VP of Common Sense

Total Rating:
0 / 0

61 Comments

    • Wed Apr 23rd 22:04 PM | Rating: 0 0
      Commented on:
      The Impending Mortgage Crisis
      disclosure (up front): I am not a realtor and the only property currently I own is my house.

      Having lived in Massachusetts, Maine, Kentucky, Arizona, and Tennessee since 2000 real estate really is LOCAL. At one point or another I owned property in 4 of those 5 states and while KY and TN were fairly similar the rest were wildly different. The reason I bring this up is the general predictions in this article, or any nationwide analysis for that matter, are crap.

      The market in St. Louis will never mirror Los Angeles other than by coincidence. I purchased my house in Memphis, TN at the 'peak' in 2006. The only previous transaction was in 2001 when the house was built, and the original owner paid only 13% less than what I paid in 2006. From 2001 to 2006 my community and all surrounding communities increased in mean sales price, my community grew significantly, had new schools built, etc. Yet there was no bubble in Memphis.

      Conversely I owned a vacant lot in Flagstaff, AZ that I bought in September 2004 and sold in April 2007. I made a 59% profiit in 32 months. Again, no real change in the surrounding neighborhood. That was a true bubble market.

      Finally I have a friend in SoCal whose house value is off about 50% since 2005. However his fairly nice house is still worth $90-100/sqft. If that happened in Indianapolis, Memphis, or Nashville NEW houses would be going for $40/sqft. Having built houses for a living that will never happen other than at an auction.

      Looking at the 'Map of Misery' (great graphic btw!), payment option mortgages are 25%+ in ONLY California and <5% IN 30 STATES! Realisitically we know Nevada, Arizona, Florida will probably also take it on the chin, but Alt-A's and Option-ARM's are not going to swing the market in areas where they represent <3% of total mortgages.

      House prices are not going to fall "another 20-30%" nationwide as this article implies. They are going to fall (and already have) much more than that in some areas and much less in others. That is why financial companies like Downey (DSL) are so interesting from a negative standpoint, because we know that their exposure is not nationwide.

      So, I think this was a well researched, well written article based on an extremely flawed underlying assumption that the local real estate markets will suddenly start moving in unison nationwide.

      View article »
    • Tue Apr 22nd 13:10 PM | Rating: 0 0
      Commented on:
      General Discussion on DSL
      Sell sell sell!
      View forum topic »
    • Thu Apr 3rd 02:57 AM | Rating: 0 0
      Commented on:
      Stock Valuations On the Rise
      Plus much of the financial sector earnings from 2004-2007Q2 came from products that have a vastly diminshed place in the market.
      View article »
    • Tue Mar 11th 16:59 PM | Rating: 0 0
      Commented on:
      Spitzer: Self-Destruction
      Let's see, his "career" was little more than a lark as his family is worth a reported $500mm. And his career, between troopergate and his 30% approval rating, may well have been shot anyway. So what exactly did he lose here? Some dignity, and a laundry list of family/personal problems. Seeing as his father holds most of the family wealth I imagine the Spitzers are out a couple million bucks and a public black eye. Sob sob.
      View article »
    • Thu Mar 6th 21:56 PM | Rating: 0 0
      Commented on:
      Downey Financial on Shaky Ground
      Ok, I actually did a thumbnail analysis:

      Negatives: All that said above, plus my freinds in southern California will vouch for all the news stories of significant devaluation. In some communities house values are off close to 45%.

      Positives:

      1. A significant amount of construction loans, which by definition should have much higher equity than any other residential loan.
      2. DSL is an actual bank, with more branch's than TMA has employees. I take this as a sign of diversification of assets.
      3. Lower leverage (~8:1) than TMA.

      However the 400lb gorrilla remains. If a run is made on their assets they are a small, leveraged company. It won't take much to drive them under. So I have yet to take a position, but I am still leaning towards short.
      View article »
    • Thu Mar 6th 17:55 PM | Rating: 0 0
      Commented on:
      Downey Financial on Shaky Ground
      Common sense says this is an early stage Thornburg. I say short it!
      View article »
    • Wed Mar 5th 17:28 PM | Rating: 0 0
      Commented on:
      Thornburg's a Huge Bargain After Monday's Crash
      Two things:

      1. Kudos to Jack for putting his money where his mouth is.
      2. It seems like if the other banks are going to make a "run" on Thornburg, or are in the process of doing so, now might be a good time to not buy. Being in the loan servicing business for the time being, every day more cash comes in. At the same time TMA's upper management *should* know exactly what they are up against. They need to raise cash, or their quality leveraged assets may be called in. So my guess is they will be driven under OR raise enough capital to survive within the next 45 days. At the moment buying this stock appears little better than a coinflip, but that's the tradeoff for trying to pick it up at absolute rock bottom.
      View article »
    • Tue Feb 26th 23:09 PM | Rating: 0 0
      Commented on:
      Greenspan's Latest: Oil Boom Will Likely 'Go on Forever'
      Forever eh? Based on his previous predictions that would be a clear short sign.
      View article »
    • Tue Feb 19th 18:22 PM | Rating: 0 0
      Commented on:
      The Current State of the Solar Energy Sector
      Re: Smokey - Why don't rich people have solar array's?

      Vanity. The same thing that explains most of their purchases.
      View article »
    • Tue Jan 29th 20:40 PM | Rating: 0 0
      Commented on:
      (Bill) Grossly Overstated
      So if 1/3 of countrywide's subprime mortgages are in default, that would be a long way from 2%, right?
      View article »
    • Mon Jan 21st 12:25 PM | Rating: 0 0
      Commented on:
      2008 Earnings Estimates Overly Optimistic; Bottoming Process Beginning?
      We've been bear for <4 months, and we're already at the bottom? What a bullish commentary.
      View article »
    • Sat Jan 19th 20:37 PM | Rating: 0 0
      Commented on:
      Hewlett-Packard Looks Recession-Proof
      Bonds and shorts are bear proof.
      View article »
    • Sat Jan 19th 20:26 PM | Rating: 0 0
      Commented on:
      The Fear Is Palpable. Time To Buy.
      I think the bottom, or within a couple percent, will be apparent when VIX comes down a bit. To say it another way, it's not going to go back up as fast as it has come down.
      View article »
    • Mon Jan 14th 19:39 PM | Rating: 0 0
      Commented on:
      Vice Fund Beats “Faith-Based” Investing
      5.5% load! That's not christian...
      View article »
    • Tue Jan 8th 21:33 PM | Rating: 0 0
      Commented on:
      Bear Stearns Looking Decidedly Cheap
      Nope, the most logical explanation is that Felix is high.
      View article »
Loading...
Symbols:
Authors:
Quick Links:
Contribute an Article Become a Seeking Alpha Contributor

Transcripts

More Transcripts»