WallStTider

California Home Sales: 43% Year Over Year Increase!

"In contrast to the national news that existing home sales rose from June to July but are still below the levels from a year ago,"

You lost me right there, and that was just the first sentence. It's not hard to show an increase in home sales if you keep revising the previous month's number down each month later. The fact that you never refute this and even seem to go along saying that "California is bucking [this] trend" tells me that you, like many others here have pointed out, have no idea what you are talking about.

California Home Sales: 43% Year Over Year Increase!

"In contrast to the national news that existing home sales rose from June to July but are still below the levels from a year ago,"

You lost me right there, and that was just the first sentence. It's not hard to show an increase in home sales if you keep revising the previous month's number down each month later. The fact that you never refute this and even seem to go along saying that "California is bucking [this] trend" tells me that you, like many others here have pointed out, have no idea what you are talking about.

Why Subprime Loss Estimates Are Still Too High

Wow, that's some of the most delusional logic I've ever heard. Go ahead and buy your bank stocks. You're one of the suckers I'll make money off of.

2 Homes For Price Of 1 Ripoff

20% off of houses that are in an area that's already down 20%+ and probably has 20%+ more to go? Sign me up.

How Long Until the Housing Market Recovers?

Agreed. An incredibly naive and selective opinion piece by the WSJ. The tightened lending standards will push many low credit buyers out of the ownership market and back into rental, but perhaps most importantly, it will no longer be possible for speculators to make the quick gains as they did in the past with the no-money down, infinite returns that drove prices so high to begin with. The housing crisis is nowhere near over. Do we have a better idea of where it is heading now? Yes, well, I thought we did until reading the WSJ piece.

Berkshire Hathaway's Derivative Play

Nate C,
Did he sell at-the-money or out-the-money puts? I'm not sure, and I can't find it. If he sold either of those types of puts, then I agree that more than likely, he's got a good thing going, especially while being able to invest the premia freely. Still, it's speculative by definition as you have tail-risk. Not that I believe "financial Armageddon" is occurring soon, but it has happened in the past that the indices decrease in 10-20 years. It's possible insurance companies would need to hedge at levels below the current market levels because of the inherent tail-risk of their business, but Berkshire's main business is also insurance, so who knows? Buffett no doubt has something up his sleeve that will make him and a lot of other people richer.

Berkshire Hathaway's Derivative Play

No offense, but if you're going to write an article about derivatives, you should at least get your terminology straight. First of all, it's "notional" value, not "notational." That word reeks of academia. Also, I'm not sure what you mean by "writing" a CDO-squared. Investment banks "underwrite" CDO-squared's, but in those cases, there is negligible, if any, counterparty risk to the underwriter. What I believe you were referring to is buying or selling protection on CDO-squared's using CDS. Counterparty risk does come into play then.

As for the merit of the argument or statement, whichever it may be, I'm not totally convinced that this move is purely speculative on Buffett's part as that would be totally out of character to use these derivatives for that purpose. It does seem like he's in effect doubling up risk on the surface, but it all depends on what he uses the premia for. Maybe he's looking to venture hard into the utilities business.