SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Residential Real Estate Crash Index
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: posthumousone who wrote (147849)9/18/2008 10:05:39 PM
From: patron_anejo_por_favorRead Replies (6) of 306849
 
I don't have much to add that hasn't been said. There are alot of proposals out there and we have no details. Generally....

1) Not short much here...just the bit of SRS I picked up at the close. Long GE, and a bunch of gold and oil stocks. No reason to be short here for awhile....if we get something like a shorting ban, you'll see an blast up lasting weeks, in all likelihood folllowed by a crash with no short covering to cushion the blow.

2) The RTC "solution" has a lot of unintended problems. First, 2008 is not 1989. The indebtedness and leverage employed by the now-distressed lenders is much, much larger (generally speaking). You'd mark down properties to place them in whatever receivership facility is designed. That mark would be a material event, and require corresponding marks on the part of derivative holders. Not what the banks really want. And although you'd take properties off the market, it STILL doesn't address domino #1: that buyers can't afford houses at current levels with current incomes. So you'd surely stretch out the pain, but how much of an improvement is this? Ask Japan (who also had problems designing a similar solution in that the banks balked at the markdowns they'd be facing).

3) This won't be construed as "dollar-positive" for very long. Moving risk to the taxpayer because the entire financial system could no longer handle it is hardly representative of a healthy economy or currency.

4) The moral hazard meter will absolutely break. This completes the most massive transfer of government funds from taxpayers to plutocrats in the history of mankind. Way to go, Merka!
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News