Channon

Things You Would Never Have Said Eight Days Ago

BTW, can the popularity of the ETFs such as SKF and UYG be adding to the volatility - that is, as big money is shifting from short to long, are firms taking advantage of the arbitrage opportunities and moving the prices underlying securities, causing more interest in going long?

Things You Would Never Have Said Eight Days Ago

Probably the closest I will have ever come to making a killing on options, but the timing has been so incredibly hard even when the movement and duration were perfectly called. WB moving +40% in the last 45 minutes after such horrendous results?! Painful.

They Said Housing Prices Couldn't Fall. They Lied.

"Affordability" does tie into interest rates. Sure down payment affordability matters, but beyond that, it's all about dollars per month. This is America.

If we believe that there was a structural change to long term rates "today" versus 25 years ago, that supports a one-time upward shift in the sale price of a house because that house really is more affordable in terms of monthly payment on a 30-year fixed mortgage. During the early run-up in the housing bubble, before all the speculators got in and Greenspan started cheering on the ARMs, one could watch the median price of a single family home in San Francisco County rise in parallel with real wages -- if the price were calculated in terms of monthly P&I on a 30-year fixed (prime). All was fine until 30-year rates stopped falling, at which point prices probably would have stabilized if the banks hadn't gone exotic in an attempt to keep Wall St happy on the top-line number continuing to grow.