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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: loantech who wrote (1769)11/5/2003 8:38:43 PM
From: russwinter  Read Replies (4) of 110194
 
Tom, this from the TOL report. The question I have of you is, can anything go wrong with these contracts, or are they as good as gold ? $580,535 per house.

Note: the MBA purchase index of loan applications has fallen from an average of 414 per week in Sept to 385 per week in Oct. Toll wouldn't comment on new October contracts in the call, just general market conditions, which are still fairly robust. $40 for the stock is unjustified in my mind, especially if the purchase index continues to soften. Note the purchase index for the comparative period a year ago was 350-360. It averaged about 420 in the quarter just ended.

Fourth quarter 2003 contracts of approximately $1.02 billion
(1,757 homes), also the highest for any quarter in the Company's
history, grew by 55% versus 2002's record fourth quarter of
$656.6 million (1,205 homes). FYE 2003 contracts of approximately
$3.49 billion (6,161 homes) rose 27% compared to 2002's FYE record of
$2.75 billion (5,113 homes).

Some good commentary on refi and purchase activity that repeats a lot of what we've said here. However, one thing that stands out is the overlay of inverse interest rates and refis. 6% today engenders a fraction of the activity of 6% a year or two ago:
prudentbear.com
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