Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (247878)	7/1/2003 10:05:27 AM
From: Giordano Bruno	Respond to of 436258

Hmmm eom

To: yard_man who wrote (247878)	7/1/2003 12:15:48 PM
From: Perspective	Read Replies (2) \| Respond to of 436258

IMH is one scary hedge fund of a company. At least they are required to do a pretty thorough disclosure. Ever actually read their statements? They have expanded their assets at an extraordinary rate - more than doubled their balance sheet in the past year, boosting leverage from 15:1 a year ago to 20:1 now. What geniuses. Let's borrow billions at the short end of the curve and lend it out to lots of poor credit risks. Works pretty well... until it doesn't. Good thing for them real estate only goes up, and we're not Japan. <s> BC

To: yard_man who wrote (247878)	7/1/2003 12:21:00 PM
From: Perspective	Read Replies (2) \| Respond to of 436258

Did I mention that companies like IMH and FNM stand square in the way of Greenspan's goal of fighting the deflation with inflation? You can't inflate away the debt without crushing companies like these. What happens to the company when their 1.49% interest margin (borrowing at 3.0%, lending at 4.49%) goes negative, as borrowers get stuck in their overpriced houses and hang onto the mortgages, but short-term borrowing costs go back up? What happens to the housing market? And what happens to the economy? If Greenspan truly pursues a campaign of inflation, he will sacrifice this company and others like it (FNM, FRE) in the process. It is illogical to simultaneously believe in a rekindling of economic activity and purchase shares of these companies. BC