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Strategies & Market Trends : The Residential Real Estate Crash Index

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From: ChanceIs	10/22/2009 9:47:34 PM
	Read Replies (2) of 306849

Hangin' at the AEI..... Wells gals and guys, I attended the VIth semi annual "Deflating Mortgage Bubble" at the AEI, featuring a star studded cast with Roubini et al. I have these salient remarks to share with you: Pollock: - today we have extend and pretend, aka delay and pray; - (small/regional) bank exposure to CRE at historic levels; - small bank CRE at 75%; Zimmerman, Tom: - works on Wall Street and is considered a bear, come to AEI and is considered a bull (Hint, hint,,,the mania is back on the Street) - Housing "appears" to have stabilized; California bounced but is flat; affordability at historic high; foreclosures at record high; banks cheating (my words) by not foreclosing the 90+ day bucket which is getting huge; (RE crash) isn't "over yet by any means;" "HAMP" (about the 4th mortgage bailout) isn't going well; 18 year olds are signing up in significant numbers for the $8L credit; - (bank) regulation is necessary but not sufficient ... any idiot can find a way to make $$$ off of a regulation and what we need are regulators with some scrods; Whalen, Chris: - quip ... regulators come to the battlefield late and bayonet the wounded; - GSE has become America's business model of choice ... WFC is highly stressed .... JPM is fourth on his list (below WFC) and is looking real shaky (hint: short WFC) - big banks (TBTFs) are earning 50% more in interest than the small banks ... thank you taxpayers through the Discount Window at 0%; Citi has a 6% loan loss rate ... some metric) indicates that the Street think Citi might fail (Meredith are you letting C. Whalen upstage you???) - bank industry (ex TBTFs) at a stress level of "5" whereas normal is "1"; - NOBODY is getting 30 days to pay anymore ... everything has gone to CASH ON DELIVERY (IOW vendor financing is DEEAD); figuratively speaking (perhaps for real) CISCO is no longer financing routers; - too many longs (in equity??? sorry couldn't write fast enough) "collapse imminent"; - all of our "leaders" today are interested in the 'international government'; we especially pay heed to our international creditors; - some bank ... Allied "whatever" ... is basically insolvent but is still advertising for loans and almost boasting that it can end run the rules (isn't it some sort of crime for an officer to make a loan from an insolvent bank?); Roubini, Nouriel (Personal Comment: Nouriel seemed back in his summer '08 form .... confident, understated. I think he was shaken by the magnitude of the bounce. And he still looked like s&^t with his neck tie intentionally mussed.) - markets pricing in "V" but will be flat recovery; - probabilities "U" 60%; "W" 20%; "V" less than 20%; - there are effectively 3MM more jobs lost on reduced work week; - is a balance sheet recession ... private debt/equity flat but government through the roof; - in "V" recovery, consumption grows at rate greater than GDP ... capacity utilization rate is 70% ... more but out of time.

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