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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Think4Yourself who wrote (48700)	2/18/2006 5:05:44 PM
From: Live2Sail	Respond to of 306849

JQP, Even if centex is hurting, BK can be staved off for a long, long time. I wouldn't count on it anytime soon, particularly if there is decent insider ownership. If they have all kinds of agreements that they want break, then they might try to declare BK quickly. I don't know, but I doubt that's the case with centex. Obviously you don't need a BK for you to make money w/your puts. L2S

To: Think4Yourself who wrote (48700)	2/18/2006 5:39:33 PM
From: Micawber	Read Replies (1) \| Respond to of 306849

A number of people who appear to be accountant types have indicated Centex is walking dead on this thread and others. Considering the fact that these number of people have been saying this about all of the homies for almost five years now may give some insight into their credibility, don't you think?

To: Think4Yourself who wrote (48700)	2/18/2006 5:44:09 PM
From: GraceZ	Read Replies (2) \| Respond to of 306849

They have almost an ideal lots held to controlled ratio for this point in the cycle at 2:3. Their inventory did build significantly (I think the pre-construction speculators bailed on them) and their unrestricted cash fell significantly, but they still have a very healthy portfolio of loans they could sell off to raise cash and they have a lot of profit on each house sold to cushion any price concessions. They would drop their buy back plan and dividend long before running out of cash. I think the fact that they are being aggressive in dropping inventory levels, is a good thing. The guy who does this the fastest when the music stops survives. Ryland does this as well at the very first sign of weakness, it is how they survived the last downturn which was pretty intense and lasted quite a few years. The ones who acted like business as usual ran out of cash and eventually got bought up by the strong at a discount. Still, while I don't think Centex is a BK candidate regardless of what the chatties here seem to think, your puts might still be good. Homebuilder's stocks typically get cut in half in the first down year, no matter how strong their financial situation might be.