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Banks Are Bearish, or Hedging, Financials and Real Estate

Wait a second. Your article states that the institutions' holdings were as of the end of first quarter 2008. Yet you also point out the May highs. How can you be sure that the banks did not pare down their holdings of SKF and SRS between the end of March of mid May?

UltraShort Real Estate ETF: The Only Safe Haven for Commercial REITs

John the Bear,

Mortgage REITs like RAS make up a small portion of IYR and SRS. For SRS to really move up, equity REITs need to show weakness.

UltraShort Real Estate ETF: The Only Safe Haven for Commercial REITs

While I agree that REITs are likely to drop in price, keep in mind that the preferred metric is Funds From Operations (FFO), not forward earnings. Granted, FFO is a metric created by the REIT industry, so maybe it's not a true measure of a REIT's financial health (anyone remember those late 90's upstart telecoms that were promoting their EBITDA instead of earnings?). But the fact is that FFO is what is used by the investment community to evaluate REITs. So an analysis of forward FFO might be more appropriate.

Are REIT's Fairly Valued?

What about the REITs that are claiming that they have their tenants locked into long-term leases, therefore preventing FFO from decreasing even during a recession?

Are REIT's Fairly Valued?

So what you're saying is that REITs' prices are being helped by the Fed's rate cuts and other recent liquidity actions. Makes sense. But are REIT stock prices only sensitive to interest rates? What events/conditions could bring down those rosy FFO numbers?