The median price paid for a Southland home was $355,000 last month, down 4.1 percent from $370,000 in May and down 29.3 percent from $502,000 for June 2007. The peak of $505,000 was reached in March, April, May and July of last year.
A foreclosure driven-market is what we have in large part. Exclude the few stable Southland markets like Santa Monica and Coronado Island where there are few foreclosures, and you have a majority foreclosure market.
Nonetheless, inventory of foreclosures at the banks I have been tracking went up quite a bit.
Banks for the past 2-5 months have finally been trying to dump foreclosures on the market, but even at "dump" prices they are still selling to slowly.
I wish they quoted short sale stats because I think they are a growing and more significant part of the market. Foreclosure activity doesn't give the whole picture. The banks are defining the marke more and more.
Got out of some of my DEC '08 SPY puts that I'd held since last November today. Felt like it was time to take some profits, and that we might see some sort of continuing rally over the next few weeks.
About the only thing I feel really comfortable with right now is SRS, and I hope I'll be able to pick some up below 90 before too long...
"The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,671 last month, down from a $1,713 the previous month, and down from $2,430 a year ago. Adjusted for inflation, the current payment is at its lowest level five years."
$1671 a month doesn't seem too bad. Tax adjusted in Calif. that's like $1000 bucks a month. Now, I know that doesn't count upkeep, property taxes, HOA's, etc. but it seems like we're fast appproaching real affordability. And CF positive for investors.
Hmmm....someone mentioned Santa Monica and Corodnado. Next to Malibu, Ventura coast and Santa Barbara, those are the only places in Southland that I regard as inhabitable. The rest is slum, too far from coast or has too long a commute...or all of the above. Looking at what a slum most of Southland is, I say an average house price over USD 100.000 is a robbery.
Meant to say that other places are not suitable for human habitation and that for average home price in Southland, anything above USD 100.000 is a robbery.
Is there any way to get an idea of what lending standards are now. How many poetential homeowners are being rejected. What kind of down payments are now being required, credit scores, that sort of thing. In short, how hard is it to get a loan?
Wonder when the next foreclosure wave starts. You know, when all those people who bought foreclosures a few months ago. You know, when prices were a few gazzillion dollars higher.
I work for the University of California and I make $10.50/hr. Do you think I will be able to buy a home soon? The UC system is generously offering me a 25% pay increase in the next five years.
My landlord is trying to negotiate a deal with the lender, the house isn't foreclosed and is not behind in payments, as far as I know. I wonder what the chances are of a "balance adjustment". The other issue was a large prepayment penalty if a refinance was ever sought.
I got out of SKF about 2 minutes before close yesterday. I'm a genius!
Palo Alto and the rest of Silicon Valley is a bubble within a bubble. There's a high concentration of wealth steeped in the ground there. It will take years for that to dissipate.
I would say that today definitely proves we're nowhere near a bottom. Way too much buying at the slightest hint of optimism. Oh well... good chance to reload for the next leg down.
U.S. stocks rallied, sending financial shares to their biggest gain ever, after profit at Wells Fargo & Co. topped analysts' estimates and oil dropped for a second day.
Just confirms the old adage that the biggest rallies occur in bear markets.
Aw, Mr. Beach, can't we shorts just lick our wounds in peace?
I have complete confidence that this is a pump job. Terrible economic news all around: CPI, homebuilder confidence, home prices, Wachovia earnings off 23%.
It is irrational for the market to be up today.
But, no problem. The S&P will have to move up a lot more -- 13% -- PPT schmucks/shylocks/shysters before I get a margin call.
OT- Someone noted on another board that puts were still a great buy yesterday on SKF if it held between 160 and 210 until expiration friday..it looks like someone else knew that..could hav been calls..
What I find interesting here is that if you do an XY plot for the May and June prices for the different counties you get a linear relation -- that is the same relative decrease in price in June regardless of the May price.
Re: It may be up to Bernanke and Paulson today to either save the USD from the abyss or to push it over. They are scheduled to speak before a House of Representatives committee on new measures they will be promoting to prevent the catastrophes that got us into this problem in the first place - namely, misguided "financial innovation" at the investment banks that provided such potent punch bowls for Great Credit Bubble of the mid-Naughties (2003-2007).
Hey, maybe one of you PPT schmucks will be interested in selling your nice La Jolla home here in a few-to-six months, once the rug gets pulled out from under you.
La Jolla is nice..Throw a party when you get it! Walk to Blacks!
SRS play dangerous with Reit earnings next 2 wks, any upside surprises and with IYR off 40% already..could be similar movement down as skf today...of course it's down 15% today..
I love the topping expectations game - 90 short days ago the expectations were for .57/share - now the beat is .53/share vs. the .50/share expected...riiiiiiiiiight
Sebastian you little pump monkey I'm still right here, and well feed with a full belly of mounatin oyseters Don't forget to get out on this desperation market manipulation. See ya, in a couple of weeks.
Its time to hide in cash for a while, but who knows what the next 24 hours holds? Those pictures of people waiting for their money at Indy Mac didnt create much fear. I'll wait till I see movement up in SDS,TWM,and SPK.
When these fools get off TV, some fear will set in, and then wait for a few BKs.
OT OT, Well I got f'ed around today trying to day trade SKF. Very few bounces, didn't take profits soon enought. Good lesson in using tight stops, though. Didn't lose much.
This move in the financials will not last long. It's just trying to find its way back to some sort of uppper downtrend line, probably having a hard time finding one because they've been crushed!!
Hey...if Wesley Snipes is too elusive for this gov, better set your sites on something easier to find.
Next thing you know they'll be talking about conflict of interest in Congress...or corruption... or whether or not Pelosi has had a face stretch. You know...all the real mysteries.
Meh...While you guys have been bitching at each other about who's the greater thimblewhit a short seller or long holder (? this second one is never made explicit...) I built a blog server. It's pretty cool actually.
Not sure what to do with it...Sloooow day in the bit mines.
I love the topping expectations game - 90 short days ago the expectations were for .57/share - now the beat is .53/share vs. the .50/share expected...riiiiiiiiiight
Yeah, the sad truth is to really do well in these markets you've got to think like you're running a scam yourself. Then things start to make a bit more sense.
I believe two or three days ago I predicted a big rally driving SRS down below $100 headed towards $80.
Since I'm not a patriot, according to people like AOTC, and my prediction is coming true, I will take this wonderful opportunity to provide for my family. A family of hardworking savers. A family of 30% down payments. Of one car per family. Of one TV, found used in the garbage. A family of no debt. A family of producers. We are hard working, debt fearing, savers who don't believe the lies we are told by our government, the CEO's or the media. Bad bad people.
Now, all you patriots should go shopping like the president wants you to. Go on, children, do as you are told. SUVs are on sale. No thinky for you. Maybe you could stone some unpatriotic people on the way to the mall? Shop, shop!
12th,
I took my profits on SRS earlier, was happy to see it go on sale.
AOTC says I'm an unpatriotic sort as well. Might be true, I favor honest government, hard work, frugal living, and realistic expectations. I also think the neocons should be given a fair trial and then hung from the lampposts. I want my country back.
12th-If you're such a hard-working salt of the earth type (by the way, you pretty much described me) then why are you so lazy as to short (or buy) entire indices that lump the foolish and the well-run together? Do some research and identify the really crooked or idiotic and short them and/or the really smart and honest and go long them.
OT - The NYTimes had an article on people taking in roomers/homesharers to help defray living expenses. They did touch briefly on the possibility of zoning issues.
But what,if any, are the tax consquences of say having one, two, or more renters paying say $400.00 per room.
Yes, I'm old enough to remember real boarding houses.
don't know if bears get it. W/ all the impending doom & gloom , market brushed it aside like a flailing mosquito.
Man i am long in this market. Let bears weep/whine in their "gothic" cult.
I'd like to be long too, except that this looks more like the last oily trick in the bag (a good one though -works a lot better than getting bush on the telly or paulson trying to take a load off fannie)
I'll go up when I feel the floor under me. It ain't now.
Foreclosures all around me in beach town 15 miles from San Diego - foreclosures, short sales one and all. Four houses down from me on nice quiet wide street - $369K will get you a 3 br/2ba home with 6000 sq ft lot (big by socal standards) and new pool installed 2 years ago, about 9 blocks from the beach! Come on down folks!! This is nuts!
I live in the wine country (northern napa valley, CA) home prices here haven't budged - in fact they continue to rise. Inventory stays on the market a little longer, but it eventually sells. mostly expensive stuff too.
SKF=$-45/share...told you so, shorting individual S&L is much more reliable ...
p.s. short while you can (don't, if you are unwilling to lose 50% of your SPECULATION investment:) cause starting 21 (just before earnings are out) you may not be able to do so...
if you do not think so, look the above up and think again.
p.s. it is unwise to hold on shorts for long period of time, and shorts are much riskier then most of us imagine; but then again those opportunities are so tempting.
Now, all you patriots should go shopping like the president wants you to. Go on, children, do as you are told. SUVs are on sale. No thinky for you. Maybe you could stone some unpatriotic people on the way to the mall? Shop, shop!
Home prices that I follow in 6 zip codes have been declining steadily over 12 months at 1.5% to 2.0% per month through March, with a noticeable increase from April to July of 3-4% per month, confirmed by the 4.1% May to June drop at DataQuick, and possibly explained by increased bank selling.
Rising NODs with steady to rising bank inventories combined with aggressive selling and you've got Dirksen's corollary: 4% here and 4% there and pretty soon you're talking big money, 50%, home price declines.
Only reason they're here is because concern about the economy/markets has gone apparent and mainstream. They're suddenly googling away for new info sources and, yoikes! what do you know, CR's been mentioned a few places. They're infestation is almost an index in itself. I miss the slower more U-nerdish CR as well, although I was certainly more of a lurker then. I was trying desperately to keep up with the vocab. and arcane structures of CDOs. hermeneutical head-bashing was the order of the day. sigh
Well, to keep AOTC in good spirits: my levered, 2X short the S&P 500 portfolio was down 8% for the day.
Kind of funny, almost.
Big beta, my single bet portfolio: trough was one year ago; peak was yesterday, up 73% from trough.
Tonight at dinner, we have another enlightening discussion about the stock market, and how my daughter levered us up (yesterday morning) just before a big down day.
She pressed the 'sell short' button, then we watched the E-Trade baby video ('I just bought stock', burp, mess).
Good clean fun, thumbing our nose at the schmucks.
I understand what ABX index is, but could you take a minute and explain what the blue categories mean. What is HE-Penna 07-02. series, version, and on down the line.
A terrific and valuable blog, but what's with all the trading talk? Annoying and off point.
That's a matter of opinion. (The annoying part that is, not the terrific and valuable part which I completely agree with). CR & Tanta provide excellent information, but if you can filter through the garbage you'll find just as much, if not more, rewarding information in these here comments; housing related or otherwise. I'm happy to have it all.
Based strictly on self-reporting, it appears that CR readers make eight profitable trades for every losing one. I am humbled to be surrounded by such genius.
it appears that CR readers make eight profitable trades for every losing one
Yes, most gamblers only tell you about the wins, seldom about the losses. But if you read these threads, they're all beating the best money managers on the planet. Somehow, I think not. But hey, I don't get my trading methodology from haloscan, so what do I know?
29% doesn't shock me at all. I estimate my house is down 32%, and I'm in Orange County. Inland Empire is down 40% and still plummeting. My neighbor's house sits vacant - not promising. Wish they'd turn off the hall light - shines into my house.
I think the stock talk has gotten carried away (myself def. included!), but it's unreasonable to think it shouldn't be discussed at all. I mean, we talk about tiny price movements in housing in obscure neighborhoods all the time. When there are huge index swings such as the ones that have occurred in the past few days, people are going to want to speak about them. Just my .02, double shorted.
My tract is down 28%. The same houses were turning during the orgy and they just resold 28% off the top. This is the cheaper area of Orange County. ($502k now for 1600 sq/ft on 6000 sq/ft lot)
I get my trading advice off the back of sugar packets. I used to use equal packets, but I found out aspartame is poisonous so I stopped. Some of the voices in my head say I should try splenda packets or even sweet'n'low. But I refuse. Sugar packets have Suweet advice.
Sometimes I try to get trading advice by divining patterns in the beer bubbles on the side of my pint glass. While difficult at first, it gets much easier after 4 or 5 readings. Problem is, I can never remember them the next day.
I understand what ABX index is, but could you take a minute and explain what the blue categories mean. What is HE-Penna 07-02. series, version, and on down the line.
the PENAAA/AAA/AA etc just refers to the inital rating of the bonds backing that index. (PENAAA means Penultimate AAA, which are AAAs that get paid earlier than the "last cash flow" AAAs, which are what the regular AAA index represents. basically, the PENAAAs are a "higher credit quality" AAAs.)
07-2/07-1 etc refers to the period when the index was launched. (07-2 was launched in the second half of 2007 and includes securitizations from the first half of 2007, etc.)
I invest based on low risk fundamentally sound decisions. The CRE market is overvalued. I can make a healthy return shorting the whole market with low risk. Anyone who is long CRE is basing their investment decision on what? Patriotism?
I'm not trying to be warren buffet. I want 20% a year.
If discussing SRS, which is based on commercial real estate REITs, isn't something people want to do here, that is fine by me.
Granted, they're a part of the whole thing and not without interest, but then, how 'bout some nerdish analysis of all things stockish and not the relentless micro comparison of trades which reminds me nothing so much of a bunch of old farts in a bar saying "Well, the Northern I caught was THIS LONG. Fought it for thirty-leven hours too!" I presumably can learn to bang my head about something in this conversation, but damned if I've caught sight of it yet.
They headed down to, ooh, old El Paso
That's where they ran into a great big hassle
Billy Joe shot a man while robbing his castle
Bobbie Sue took the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and ru
July 16 (Bloomberg) -- Misery hasn't had this much company in more than 15 years.
The jump in consumer prices reported today by the Labor Department means the so-called Misery Index, the sum of the unemployment and inflation rates, is the highest since President Bill Clinton took office in January 1993. The measure, created by Arthur Okun, an economics adviser to President Lyndon Johnson, rose to 10.5 in June from 9.7 in the prior month.
Surging costs and falling payrolls will cause consumers to slow spending growth to the weakest pace since 1991 by the fourth quarter, according to a monthly survey of economists by Bloomberg News. The figures underscore Federal Reserve Chairman Ben S. Bernanke's comment to lawmakers yesterday that U.S. households are under ``tremendous pressure.''
``You add that to what's going on with home prices and that's just a huge stress on consumers,'' said Robert Dye, senior economist at PNC Financial Services Group Inc. in Pittsburgh.
The year-over-year inflation rate accelerated to 5 percent, the fastest since May 1991, the Labor Department said. A separate report July 3 showed a 5.5 percent unemployment rate for June.
Today's consumer price index data also showed wages fell 2.4 percent over the last 12 months, after adjusting for inflation.
I could earn like $30bazillion a year if I moved to Zimbabwe and invested my zimbabwe dollars in US $'s. Course, my standard of living would be noticibly lower...but I'd make great returns.
Why so much bitching about discussing the equity markets? CR's banner reads Calculated Risk FINANCE AND ECONOMICS. This is finance.
Today's move was bullshit. Example: SPY Yesterday hits a multi-year low on 500 million shares, today goes up with 360 million shares. My SDS I bought 1 minute before the close is already up 1% after hours (I know, big yawn, but we could get a nice gap down and sell off tomorrow).
Amended regulation SHO does not eliminate short sales. Dealers are required to locate specific shares to short prior to short sale execution.
So far the stated intention is to limit the rule to 30 days, starting next week. a dozen or so firms in addition to freddy and fannie are expected for inclusion.
Yeah, Troy, I'm just shooting my shjt like all those other terrible calls I've been making lately. Today's move stinks, and Thur/Fri will be a major tell. We either skyrocket up in a V-shape off the bottom or we crap back down to Tuesday's lows. It's as simple as that.
Now, as Citigroup prepares to announce second-quarter results July 18, those off-balance-sheet assets, used by U.S. banks to expand lending without tying up capital, are casting a shadow over earnings. Since last September, at least $100 billion of assets have flooded back onto Citigroup's balance sheet, accompanied by more than $7 billion of losses.
If you start adding up all the potential exposures, it's a huge number,'' said Sam Golden, a former ombudsman for the U.S. Office of the Comptroller of the Currency who now heads the financial-industry practice for restructuring adviser Alvarez & Marsal in Houston.The banks will say that it was disclosed. Investors are saying, `Yeah, but it was cryptic. We really didn't know what you were telling us.''
Over the last several years I've been able to make those returns in real estate. I'm closing on my last property in 2 weeks and will be out of real estate for now.
I see the impending CRE crash as a once in 20 year opportunity. I don't believe it will be hard to make 20% this year as that crash begins. Or next year as it continues. I plan to do this by using SRS.
Il ritorno dei CDO, la loro reincarnazione, una sorta di pulizia generale dalle scorie radioattive dei vecchi CDO, fuori i prodotti strutturati di basso livello e pezzi subprime da poter vendere separatamente con rendimenti presunti di oltre il 20 % e dentro obbligazioni tripla A sempre che oggi possa essere considerato rischio adeguato e minor frazionamento rispetto alle centinaia di assets che potevano comporre un CDO.
were you the one who told me to go buy nachos and peanuts? I went long Taco Bell and Planters, but when I got back to the table you were gone, and so was the pitcher of beer.
Damn, I thought, I'll get no more stock tips.
No tips, huh? TIPS, no TIPS . . . Think I'll go sell my US Treasury TIPS.
What's that Bart Simpson, eat your shorts????? Market advice is everywhere, if you just know where to look.
Meanwhile, I've learned a lot about the real estate biz and its economics from reading CR, and I've refrained from buying a house since I first became interested in 2005. And though I always thought W was a disaster, and thought him a war criminal since 2002-03, I am more impressed now than ever by his incomptence and the most definitely anti-creative destruction he has wrought on this country. Learned some more about that here, too.
If the SPX can close above 1260 we're heading to 1290; otherwise it's back down to 1200. I suspect we'll just gap down and sell off. Volume declined today. And the SPX closed right near the upper downtrend line est. June 5th. That's why I say "It either breaks the downtrend line and will higher or it rejects it."
Troy said: "...Now if you could present a cogent argument for WHY today moved as it did, then that would be finance and, almost, tangentially related to the thread."
Well, at least I can make a worthwhile contribution on that subject.
Yesterday there were 1147 new 52-week lows on the NYSE, a huge amount representing a rare extreme of bearish sentiment, similar to the number made at the January market low and the August, 2007 low before that. Probably good for a decent bounce and extended sideways action, at least.
Suggestion for CR - Perhaps you can create a daily "stock post" we're the plebs can shoot the shjt, as Troy says. This should give the Tantas and Dawgs breathing space from idiots like me.
When the hell is a CDO, not a CDO....huh, huh...punk?
collateral management:
CDO Sponsorship. We receive one-time structuring fees and recurring collateral management fees that are payable during the term of the CDO program. These fees generally are calculated as a percentage of the face value of the collateral. If the net income from a CDO program meets certain prescribed targets, we may also be entitled to receive an incentive fee that is calculated based on the returns generated.
Re: structuring fees and investment syndication income that we earn when structuring or sponsoring NMTC funds and LIHTC funds;
Reported as a component of investment banking fees and syndication income in our consolidated statement of operation..
As a sponsor of LIHTC funds, we receive structuring fees and investment syndication income for organizing the fund, coordinating the fund's capital raising and arranging investments by the upper-tier partnership in one or more lower-tier partnerships, and we generally are paid asset management fees for the ongoing administration of a fund. We recognize a portion of these structuring fees and investment syndication income when services are completed and collection is reasonably assured. We also earn asset management fees for services provided to the LIHTC funds during the tax compliance period of the lower-tier partnership. These fees are recognized as earned and included in Asset management fees in the consolidated statement of operations.
We provide investment yield guarantees to investors in many of the LIHTC funds we sponsor. When we provide such a guarantee, a portion of the structuring fees and investment syndication income is deemed to be a fee in respect of the guarantee. We sometimes refer to that portion of the structuring fees and investment syndication income as "guarantee fees" in this document. These guarantee fees are deferred when received, and are amortized into income in each reporting period in proportion to the amounts of tax benefits and performance returns that are delivered to investors in satisfaction of the yield guarantees. This activity is reflected in Real estate syndication proceeds and related liabilities in our consolidated balance sheet. If a guaranteed LIHTC fund is unable to generate the yield required under the guarantee agreement through delivery of tax credits or losses to the guaranteed investors, we are obligated to pay the shortfall to the investors, or otherwise to bear the costs to improve the performance of the fund and enable it to generate the guaranteed yield.
Structuring fees and investment syndication income totaled $49.5 million for the year ended December 31, 2007 compared to a loss of $37.9 million for the year ended December 31, 2006. Structuring fees and investment syndication income decreased by $47.2 for the year ended December 31, 2006 compared to income of $9.3 million for the year ended December 31, 2005. As a result of the adverse developments in our LIHTC business, in 2005, we also recorded an impairment to goodwill associated with the business totaling $64.1..
Re: In return for performing primary and master servicing functions, we receive servicing fees that are generally equal to a specified percentage of the outstanding principal balance of the loans being serviced. We may also be entitled to other forms of servicing compensation, such as late fees and fees for additional services that we are requested to perform, including loan modifications, lease reviews and defeasance.
What I'm wondering is, regardless of whether the market goes up or down - great call, Anonymouse () - what's the impact of the SEC move on the short-selling.
Specifically regards the ultrashorts. There was a comment earlier in thread about shorting and the 21st, which I take to mean a warning. But what specifically?
OT to Anonymouse - I've gone back and read Ben Graham. What's a good primer that you can recommend for TA, written for those of us who suck at math.
No, I don't want a Yahoo style board either. But the present circumstances re SEC/ultrashorts/shorts/volatility seem to make it a necessity. Just like when the credit markets fart, we spend a lot of time smelling that, too. Hey, it's educational.
GM sold 51 percent of GMAC in 2006. GMAC's commercial-mortgage business was based in Horsham. It remains there under new ownership and a new name, Capmark Financial Group Inc.
GMAC still owns a residential-mortgage business, Residential Capital L.L.C., which has 1,869 employees in the Philadelphia area.
Timing the Trade: How Price and Volume Move Markets by Tom O'Brien, who has a daily market call-in show, is the best introduction to the <a href"http://www.traders.com/documentation/VolumeBooks_CD/wyckoff_bk.html>Wyckoff method that I know.
Check to see if your library has it because a $70 book that doesn't work for someone can be more of a downer than it should.
But my key advice here is to get your head into benchmarking volume, how market prices move up versus how they move down with volume. That's a key tell that today's move was bullshit. We've now taken out the high of yesterday's (all time record volume) bar with lighter volume (substantially so), and if we get a price failure tomorrow that sets up a test of Tuesday's low (the bottom of the all time record daily volume bar).
That doesn't necessarily mean we're immediately headed back to SPX 1200, but a rejection of that upper downtrend line I referred to earlier (near where we stopped) would be a strong indication it wants to head right back down there.
One last point. Before I discovered benchmarking volume I was blind - no doubt. I thought the Random Walk crowd probably were right. But volume confirms price - it's the ultimate sentiment indicator. That's why the market has had to keep testing these Intermediate Bottoms - they've all occurred on high/record high volume, and then retrace off the highs with substantially declining volume. Now that doesn't tell exactly when to buy and sell, but it's at least a great indicator that we will return to test these prices such as the SPX 1200.
homedad43 said: "OT to Anonymouse - I've gone back and read Ben Graham. What's a good primer that you can recommend for TA, written for those of us who suck at math."
"Trading for a Living", by Alexander Elder. Excellent "textbook" explaining a variety of indicators, how they (or at least how they're supposed to) work, along with the math behind them.
I have to share this tidbit I picked up recently about Ben Graham in an old, out-of-print book, "Stock Market Logic" by Fosback.
Graham was once considered to have been a phenomenal investor based on his record since 1948, but this story came out in 1976.
The secret to his "success" hinged on an insurance stock he bought in a private transaction for $.21 (yes, 21 cents) a share, GEICO (and yes, that one).
GEICO went to a high of over $50/share while Graham held it, but in the mid-70's (without the fundamentalists figuring it out) the company started losing money by tens of millions per quarter and the stock ultimately went to $2/share...while Graham continued to hold it.
JMO, but I think a lot of the "legends" have stories like that which don't ever seem to get out.
since we're doing stock tips now, I learned a lesson with BAC today. I got in @ $20, got bored with it, so I sold it @ $20, but I should have sold it with a .50c trailing stop. If I had done that I would have made 15% on the position today, instead of $0, assuming it doesn't gap-down tomorrow.
@but it's at least a great indicator that we will return to test these prices such as the SPX 1200.
I think this is true (good explanations, as usual AM), but has SKF gone into the danger-zone? It seems to be vulnerable to a lot of manipulation. When you look at the highs it's reached lately, it's hard to imagine those will retrace (why I'm holding SRS). But, hell, SKF could go even higher (I certainly thought 200 was a long shot, so what do I know!).
The dis-information regarding the "prohibtion" on short selling is hilarious.
Current rules say prior to effecting a short sale you must locate shares of stock that you will be borrowing.
As of Monday, for the 20 or so stocks listed by the SEC, you will have to either already borrowed or have arranged to borrow shares prior to effecting a short sale. This will impact specialists/market makers (both stock and option) if an exemption isn't granted since if they have to preborrow shares their financing costs will go up that will be reflected in wider spreads and/or reduced size of the quote. It would be somewhat analogous to what happens to puts when the stock is hard to borrow. Most option market makers hedge short puts/long calls with short stock so if they have to start each day by "preborrowing" shares and paying the financing costs for stock they don't end up selling short will be reflected in the pricing.
The ultrashort funds don't actually short stocks directly. They gain exposure via a daily return swap with one of several counter parties (CSFB and MS I think and maybe UBS - read the prospectus its in there). The swap counter party will hedge their exposure most likely by being short futures or a basket of stocks - they will have to make sure they can borrow the stock prior to shorting it - it may cause their hedging costs to go up which will result - most likely - in wanting to charge the ultrashort funds more money for the swap exposure.
But maybe I'm just talking out of my ass like some others on here - YMMV, IMNAL, WIWCSC(wishing i was currently smoking cannabis), etc. etc. etc.
So it seems that the stock market is verboten as a topic? That must be because it has no relation to the economy I guess? So the recent fall in the markets must, therefore be due to manipulation by naked shorts.
I think there should be a stock mkt
thread every day for the duration of the emergency.
Mtges are almost impossible to get in Florida at least from a line cut across the state slightly north of Tampa and Orlando. Don't know much about north of there. Even hard equity lenders don't want to lend. Spoke to a mtg broker yesterday who said even at less than 50% loan to value ration, they are reluctant to lend. That 50% of now prices, not peak prices, which were at least 30% higher than now. Secy has a friend in the mtg brokerage business somewhere between here and Orlando. Related a story of an old lady who owed just a little on her mtg, and had got behind on her taxes and wanted to re-fi. No deal. The property could not be appraised. The only comps were foreclosures and the appraiser felt he couldn't use just them. Virtually all the properties around her house were in foreclosure. The only non-foreclosures were people, who like her, had owned for forever. Ok, so now we are reaching housing Armegeddon--how else would you describe it when an appraiser feels he cann't give any appraisal at all?
This means NOBODY will be able to finance those REOs that the banks are just realizing they must sell at a severe discount. It will take a while for the numbskulls to realize that in order to get rid of them, they have to finance 'em. There is opportunity here, but unfortunately I am not a zillionare, so I can't take advantage of it.
A bottom has to be found in housing. 40% off, 50% off, 60% off, whatever.
(forget the towers, they are future wellfare housing).
If there is no bottom, will housing be like stocks in the depth of GD I?
Somebody posted at worst that the stock mkt was off 90%.
In South Fla, 50-55% off seems about right to me for a single family house.
We bought in '81 for $108 and sold about 12 years ago for 130. Given, say 3% inflation a year, and not compounding, because I am too lazy to do it, that results in a reasonable price of about 160-170; whereas I am told those houses sold at peak for about 350-360. 75% off peak gives a figure of 80 grand. This seems totally ridiculous to me. Less than an '81 purchase price? For a nice neighborhood? But that's what's gonna happen if nobody steps up to the plate and starts financing purchases.
Sorry for all this off stock mkt track stuff.
I like reading about people's fun & games with the mkt; just more interested in houses.
Read this from Adam B at Big Pic. Makes sense and haven't heard anyone mention it here:
"There have been lots of stories of witch-hunts today 30 subpoenas sent out by the SEC to various hedge funds and iBanks (Goldman Sachs is one, along with SAC and Citadel, two of the largest hedge funds) inquiring about improper trading practices (i.e. naked shorts, rumour-mongering, etc.) Apparently the SEC makes lots of noises and blows lots of wind, but they havent actually sent out subpoenas en masse like this since the market timing scandal a few years back.
Now, if you were the head of compliance at an investment bank or hedge fund, and you received subpoenas from the SEC regarding your trading practices in U.S. financials, what would you do? Would you instruct your CEO to unwind any off-side trades in a hurry? Where would you start? Probably naked shorts, right, because they are easy to discover in the system.
And what has been the dominant hedge-fund bet this year? Short financials and long energy you say? Ahah! So when you unwind your financial shorts you have to unwind your energy longs. I see.
I think this unwinding process began yesterday. Volumes in the banks support the short-covering thesis as well. Fannie and Freddie volume was strong but not as strong as yesterday."
the rumor on the street, MER was the largest lobbyist of short restriction. Today they sell BlackRock, tomorrow Bloomberg, a week ago both. There is something fishy in here. NOT THAT I SUGGEST TO SHORT IT. It's just smells as a bad earning report, that's all.
As of SKF lovers, told you. A 100% jump in valuation, does not reflect cash inflows, and it's mostly about emotions, rumors and false expectations...
I'm not sayin' my former house will sell in the 80s, but I am sayin' that if there is no financing then there is no bottom whatsoever. I have a few ideas which might help this, but I don't know anybody with billions of dollars who wants to make more billions. Ghost of Joe Kennedy are you out there somewhere?
And yes, mp, it is that bad. And it is even worse in the inner circle of doom, from whence Cobradriver writes, Ft Meyers/Cape Coral.
After reading this blog for a while I have the notion that the spike in the price of oil is the result of a deal to keep the falling dollar pegged to Mid East oil. The dollar falls 50%- just hike oil 100%. If I am right the stock market should be in for quite a ride.
Next thing you know they'll be talking about conflict of interest in Congress...or corruption... or whether or not Pelosi has had a face stretch. You know...all the real mysteries.
Tim Osmond | 07.16.08 - 4:12 pm | #
no mystery there. just LOOK at her face - it is obvious.
hey, when can I buy who works for an educational institution making $10.50 an hour ... why don't you take advantage of your employers offer of a free education and make something better in your life?
Lawyerliz said... but I am sayin' that if there is no financing then there is no bottom whatsoever.
How so? There are townhouses within (admittedly rather long) commuting distance of DC that are going for $50,000. I've been considering the possibility of buying one outright. If they were in someplace I was really interested in living I'd probably buy two. If prices get low enough, you don't need no stinkin' financing.
In my neck of the woods, housing is in a frenzy. All foreclosures of course.
LOL. Stock prices are sticker than home prices!
The median price paid for a Southland home was $355,000 last month, down 4.1 percent from $370,000 in May and down 29.3 percent from $502,000 for June 2007. The peak of $505,000 was reached in March, April, May and July of last year.
TIMBERRRRRRRRRR
talk about asymmetry - slow to call tops, quick to call bottoms.
I dont see a number for re-foreclosure resales...am I missing something?
Wow. Now can someone please import these price drops to the Pacific Northwest. This time we'll actually welcome something from California, promise.
A foreclosure driven-market is what we have in large part. Exclude the few stable Southland markets like Santa Monica and Coronado Island where there are few foreclosures, and you have a majority foreclosure market.
Nonetheless, inventory of foreclosures at the banks I have been tracking went up quite a bit.
Banks for the past 2-5 months have finally been trying to dump foreclosures on the market, but even at "dump" prices they are still selling to slowly.
NOO is low, that is a change in wording of the last paragraph.
Lots of shadow inventory still not on the market...thounsands of REO's waiting to come to the market means prices will go lower.
I wish they quoted short sale stats because I think they are a growing and more significant part of the market. Foreclosure activity doesn't give the whole picture. The banks are defining the marke more and more.
If we do get a market rally til the end of the month, the jobs report first week of August may stop any rally cold.
look at skf, very tempting
Pretty soon you will be able to get a home cheaper in California than in most places in the Pacific Northwest. That can't last long...
Hmmm, Cramer is on Bubblevision shouting for regulation of the market.
In another news, Cubs win the World Series.
Lefty, careful with those rumors there. Half of Chicago would drop dead with shock at that.
INTRADAY VOLATILITY DISCUSSION:
Got out of some of my DEC '08 SPY puts that I'd held since last November today. Felt like it was time to take some profits, and that we might see some sort of continuing rally over the next few weeks.
About the only thing I feel really comfortable with right now is SRS, and I hope I'll be able to pick some up below 90 before too long...
I found this interesting:
"The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,671 last month, down from a $1,713 the previous month, and down from $2,430 a year ago. Adjusted for inflation, the current payment is at its lowest level five years."
$1671 a month doesn't seem too bad. Tax adjusted in Calif. that's like $1000 bucks a month. Now, I know that doesn't count upkeep, property taxes, HOA's, etc. but it seems like we're fast appproaching real affordability. And CF positive for investors.
Here in Palo Alto, bubble is still very much alive "everyone wants to live in Palo Alto"
Hmmm....someone mentioned Santa Monica and Corodnado. Next to Malibu, Ventura coast and Santa Barbara, those are the only places in Southland that I regard as inhabitable. The rest is slum, too far from coast or has too long a commute...or all of the above. Looking at what a slum most of Southland is, I say an average house price over USD 100.000 is a robbery.
Meant to say that other places are not suitable for human habitation and that for average home price in Southland, anything above USD 100.000 is a robbery.
Is there any way to get an idea of what lending standards are now. How many poetential homeowners are being rejected. What kind of down payments are now being required, credit scores, that sort of thing. In short, how hard is it to get a loan?
"The rest is slum, too far from coast or has too long a commute..."
Well damn me from Europe, I would think that for you, anywhere around here is too long of a commute. Your from Europe!
In other news, the west side of LA is immune. Go on, ask anyone here. Or, just look at current prices. ;-P
"That was up 3.0 percent from 16,917 the previous month"
Woohoo. The bottom. And with a huge inventory, you get to cherry pick the home you want. I am in!
Newport beach is definitely not slum, throw in a dozen other beautiful cities. Mr. Europe where do you live?
Must be Geneva....
Knife catching is a trick you can only perform once. They gonna run out of buyers by Fall.
Gulp!
Ahem....
AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!
GASP!
AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!
Thank you. You may return to your normal viewing.
Cheers,
Wonder when the next foreclosure wave starts. You know, when all those people who bought foreclosures a few months ago. You know, when prices were a few gazzillion dollars higher.
Cheers,
Holy smokes, look at SKF... down nearly 20% today.
I work for the University of California and I make $10.50/hr. Do you think I will be able to buy a home soon? The UC system is generously offering me a 25% pay increase in the next five years.
IndyMac being looked at by FBI for fraud.
My landlord is trying to negotiate a deal with the lender, the house isn't foreclosed and is not behind in payments, as far as I know. I wonder what the chances are of a "balance adjustment". The other issue was a large prepayment penalty if a refinance was ever sought.
Come on guys -- where are the delicious comments about the market action today?
Markets go up and down.
Did the trend actually change today?
I got out of SKF about 2 minutes before close yesterday. I'm a genius!
Palo Alto and the rest of Silicon Valley is a bubble within a bubble. There's a high concentration of wealth steeped in the ground there. It will take years for that to dissipate.
I work for the University of California and I make $10.50/hr. Do you think I will be able to buy a home soon?
Used Winnebagos should be getting cheap pretty soon I would think.
Margin call HELL for the shorts today. The only sector taking a hit is oils...
Which campus of UC?
Granted, median prices for resale homes are misleading, due to shift in mix to less expensive homes, and no accounting for upgrades, but...
Median price of a resale home in San Diego peaked at $574K in May '06. June '08 is $405K, down 29% from peak.
Here in La Jolla, median price of a resale home peaked at $2.356MM in May '06. June '08 is $1.222MM.
Given that La Jolla volumes are 1% of San Diego volumes, it is more appropriate to compare moving averages.
Six month moving average price for a La Jolla resale home peaked at $1.948MM in May '06. June '08 is $1.568MM, down 19% from peak.
Yep, the slowdown is hitting the high-end community of La Jolla.
I would say that today definitely proves we're nowhere near a bottom. Way too much buying at the slightest hint of optimism. Oh well... good chance to reload for the next leg down.
I got out of SKF about 2 minutes before close yesterday. I'm a genius!
Just think if you rolled it into DUG. Or even better, UYG.
Not saying I have the guts for that kind of thing.
U.S. Stocks Gain; Wells Fargo Leads Financials to Record Rally
U.S. Stocks Gain; Wells Fargo Leads Financials to Record Rally - Bloomberg.com
Just think if you rolled it into DUG. Or even better, UYG.
Not saying I have the guts for that kind of thing.
I was thinking of going long UYG earlier this morning. Kicking myself now...
Also kicking myself for having written covered calls against the DUG that I bought on Monday!
Might keep going, too, with Google reporting Thursday evening.
U.S. stocks rallied, sending financial shares to their biggest gain ever, after profit at Wells Fargo & Co. topped analysts' estimates and oil dropped for a second day.
Just confirms the old adage that the biggest rallies occur in bear markets.
Leads Financials to Record Rally
only JPM and WFC are above their 5 day high.
Fractional lending confidence restored!!! Get in line, DOW 13,000 by the end of the week!
Ame
you can thank me for the rally today. Right after I sold BAC @ $19.9 for a $60 loss the market rocketed.
ac writes:
Just confirms the old adage that the biggest rallies occur in bear markets.
Killjoy.
I'm telling you guys, it's all because I chased that bear away yesterday.
I figure the news tomorrow will be good, but it was leaked to insiders today, so there will be a sell off on good news tomorrow.
FBI probes IndyMac
Business, financial, personal finance news - CNNMoney.com
As in why bother? Not any individuals, just the company. So nobody did anything criminal??
the BAC Jan-10 option I'm in has gone up 40% since yesterday (not that I've seen any of that gain)
Aheadofthecurve writes:
I'm telling you guys, it's all because I chased that bear away yesterday.
Startled it more like, it'll be back for dinner.
Aw, Mr. Beach, can't we shorts just lick our wounds in peace?
I have complete confidence that this is a pump job. Terrible economic news all around: CPI, homebuilder confidence, home prices, Wachovia earnings off 23%.
It is irrational for the market to be up today.
But, no problem. The S&P will have to move up a lot more -- 13% -- PPT schmucks/shylocks/shysters before I get a margin call.
Nice try, though.
OT- Someone noted on another board that puts were still a great buy yesterday on SKF if it held between 160 and 210 until expiration friday..it looks like someone else knew that..could hav been calls..
Looks like my limit order for SKF @ 85 is about to go through.
DD49 writes:
Not any individuals, just the company. So nobody did anything criminal??
All those darn computer algorithms.
What I find interesting here is that if you do an XY plot for the May and June prices for the different counties you get a linear relation -- that is the same relative decrease in price in June regardless of the May price.
"schmucks/shylocks/shysters" You described your average short-seller to a T.
Ahead of the Curve:
Well hell, I repaired my leaking disposal then too.The kitchen smells minty fresh now. Unleash the bulls.
OT, but those Brits are so fun!
Re: It may be up to Bernanke and Paulson today to either save the USD from the abyss or to push it over. They are scheduled to speak before a House of Representatives committee on new measures they will be promoting to prevent the catastrophes that got us into this problem in the first place - namely, misguided "financial innovation" at the investment banks that provided such potent punch bowls for Great Credit Bubble of the mid-Naughties (2003-2007).
Wrote Wachovia, meant Wells Fargo.
Hey, maybe one of you PPT schmucks will be interested in selling your nice La Jolla home here in a few-to-six months, once the rug gets pulled out from under you.
Gimme a call, then.
I presume you will accept gold?
Lefty-Not time for bulls. What we need is price stability.
"schmucks/shylocks/shysters" You described your average CEO and BOD insiders and traitors to America!
FBI probes IndyMac
Business, financial, personal finance news - CNNMoney.com
Better late than never.
Hey guys the bottom is in!!! I'm going long big time!
(Hehehe just kidding.)
apart from the schmucks/dopes/snarkers, who's left in the US, other than our esteemed hosts?
Oh and short-sellers are great patriots. They're just helping the ordinary joe to lose his shirt. What magnanimous fellows!
The new story is on dollar intervention and I'm ahead of the curve, just a bit!
Licking my wounds too. Feeling manic depressive these days. Not sleeping or eating well.
Troy, there is a small contingent of us 'alert, forewarned, forearmed' sheeple variant left.
JG,
La Jolla is nice..Throw a party when you get it! Walk to Blacks!
SRS play dangerous with Reit earnings next 2 wks, any upside surprises and with IYR off 40% already..could be similar movement down as skf today...of course it's down 15% today..
Short sellers depend on retarded management and corruption which fuels falsified and illegal EPS reports...bitch
AOTC,
The market is a mug's game; if you can't stand the heat get out of the kitche
A-o-t-c-, yeah, and I should piss away my money buying some dope's home now, too, huh?
Gimme a break.
You think, buy low now, sell high later.
I think, sell high now, buy low later.
BFD; we have a difference of opinion.
How unpatriotic.
ac,
I love the topping expectations game - 90 short days ago the expectations were for .57/share - now the beat is .53/share vs. the .50/share expected...riiiiiiiiiight
Back to the salt mines; chat with you tonight.
Sebastian you little pump monkey I'm still right here, and well feed with a full belly of mounatin oyseters Don't forget to get out on this desperation market manipulation. See ya, in a couple of weeks.
After I heard WAMU proclaim a couple days ago that they were well-capitalized
I should bought a 1000 shares. Then dump them tomorrow....
"schmucks/shylocks/shysters" You described your average short-seller to a T.
Haha, what? Are you trolling, joking, or actually stupid enough to believe that?
Think Oil is going to tank from here And trade below $100 anytime soon? NO WAY.
Even if $130 support fails(not shown on this weekly chart)and oil gets down to the 110 area, buyers will come and bid it up.
This BEAST hasn't even touched its 40 week avg since last Spring 2007.
China plus alot of emerging markets NEED OIL!!!!!
How do you SKFers like your haircuts? Or is that decapitation? Don't feel bad, I got out way too early at 150.
Fannie, Freddie spent $200M to buy influence
Fannie, Freddie spent $200M to buy influence - Yahoo! News
Discuss please.
Its time to hide in cash for a while, but who knows what the next 24 hours holds? Those pictures of people waiting for their money at Indy Mac didnt create much fear. I'll wait till I see movement up in SDS,TWM,and SPK.
When these fools get off TV, some fear will set in, and then wait for a few BKs.
La Jolla is nice..Throw a party when you get it! Walk to Blacks!
Damn it, are we going to have to rescue you off the cliffs too?
a sad day for SKFiers. It takes time to recover the loss and all you need is patience.
Re: Fannie, Freddie spent $200M to buy influence
Seems to be working for pennies!
China plus alot of emerging markets NEED OIL!!!!!
mikhail
Venezuela plus a lot of emerging markets need to sell theirs even harder. Can't finance your own terror guerilla without it.
O-Joe
When a stock goes up 20% in three days, it's time to get out, SKF.
very true, speed
OT OT, Well I got f'ed around today trying to day trade SKF. Very few bounces, didn't take profits soon enought. Good lesson in using tight stops, though. Didn't lose much.
This move in the financials will not last long. It's just trying to find its way back to some sort of uppper downtrend line, probably having a hard time finding one because they've been crushed!!
Oh my god! Indymac fraud?! Hard to believe.
Hey...if Wesley Snipes is too elusive for this gov, better set your sites on something easier to find.
Next thing you know they'll be talking about conflict of interest in Congress...or corruption... or whether or not Pelosi has had a face stretch. You know...all the real mysteries.
Now everyone, take all that new wealth to the Del Mar Races, which opened today.
Every scorching day in this bear has been followed by a failer or a big gap down. Which one will we get tomorrow?
Meh...While you guys have been bitching at each other about who's the greater thimblewhit a short seller or long holder (? this second one is never made explicit...) I built a blog server. It's pretty cool actually.
Not sure what to do with it...Sloooow day in the bit mines.
Cheers,
Speed writes:
When a stock goes up 20% in three days, it's time to get out, SKF.
Is the reverse also true? If it goes down 20% in one day, is it a buy?
They've stolen my beloved CalculatedRisk and put up a yahoo stock forum instead. Tell me this is temporary.
ac,
I love the topping expectations game - 90 short days ago the expectations were for .57/share - now the beat is .53/share vs. the .50/share expected...riiiiiiiiiight
Yeah, the sad truth is to really do well in these markets you've got to think like you're running a scam yourself. Then things start to make a bit more sense.
It's just kind of a necessity to survive.
I believe two or three days ago I predicted a big rally driving SRS down below $100 headed towards $80.
Since I'm not a patriot, according to people like AOTC, and my prediction is coming true, I will take this wonderful opportunity to provide for my family. A family of hardworking savers. A family of 30% down payments. Of one car per family. Of one TV, found used in the garbage. A family of no debt. A family of producers. We are hard working, debt fearing, savers who don't believe the lies we are told by our government, the CEO's or the media. Bad bad people.
Now, all you patriots should go shopping like the president wants you to. Go on, children, do as you are told. SUVs are on sale. No thinky for you. Maybe you could stone some unpatriotic people on the way to the mall? Shop, shop!
I think the financial headline today should have been: "Races open today at Del Mar, California: Stocks Rock!"
They've stolen my beloved CalculatedRisk and put up a yahoo stock forum instead. Tell me this is temporary.
Yeah, the S&P 500 is up 2.5% today in a monster rally, let's not talk about it, it's so boring...
Alternatively, you can start contributing yourself!
What's a blog?
12th,
I took my profits on SRS earlier, was happy to see it go on sale.
AOTC says I'm an unpatriotic sort as well. Might be true, I favor honest government, hard work, frugal living, and realistic expectations. I also think the neocons should be given a fair trial and then hung from the lampposts. I want my country back.
Dawg is a great contributor, dood. Whataya new?
12th-If you're such a hard-working salt of the earth type (by the way, you pretty much described me) then why are you so lazy as to short (or buy) entire indices that lump the foolish and the well-run together? Do some research and identify the really crooked or idiotic and short them and/or the really smart and honest and go long them.
KILL the shorts, we have a friggn Rally!!!! Rally, Rally, Rally!! Go baby go!! PPT kicked some ass!! Rally, Rally, Rally
Fried,
Here's our country according to George Carlin..Could him and Ron Paul be right? I dare say yes...
YouTube -
Happy 4:20 everyone! Spark it up!
ROBOT BALLs,
Try Tinactin or machine oil
Rob Dawg moaned: "They've stolen my beloved CalculatedRisk and put up a yahoo stock forum instead."
I share your pain.
Perhaps CR can do something about that when he ditches HaloScan.
@12th-If you're such a hard-working salt of the earth type (by the way, you pretty much described me)
Nobody wants to hear the sanctimonious bs, aotc.
Currently Smoking Cannabis is 4 minutes late as usual
Yo 12th: I have a very nice looking rear end. Girls like it and they call me "apple ass."
So there.
pretty easy, just screen against SRS SKF SDS
not sure about SOL though.
OT - The NYTimes had an article on people taking in roomers/homesharers to help defray living expenses. They did touch briefly on the possibility of zoning issues.
But what,if any, are the tax consquences of say having one, two, or more renters paying say $400.00 per room.
Yes, I'm old enough to remember real boarding houses.
don't know if bears get it. W/ all the impending doom & gloom , market brushed it aside like a flailing mosquito.
Man i am long in this market. Let bears weep/whine in their "gothic" cult.
I'm "long" in the 20+ years sense. Does that count?
I'd like to be long too, except that this looks more like the last oily trick in the bag (a good one though -works a lot better than getting bush on the telly or paulson trying to take a load off fannie)
I'll go up when I feel the floor under me. It ain't now.
Rob Dawg,
This is temporary, though recurring episodic malady. It is part of the price of success and the mannerly fashion in which CR arbitrates these forums.
Tanta, on the other hand will soon be kicking some @ss (he said hoping it won't be his own).
Foreclosures all around me in beach town 15 miles from San Diego - foreclosures, short sales one and all. Four houses down from me on nice quiet wide street - $369K will get you a 3 br/2ba home with 6000 sq ft lot (big by socal standards) and new pool installed 2 years ago, about 9 blocks from the beach! Come on down folks!! This is nuts!
I live in the wine country (northern napa valley, CA) home prices here haven't budged - in fact they continue to rise. Inventory stays on the market a little longer, but it eventually sells. mostly expensive stuff too.
SKF=$-45/share...told you so, shorting individual S&L is much more reliable ...
p.s. short while you can (don't, if you are unwilling to lose 50% of your SPECULATION investment:) cause starting 21 (just before earnings are out) you may not be able to do so...
I also would not day-trade, if you must wait till the next bank collapses:
St. Louis Fed: Series: LLRNPT, Assets at Banks whose ALLL exceeds their Nonperforming Loans
St. Louis Fed: Series: NCOCMC, Commercial Net Loan Charge-offs
St. Louis Fed: Series: USLLRTL, Loan Loss Reserve / Total Loans for all U.S. Banks
if you do not think so, look the above up and think again.
p.s. it is unwise to hold on shorts for long period of time, and shorts are much riskier then most of us imagine; but then again those opportunities are so tempting.
CR,
Sorry for the OT post, but the ABX index ABX-HE-AAA 06-1 is doing some serious cliff diving
despite improvement in today's equity markets.
sounds like a good time to look into purchasing some property in southern Cal!!
12th Percentile:
Now, all you patriots should go shopping like the president wants you to. Go on, children, do as you are told. SUVs are on sale. No thinky for you. Maybe you could stone some unpatriotic people on the way to the mall? Shop, shop!
Delicious.
A nice bear market rally back to 12,500.
Hope you guys timed this one as well as me
Sorry for the OT post, but the ABX index ABX-HE-AAA 06-1 is doing some serious cliff diving despite improvement in today's equity markets.
How dare you make a non-stock related post. >:(
Home prices that I follow in 6 zip codes have been declining steadily over 12 months at 1.5% to 2.0% per month through March, with a noticeable increase from April to July of 3-4% per month, confirmed by the 4.1% May to June drop at DataQuick, and possibly explained by increased bank selling.
Rising NODs with steady to rising bank inventories combined with aggressive selling and you've got Dirksen's corollary: 4% here and 4% there and pretty soon you're talking big money, 50%, home price declines.
Only reason they're here is because concern about the economy/markets has gone apparent and mainstream. They're suddenly googling away for new info sources and, yoikes! what do you know, CR's been mentioned a few places. They're infestation is almost an index in itself. I miss the slower more U-nerdish CR as well, although I was certainly more of a lurker then. I was trying desperately to keep up with the vocab. and arcane structures of CDOs. hermeneutical head-bashing was the order of the day. sigh
Cannabis, Dawg:
You guys are the best.
How bout those buds?
cklimen writes:
sounds like a good time to look into purchasing some property in southern Cal!!
Homes in my County have been losing $18.50 per hour for the last year. The curve is one of exponential decay. Think inverse CPI.
Well, to keep AOTC in good spirits: my levered, 2X short the S&P 500 portfolio was down 8% for the day.
Kind of funny, almost.
Big beta, my single bet portfolio: trough was one year ago; peak was yesterday, up 73% from trough.
Tonight at dinner, we have another enlightening discussion about the stock market, and how my daughter levered us up (yesterday morning) just before a big down day.
She pressed the 'sell short' button, then we watched the E-Trade baby video ('I just bought stock', burp, mess).
Good clean fun, thumbing our nose at the schmucks.
Will T
I understand what ABX index is, but could you take a minute and explain what the blue categories mean. What is HE-Penna 07-02. series, version, and on down the line.
Thanks
A terrific and valuable blog, but what's with all the trading talk? Annoying and off point.
Just another bear market day - 13% in XLF in a single day. Tough to be on the right side from day to day.
Massive whipsaw.
hermeneutical head-bashing was the order of the day. sigh
It's prole drift scav...they always bring down things to their level.
A terrific and valuable blog, but what's with all the trading talk? Annoying and off point.
gilbert | 07.16.08 - 5:02 pm | #
Don't forget - Very profitable.
It's okay housing will turn around in 2009 because the NAR said so.
Plus, there is no reason why it can do anything but go up from here:
Incomes, jobs/unemployment, interest rates, lending standards, inflation, food/energy costs...
Oh, wait...home prices CAN fall?
FBI investigating IMB.
AP: FBI investigates possible fraud at IndyMac | L.A. Land | Los Angeles Times
gilbert writes:
A terrific and valuable blog, but what's with all the trading talk? Annoying and off point.
That's a matter of opinion. (The annoying part that is, not the terrific and valuable part which I completely agree with). CR & Tanta provide excellent information, but if you can filter through the garbage you'll find just as much, if not more, rewarding information in these here comments; housing related or otherwise. I'm happy to have it all.
Based strictly on self-reporting, it appears that CR readers make eight profitable trades for every losing one. I am humbled to be surrounded by such genius.
it appears that CR readers make eight profitable trades for every losing one
Yes, most gamblers only tell you about the wins, seldom about the losses. But if you read these threads, they're all beating the best money managers on the planet. Somehow, I think not. But hey, I don't get my trading methodology from haloscan, so what do I know?
29% doesn't shock me at all. I estimate my house is down 32%, and I'm in Orange County. Inland Empire is down 40% and still plummeting. My neighbor's house sits vacant - not promising. Wish they'd turn off the hall light - shines into my house.
I think the stock talk has gotten carried away (myself def. included!), but it's unreasonable to think it shouldn't be discussed at all. I mean, we talk about tiny price movements in housing in obscure neighborhoods all the time. When there are huge index swings such as the ones that have occurred in the past few days, people are going to want to speak about them. Just my .02, double shorted.
so it sounded yesterday like the PPT wants to do for the entire market what they did today for F and F etc.
no more shorts??? is that the deal?
hmmm wonder what the long term effect is?
My tract is down 28%. The same houses were turning during the orgy and they just resold 28% off the top. This is the cheaper area of Orange County. ($502k now for 1600 sq/ft on 6000 sq/ft lot)
query_tool asserted: "Based strictly on self-reporting, it appears that CR readers make eight profitable trades for every losing one."
They do even better on the Yahoo! message boards.
And I'm the Easter Bunny.
I get my trading advice off the back of sugar packets. I used to use equal packets, but I found out aspartame is poisonous so I stopped. Some of the voices in my head say I should try splenda packets or even sweet'n'low. But I refuse. Sugar packets have Suweet advice.
Sometimes I try to get trading advice by divining patterns in the beer bubbles on the side of my pint glass. While difficult at first, it gets much easier after 4 or 5 readings. Problem is, I can never remember them the next day.
Cheers,
I understand what ABX index is, but could you take a minute and explain what the blue categories mean. What is HE-Penna 07-02. series, version, and on down the line.
the PENAAA/AAA/AA etc just refers to the inital rating of the bonds backing that index. (PENAAA means Penultimate AAA, which are AAAs that get paid earlier than the "last cash flow" AAAs, which are what the regular AAA index represents. basically, the PENAAAs are a "higher credit quality" AAAs.)
07-2/07-1 etc refers to the period when the index was launched. (07-2 was launched in the second half of 2007 and includes securitizations from the first half of 2007, etc.)
Nice to see you back, bacon dreamz.
simple answer, aotc.
I invest based on low risk fundamentally sound decisions. The CRE market is overvalued. I can make a healthy return shorting the whole market with low risk. Anyone who is long CRE is basing their investment decision on what? Patriotism?
I'm not trying to be warren buffet. I want 20% a year.
If discussing SRS, which is based on commercial real estate REITs, isn't something people want to do here, that is fine by me.
good luck.
Granted, they're a part of the whole thing and not without interest, but then, how 'bout some nerdish analysis of all things stockish and not the relentless micro comparison of trades which reminds me nothing so much of a bunch of old farts in a bar saying "Well, the Northern I caught was THIS LONG. Fought it for thirty-leven hours too!" I presumably can learn to bang my head about something in this conversation, but damned if I've caught sight of it yet.
12th Percentile fantasized: "I want 20% a year."
Wow!
Good luck with that.
They headed down to, ooh, old El Paso
That's where they ran into a great big hassle
Billy Joe shot a man while robbing his castle
Bobbie Sue took the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and run
Go on take the money and ru
"Silly old bears" to paraphrase AA Milne...
U.S. `Misery Index' Climbs to 15-Year High on Prices (Update1)
By Timothy R. Homan
July 16 (Bloomberg) -- Misery hasn't had this much company in more than 15 years.
The jump in consumer prices reported today by the Labor Department means the so-called Misery Index, the sum of the unemployment and inflation rates, is the highest since President Bill Clinton took office in January 1993. The measure, created by Arthur Okun, an economics adviser to President Lyndon Johnson, rose to 10.5 in June from 9.7 in the prior month.
Surging costs and falling payrolls will cause consumers to slow spending growth to the weakest pace since 1991 by the fourth quarter, according to a monthly survey of economists by Bloomberg News. The figures underscore Federal Reserve Chairman Ben S. Bernanke's comment to lawmakers yesterday that U.S. households are under ``tremendous pressure.''
``You add that to what's going on with home prices and that's just a huge stress on consumers,'' said Robert Dye, senior economist at PNC Financial Services Group Inc. in Pittsburgh.
The year-over-year inflation rate accelerated to 5 percent, the fastest since May 1991, the Labor Department said. A separate report July 3 showed a 5.5 percent unemployment rate for June.
Today's consumer price index data also showed wages fell 2.4 percent over the last 12 months, after adjusting for inflation.
[snip]
I'm short AA Milne
I could earn like $30bazillion a year if I moved to Zimbabwe and invested my zimbabwe dollars in US $'s. Course, my standard of living would be noticibly lower...but I'd make great returns.
Cheers,
20% a year is alright. I've seen better.
What kind of pipe are you using? I've got a bubbler.
energy,
"Today's consumer price index data also showed wages fell 2.4 percent over the last 12 months, after adjusting for inflation."
Well that's encouraging. Core CPI?
Cheers,
Why so much bitching about discussing the equity markets? CR's banner reads Calculated Risk FINANCE AND ECONOMICS. This is finance.
Today's move was bullshit. Example: SPY Yesterday hits a multi-year low on 500 million shares, today goes up with 360 million shares. My SDS I bought 1 minute before the close is already up 1% after hours (I know, big yawn, but we could get a nice gap down and sell off tomorrow).
mockturtle
Amended regulation SHO does not eliminate short sales. Dealers are required to locate specific shares to short prior to short sale execution.
So far the stated intention is to limit the rule to 30 days, starting next week. a dozen or so firms in addition to freddy and fannie are expected for inclusion.
This is finance
actually, talking about the day's trades isn't finance, it's shooting the shjt.
Now if you could present a cogent argument for WHY today moved as it did, then that would be finance and, almost, tangentially related to the thread.
AOTC,
The market is a mug's game; if you can't stand the heat get out of the kitche
Yeah, Troy, I'm just shooting my shjt like all those other terrible calls I've been making lately. Today's move stinks, and Thur/Fri will be a major tell. We either skyrocket up in a V-shape off the bottom or we crap back down to Tuesday's lows. It's as simple as that.
Now, as Citigroup prepares to announce second-quarter results July 18, those off-balance-sheet assets, used by U.S. banks to expand lending without tying up capital, are casting a shadow over earnings. Since last September, at least $100 billion of assets have flooded back onto Citigroup's balance sheet, accompanied by more than $7 billion of losses.
If you start adding up all the potential exposures, it's a huge number,'' said Sam Golden, a former ombudsman for the U.S. Office of the Comptroller of the Currency who now heads the financial-industry practice for restructuring adviser Alvarez & Marsal in Houston.The banks will say that it was disclosed. Investors are saying, `Yeah, but it was cryptic. We really didn't know what you were telling us.''
12th Percentile fantasized: "I want 20% a year."
Over the last several years I've been able to make those returns in real estate. I'm closing on my last property in 2 weeks and will be out of real estate for now.
I see the impending CRE crash as a once in 20 year opportunity. I don't believe it will be hard to make 20% this year as that crash begins. Or next year as it continues. I plan to do this by using SRS.
I don't expect it to always be this easy.
Anonymouse -- are you saying the market is either going to up or it's going to go down?
Misean,
"I built a blog server. It's pretty cool actually."
How about a follow up project: A Haloscan replacement.
Keep it simple like Hscan, but add the reliability thingy.
It'll be done in week? Cool. CR will make good use of it.
Best,
TED SPREAD, UN FARO NELLA NEBBIA! ( AGGIORNATO !!!!! )
TED SPREAD, UN FARO NELLA NEBBIA! ( AGGIORNATO !!!!! ) | icebergfinanza
Il ritorno dei CDO, la loro reincarnazione, una sorta di pulizia generale dalle scorie radioattive dei vecchi CDO, fuori i prodotti strutturati di basso livello e pezzi subprime da poter vendere separatamente con rendimenti presunti di oltre il 20 % e dentro obbligazioni tripla A sempre che oggi possa essere considerato rischio adeguato e minor frazionamento rispetto alle centinaia di assets che potevano comporre un CDO.
Bacon Dreamz.
Thanks for the help. It does take some deciphering. I'm too embarassed to tell you what I thought Pen stood for in front of the AAA.
See? That's why we need registration - at a minimum.
Misean
were you the one who told me to go buy nachos and peanuts? I went long Taco Bell and Planters, but when I got back to the table you were gone, and so was the pitcher of beer.
Damn, I thought, I'll get no more stock tips.
No tips, huh? TIPS, no TIPS . . . Think I'll go sell my US Treasury TIPS.
What's that Bart Simpson, eat your shorts????? Market advice is everywhere, if you just know where to look.
Meanwhile, I've learned a lot about the real estate biz and its economics from reading CR, and I've refrained from buying a house since I first became interested in 2005. And though I always thought W was a disaster, and thought him a war criminal since 2002-03, I am more impressed now than ever by his incomptence and the most definitely anti-creative destruction he has wrought on this country. Learned some more about that here, too.
query_tool,
If the SPX can close above 1260 we're heading to 1290; otherwise it's back down to 1200. I suspect we'll just gap down and sell off. Volume declined today. And the SPX closed right near the upper downtrend line est. June 5th. That's why I say "It either breaks the downtrend line and will higher or it rejects it."
hey ipodius, this one's for you.
Maybe Terry could approve the comments before they appeared.
Troy said: "...Now if you could present a cogent argument for WHY today moved as it did, then that would be finance and, almost, tangentially related to the thread."
Well, at least I can make a worthwhile contribution on that subject.
Yesterday there were 1147 new 52-week lows on the NYSE, a huge amount representing a rare extreme of bearish sentiment, similar to the number made at the January market low and the August, 2007 low before that. Probably good for a decent bounce and extended sideways action, at least.
Sebastia
Suggestion for CR - Perhaps you can create a daily "stock post" we're the plebs can shoot the shjt, as Troy says. This should give the Tantas and Dawgs breathing space from idiots like me.
F-Ck it, I'm starting a new embedded thread here:
When the hell is a CDO, not a CDO....huh, huh...punk?
collateral management:
CDO Sponsorship. We receive one-time structuring fees and recurring collateral management fees that are payable during the term of the CDO program. These fees generally are calculated as a percentage of the face value of the collateral. If the net income from a CDO program meets certain prescribed targets, we may also be entitled to receive an incentive fee that is calculated based on the returns generated.
Re: structuring fees and investment syndication income that we earn when structuring or sponsoring NMTC funds and LIHTC funds;
Reported as a component of investment banking fees and syndication income in our consolidated statement of operation..
As a sponsor of LIHTC funds, we receive structuring fees and investment syndication income for organizing the fund, coordinating the fund's capital raising and arranging investments by the upper-tier partnership in one or more lower-tier partnerships, and we generally are paid asset management fees for the ongoing administration of a fund. We recognize a portion of these structuring fees and investment syndication income when services are completed and collection is reasonably assured. We also earn asset management fees for services provided to the LIHTC funds during the tax compliance period of the lower-tier partnership. These fees are recognized as earned and included in Asset management fees in the consolidated statement of operations.
We provide investment yield guarantees to investors in many of the LIHTC funds we sponsor. When we provide such a guarantee, a portion of the structuring fees and investment syndication income is deemed to be a fee in respect of the guarantee. We sometimes refer to that portion of the structuring fees and investment syndication income as "guarantee fees" in this document. These guarantee fees are deferred when received, and are amortized into income in each reporting period in proportion to the amounts of tax benefits and performance returns that are delivered to investors in satisfaction of the yield guarantees. This activity is reflected in Real estate syndication proceeds and related liabilities in our consolidated balance sheet. If a guaranteed LIHTC fund is unable to generate the yield required under the guarantee agreement through delivery of tax credits or losses to the guaranteed investors, we are obligated to pay the shortfall to the investors, or otherwise to bear the costs to improve the performance of the fund and enable it to generate the guaranteed yield.
Structuring fees and investment syndication income totaled $49.5 million for the year ended December 31, 2007 compared to a loss of $37.9 million for the year ended December 31, 2006. Structuring fees and investment syndication income decreased by $47.2 for the year ended December 31, 2006 compared to income of $9.3 million for the year ended December 31, 2005. As a result of the adverse developments in our LIHTC business, in 2005, we also recorded an impairment to goodwill associated with the business totaling $64.1..
Re: In return for performing primary and master servicing functions, we receive servicing fees that are generally equal to a specified percentage of the outstanding principal balance of the loans being serviced. We may also be entitled to other forms of servicing compensation, such as late fees and fees for additional services that we are requested to perform, including loan modifications, lease reviews and defeasance.
12th%:
Bought SKF last year and sold yesterday morning. 114% net after fees. No trading in and out.
Bought SRS at the same time. 20% gain? Quite possible. We'll see.
Re: Maybe Terry could approve the comments before they appeared.
Ooops, did I just fuck up?
You just know that Kudlow is going to be insufferable tonight. Will skip it and go out to dinner, and eat some bear.
Days like this I really can't stand Jim Cramer...
Bought SKF last year and sold yesterday morning. 114% net after fees. No trading in and out.
Nice work. That must of been a hell of a ride.
12th Percentile:
Just not a day trader. Not fond of all that angst. I don't expect returns like that.
I share your view of SRS, got in last year and am perfectly willing to watch the secular rallys come and go.
What I'm wondering is, regardless of whether the market goes up or down - great call, Anonymouse (
) - what's the impact of the SEC move on the short-selling.
Specifically regards the ultrashorts. There was a comment earlier in thread about shorting and the 21st, which I take to mean a warning. But what specifically?
OT to Anonymouse - I've gone back and read Ben Graham. What's a good primer that you can recommend for TA, written for those of us who suck at math.
No, I don't want a Yahoo style board either. But the present circumstances re SEC/ultrashorts/shorts/volatility seem to make it a necessity. Just like when the credit markets fart, we spend a lot of time smelling that, too. Hey, it's educational.
So Anony, 12th,
I wonder if we'll see 200 again!
GM sold 51 percent of GMAC in 2006. GMAC's commercial-mortgage business was based in Horsham. It remains there under new ownership and a new name, Capmark Financial Group Inc.
GMAC still owns a residential-mortgage business, Residential Capital L.L.C., which has 1,869 employees in the Philadelphia area.
See Also: Capmark Financial Group Inc.
http://www.secinfo.com/dVut2.t7Te.htm
See also: Hidden CDO fu
Yah gotta love all the new subs that have new subs! I like the Crystal Ball Holdings In Bermuda!
Capmark Financial Group Inc S-1/A
Crystal Ball Holding of Bermuda LTD
Commercial Equity Investments/Inc
Net Lease Acquisition LLC
Capmark Finance Inc
Capmark Investments LP
SJM Cap/LLC
Mortgage Investments/LLC
Capmark Capital Inc
homedad43,
Timing the Trade: How Price and Volume Move Markets by Tom O'Brien, who has a daily market call-in show, is the best introduction to the <a href"http://www.traders.com/documentation/VolumeBooks_CD/wyckoff_bk.html>Wyckoff method that I know.
Check to see if your library has it because a $70 book that doesn't work for someone can be more of a downer than it should.
But my key advice here is to get your head into benchmarking volume, how market prices move up versus how they move down with volume. That's a key tell that today's move was bullshit. We've now taken out the high of yesterday's (all time record volume) bar with lighter volume (substantially so), and if we get a price failure tomorrow that sets up a test of Tuesday's low (the bottom of the all time record daily volume bar).
That doesn't necessarily mean we're immediately headed back to SPX 1200, but a rejection of that upper downtrend line I referred to earlier (near where we stopped) would be a strong indication it wants to head right back down there.
Sorry, bad link for <a href="http://www.traders.com/documentation/VolumeBooks_CD/wyckoff_bk.html>Wyckoff method above.
One last point. Before I discovered benchmarking volume I was blind - no doubt. I thought the Random Walk crowd probably were right. But volume confirms price - it's the ultimate sentiment indicator. That's why the market has had to keep testing these Intermediate Bottoms - they've all occurred on high/record high volume, and then retrace off the highs with substantially declining volume. Now that doesn't tell exactly when to buy and sell, but it's at least a great indicator that we will return to test these prices such as the SPX 1200.
homedad43 said: "OT to Anonymouse - I've gone back and read Ben Graham. What's a good primer that you can recommend for TA, written for those of us who suck at math."
"Trading for a Living", by Alexander Elder. Excellent "textbook" explaining a variety of indicators, how they (or at least how they're supposed to) work, along with the math behind them.
I have to share this tidbit I picked up recently about Ben Graham in an old, out-of-print book, "Stock Market Logic" by Fosback.
Graham was once considered to have been a phenomenal investor based on his record since 1948, but this story came out in 1976.
The secret to his "success" hinged on an insurance stock he bought in a private transaction for $.21 (yes, 21 cents) a share, GEICO (and yes, that one).
GEICO went to a high of over $50/share while Graham held it, but in the mid-70's (without the fundamentalists figuring it out) the company started losing money by tens of millions per quarter and the stock ultimately went to $2/share...while Graham continued to hold it.
JMO, but I think a lot of the "legends" have stories like that which don't ever seem to get out.
S.
since we're doing stock tips now, I learned a lesson with BAC today. I got in @ $20, got bored with it, so I sold it @ $20, but I should have sold it with a .50c trailing stop. If I had done that I would have made 15% on the position today, instead of $0, assuming it doesn't gap-down tomorrow.
@but it's at least a great indicator that we will return to test these prices such as the SPX 1200.
I think this is true (good explanations, as usual AM), but has SKF gone into the danger-zone? It seems to be vulnerable to a lot of manipulation. When you look at the highs it's reached lately, it's hard to imagine those will retrace (why I'm holding SRS). But, hell, SKF could go even higher (I certainly thought 200 was a long shot, so what do I know!).
The dis-information regarding the "prohibtion" on short selling is hilarious.
Current rules say prior to effecting a short sale you must locate shares of stock that you will be borrowing.
As of Monday, for the 20 or so stocks listed by the SEC, you will have to either already borrowed or have arranged to borrow shares prior to effecting a short sale. This will impact specialists/market makers (both stock and option) if an exemption isn't granted since if they have to preborrow shares their financing costs will go up that will be reflected in wider spreads and/or reduced size of the quote. It would be somewhat analogous to what happens to puts when the stock is hard to borrow. Most option market makers hedge short puts/long calls with short stock so if they have to start each day by "preborrowing" shares and paying the financing costs for stock they don't end up selling short will be reflected in the pricing.
The ultrashort funds don't actually short stocks directly. They gain exposure via a daily return swap with one of several counter parties (CSFB and MS I think and maybe UBS - read the prospectus its in there). The swap counter party will hedge their exposure most likely by being short futures or a basket of stocks - they will have to make sure they can borrow the stock prior to shorting it - it may cause their hedging costs to go up which will result - most likely - in wanting to charge the ultrashort funds more money for the swap exposure.
But maybe I'm just talking out of my ass like some others on here - YMMV, IMNAL, WIWCSC(wishing i was currently smoking cannabis), etc. etc. etc.
Is that kinda link LEND or NEW?
*like
So it seems that the stock market is verboten as a topic? That must be because it has no relation to the economy I guess? So the recent fall in the markets must, therefore be due to manipulation by naked shorts.
I think there should be a stock mkt
thread every day for the duration of the emergency.
Mtges are almost impossible to get in Florida at least from a line cut across the state slightly north of Tampa and Orlando. Don't know much about north of there. Even hard equity lenders don't want to lend. Spoke to a mtg broker yesterday who said even at less than 50% loan to value ration, they are reluctant to lend. That 50% of now prices, not peak prices, which were at least 30% higher than now. Secy has a friend in the mtg brokerage business somewhere between here and Orlando. Related a story of an old lady who owed just a little on her mtg, and had got behind on her taxes and wanted to re-fi. No deal. The property could not be appraised. The only comps were foreclosures and the appraiser felt he couldn't use just them. Virtually all the properties around her house were in foreclosure. The only non-foreclosures were people, who like her, had owned for forever. Ok, so now we are reaching housing Armegeddon--how else would you describe it when an appraiser feels he cann't give any appraisal at all?
This means NOBODY will be able to finance those REOs that the banks are just realizing they must sell at a severe discount. It will take a while for the numbskulls to realize that in order to get rid of them, they have to finance 'em. There is opportunity here, but unfortunately I am not a zillionare, so I can't take advantage of it.
A bottom has to be found in housing. 40% off, 50% off, 60% off, whatever.
(forget the towers, they are future wellfare housing).
If there is no bottom, will housing be like stocks in the depth of GD I?
Somebody posted at worst that the stock mkt was off 90%.
In South Fla, 50-55% off seems about right to me for a single family house.
We bought in '81 for $108 and sold about 12 years ago for 130. Given, say 3% inflation a year, and not compounding, because I am too lazy to do it, that results in a reasonable price of about 160-170; whereas I am told those houses sold at peak for about 350-360. 75% off peak gives a figure of 80 grand. This seems totally ridiculous to me. Less than an '81 purchase price? For a nice neighborhood? But that's what's gonna happen if nobody steps up to the plate and starts financing purchases.
Sorry for all this off stock mkt track stuff.
I like reading about people's fun & games with the mkt; just more interested in houses.
Since I "used to be" a real estate atty.
Lawyerliz, wow. I'd heard things were really bad there, but I didn't realize things were that bad.
Read this from Adam B at Big Pic. Makes sense and haven't heard anyone mention it here:
"There have been lots of stories of witch-hunts today 30 subpoenas sent out by the SEC to various hedge funds and iBanks (Goldman Sachs is one, along with SAC and Citadel, two of the largest hedge funds) inquiring about improper trading practices (i.e. naked shorts, rumour-mongering, etc.) Apparently the SEC makes lots of noises and blows lots of wind, but they havent actually sent out subpoenas en masse like this since the market timing scandal a few years back.
Now, if you were the head of compliance at an investment bank or hedge fund, and you received subpoenas from the SEC regarding your trading practices in U.S. financials, what would you do? Would you instruct your CEO to unwind any off-side trades in a hurry? Where would you start? Probably naked shorts, right, because they are easy to discover in the system.
And what has been the dominant hedge-fund bet this year? Short financials and long energy you say? Ahah! So when you unwind your financial shorts you have to unwind your energy longs. I see.
I think this unwinding process began yesterday. Volumes in the banks support the short-covering thesis as well. Fannie and Freddie volume was strong but not as strong as yesterday."
the rumor on the street, MER was the largest lobbyist of short restriction. Today they sell BlackRock, tomorrow Bloomberg, a week ago both. There is something fishy in here. NOT THAT I SUGGEST TO SHORT IT. It's just smells as a bad earning report, that's all.
As of SKF lovers, told you. A 100% jump in valuation, does not reflect cash inflows, and it's mostly about emotions, rumors and false expectations...
Scary anecdotes, L-L-.
Makes sense, M-m-.
Thanks!
I'm not sayin' my former house will sell in the 80s, but I am sayin' that if there is no financing then there is no bottom whatsoever. I have a few ideas which might help this, but I don't know anybody with billions of dollars who wants to make more billions. Ghost of Joe Kennedy are you out there somewhere?
And yes, mp, it is that bad. And it is even worse in the inner circle of doom, from whence Cobradriver writes, Ft Meyers/Cape Coral.
After reading this blog for a while I have the notion that the spike in the price of oil is the result of a deal to keep the falling dollar pegged to Mid East oil. The dollar falls 50%- just hike oil 100%. If I am right the stock market should be in for quite a ride.
Next thing you know they'll be talking about conflict of interest in Congress...or corruption... or whether or not Pelosi has had a face stretch. You know...all the real mysteries.
Tim Osmond | 07.16.08 - 4:12 pm | #
no mystery there. just LOOK at her face - it is obvious.
hey, when can I buy who works for an educational institution making $10.50 an hour ... why don't you take advantage of your employers offer of a free education and make something better in your life?
when - i -bought,
Working for UC Berkeley does not get you admittance or free tuition.
But I'm sure you already knew that ?
Lawyerliz said... but I am sayin' that if there is no financing then there is no bottom whatsoever.
How so? There are townhouses within (admittedly rather long) commuting distance of DC that are going for $50,000. I've been considering the possibility of buying one outright. If they were in someplace I was really interested in living I'd probably buy two. If prices get low enough, you don't need no stinkin' financing.