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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: aerosappy who wrote (19987)	7/31/2003 11:36:18 AM
From: kodiak_bull	Read Replies (1) \| Respond to of 23153

Aero, As for the homeboys, I think buying puts is an acceptable alternative to going short. Puts contain their own issues, of course, and maybe the slippage and timing issues are uncomfortable. In any event, if you look at the charts, as hard as shorting might seem, I can't imagine taking a pure long position here. There's also a Greenspan aspect here. If I have the story correctly, the Fed put out the story that they would stand ready to buy long bonds (produce demand, which would keep interest rates low) through the Treasury. Which caused institutions around the world to buy long bonds. When Greenspan in testimony took back that promise, bond prices fell and interest rates rose. Today it's reported that average interest rates are 6.26%, compared to 5.28% on June 11. miami.com Let's say you were about to buy a $500K house and borrow $300K. In June your monthly cost would have been $1662, but now it's going to be $1848, and over the course of a 30 year loan your house is going to cost over $66,000 more. Now, we know that people don't buy houses based on a clear understanding of the asset value of the house (except the vague idea/hope that real estate always goes up!) but rather on the basis of monthly/payment affordability. The monthly cost of borrowing just took an 11% rise due to a slightly less than 1% rise in the annual lending rate. So the fundamental view on real estate and real estate lending has to be changing, swiftly, for the worse. If rates hit 7.50%, that will tack on another 11% rise in housing cost. How long before the builders (with their refinancing businesses) begin to plummet? As for GMST, I won't discuss the FA, but the TA had a sort of play to it. First, its trend has been higher, with higher highs, etc. I was hoping to see it solidify (as it seemed to be doing) at the round number $5 line and re-rise above the 20 dma. It hasn't worked out that way. Kb

To: aerosappy who wrote (19987)	8/1/2003 7:02:56 PM
From: energyplay	Respond to of 23153

Problems with shorting the homeboys - They have land banks - land bought at low prices long ago for future develpoment. Without detail analysis (red: work) this is hard to know. They could sell one of those parcels, and then would have t omark up the value - a write up , not a write down. Might decicde to decalre a special dividend... They are gaining market share at the expense of smaller local builders, and have low cost capital. Value metrics are still reasonalbe. *************** when I short, I want an absurd valuation, a disaster, or crooks....