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Strategies & Market Trends : Value Investing
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To: Madharry who wrote (30482)3/30/2008 2:39:19 PM
From: Tapcon  Read Replies (2) of 78611
 
I read Whitney Tilson's T-2 Partners presentation of the Mortgage and Credit markets that made the case for being in the early innings of the mortgage credit fiasco. valueinvestingcongress.com
It's a lengthy set of slides that paint a pretty scary picture of problems yet to come, with most of the resets on liar and ninja loans still to come. Tilson's hedge fund is short the banks and bond insurers.

I sent that presentation to a friend who has a vast network of folks in the banking industry. He went thru the Tilson presentation and agreed it painted a dark picture. But he said for the last several months, most banks have been re-working their ARMS mortgages as soon as folks become delinquent -- they want to get these folks into long term fixed rate mortgages -- anything rather than going thru the foreclosure process.

Anyway, the negative case is totally out there and has been for some time. But some of the contrary signals are indicating Buy, as reported in those few Barrons articles:

Money-mkt cash, for example, is at $3.45 Trillion, vs. 2.2 Trillion at the market low in March 2003.

US domestic equity funds have seen a record 10 months of net outflows. The previous record was 8 months, following the 1987 stock market crash.

Conference Board Consumer Expectations Index is at a 17 year low.

Jumping in now may be going for the falling knife, or being somewhat premature, but the point I was raising is that the volume on some of those shares had fallen on Friday and still the prices fell. So I was just musing as to how big an effect it really is when portfolio managers attempt to paint a picture on their quarterly holdings by jumping out the last few days of the quarter.
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