10 Notes on the Current Market Fracas 11 comments
-
Font Size:
-
Print
- TweetThis
1) How to control your emotions when the market is nuts? Develop a checklist, or at least a strategy that makes you re-evaluate the fundamentals, rather than buying/selling indiscriminately.
2) What, one standard for revenue recognition? Impossible! Great! Revenue recognition is probably the most important issue in accounting, and whatever comes out of this will be important to investors. (If the standard is bad, value investors that watch the quality of earnings will gain additional advantages.)
3) America is too big to fail? You bet, at least to our larger creditors. As it stands now, our economy is partly propped up by foreign creditors. Remember, the mercantilists lost more than they gained. The same will happen here.
4) Tom Graff is a bright guy, and I respect him. He disagrees with my view on buying agency mortgage backed securities. He is worth a read.
5) Dark supply. There are many people who want to sell homes who have them off the market now waiting for better prices. There are investors buying properties hoping to flip them. These are reasons I don’t expect housing prices to come back quickly.
6) When I read this piece on Countrywide, I was not surprised by the existence of special deals, but only by their extent.
7) HEL and HELOC experience will continue to decline. Face it, on most home equity loans in trouble, the losses will be 100%. This will only burn out one year after the bottom in housing prices.
Fannie (FNM) and Freddie (FRE) have their concerns:
- Their books are being reviewed again.
- They are too big to fail, but they are in trouble.
- The Government is pressing them to lend more, but their capital bases say the opposite.
9) Loser rallies rarely persist, but that is what we have had recently.
10) Along with Barry, I do not believe that banks have bottomed yet. There are more credit losses to be taken, particularly as housing prices fall another 10%.
Related Articles
|
Find People on SA
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largest
increase in followers
in the last 7 days-
1
David Fry
-
2
Philip Davis
-
3
Tyler Durden
-
4
Bill Gross
-
5
Peter Schiff
Fastest Climbers » -
1
-
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most activeSee all
Instabloggers.
Top Instabloggers » -
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 11 comments:
The U.S is too big to fail and judging by the actions taken by the Treasury and the FED,so are the FRE and the FNM.In fact their failure (or any key financial institution's failure )would likely implode the U.S economy and then sequentially revert the global economy to the "Dark Ages".
The mistakes made should have been addressed two years ago..Now that financial sector is addressing the problems with an aggressive assistance from the FED and the Treasury let's focus on the mega vulnearbility of Europe and Emerging economies.U.S assets(stock market) are heading for historical highs if for the wrong reason.
old trader