You know times are bad in the housing industry when home builders hang up the hard hat and take to running leveraged hedge funds. Hell, they don't even have to be any good at it, because they are using 0%, non-recourse loans with very little of their own capital (bubble style leverage), thanks to YOU, Mr. and Mrs. Taxpayer bitching about unemployment and higher taxes. I hope this doesn't piss anybody off,,, again!
For anybody that values results over brand names, the housing market has a much rougher road ahead than many presume and banks are literally the walking dead! Having accurately called the fall of the WaMu, Countrywide, Bear Stearns, MBIA, Ambac, Lehman, residential and commercial real estate I am confident that the list of big name failures WILL EXPAND! Every single variable that can be plugged into a housing value equation is explicitly negative, save the manipulated mortgage interest rates (meaning another bubble to burst).
The TRS offers additional answers to the hard questions posed in the media, but are they good answers? I drill in a little deeper, and hope not to piss anybody off. I'm pretty sure I failed.
Any readers who read the back and forth between Tyler and TRS should ask themselves, "But why didn't the Fund answer these important questions?". Hey, they may not be in a death spiral, but when you make what looks like desperate moves and your returns are spiraling at the same time your liabilities are soaring, all the while your risk is flying through the roof... One should expect a blogger or two to take notice, particularly those bloggers who can count.
A cursory review of RIM's blowout earnings actually confirm my suspicions that the company is looking at material margin compression and significantly slower revenue growth as competition continues to eat Blackberries. Yes, the company looks fundamentally strong on the surface, but a broader perspective shows that it is weakening at a an ever quicker pace.
Hey everybody, bank shares are rallying world wide today. The banking problems are over and bubble times are hear again, courtesy of taxpayers world wide. Many problems and the results of those problems from 2007 are present right now! Ridiculous loans, moral hazard, frail counterparties, liquidity traps, risk concentration, ralliying stock prices... Will we ever learn???
JPMorgan Said to Test IPhone for E-Mail (that's 22,000 employees)as More Bankers Bypass BlackBerry the day after I give my nth warning that Research in Motion is in serious trouble due to the iPhone and Android! RIMM's daily chart looks sick! And this is just a couple months before the biggest Android upgrade ever comes to market, v. 3.0
The FDIC bank data from the 2nd quarter reveals that banks, despite extend and pretend, regulator passes, and kick the can down the road policies, are still feeling the CRE crunch. 15% of the "Construction and land development" loans are non-accrual status (dead money). Leverage that 12x to 25x (about what banks are reportedly carrying) and we are talking some pretty heavy losses. Then, of course, there the real numbers if one could just look past the extend and pretend...
Feel free to call your broker or sell side analyst who tries to get you to buy RIMM and show him this post. If they challenge further, my contact info is available on my site. The writing is on the wall.
This is part one of my update on residential real estate mortgages,
whose credit conditions have seen a marked improvement over the past
year. Of course (yes, you know there is always a but), I believe the
improvement is the result of the rampant government intervention in the
mortgage markets. As we shall see in part two for this update, even with
rampant intervention some of the major mortgage institutions are so
sick as to appear to be beyond mere assistance. Brace yourself for
Financial Meltdown 2.0, open source edition.
We performed an analysis of the correlation of the stock prices of
the companies that we have covered over the last two years to the
broader stock market. Based on the price movements in the selected
stocks and S&P 500 over the last decade, we mapped the pattern seen
in the degree of correlation that is exhibited when there are changes in
the overall market direction owing to change in the “perceived”
macro-situation.
As stimulus induced economic indicators drove financial markets
higher through the end of 2009 and into the middle of 2010, many
financial advisors and researchers believed the Great Recession was
taking its final breath and believed they bore witness to a forceful yet
successful example of a proper response to a endemic crisis by
policymakers around the globe.
Those who feel that CRE is a good buy now due to cap rate spreads over treasury yields are ignoring a) that treasuries are most likely in a bubble and b) this thesis if applied last year when spreads were even higher would have lost you a lot of money. Just because something costs less than it did when it was very expensive doesn't mean it is cheap. Being less broke then extremely broke still means that your broke, doesn't it???
