedge funds etc. One hint of selling and spreads blow out.
at todays levels, i would sell you protection on certain cmbx until i couldnt see straight.
bets of luck
es
The same day that the MBA study came out my local cheerleader, er, newspaper ran a story about how office rentals were above 95% capacity, and how rates were 1-2% higher in Jan alone. Huh?
I suppose its true, like all the local realtors have been saying...our little mid-size southern town is sufficiently decoupled that bad things happening in the US market won't affect us. Now, let me happily drift to sleep...