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

To: John Vosilla who wrote (97924)	12/20/2007 1:49:45 PM
From: Archie Meeties	Read Replies (1) \| Respond to of 306849

Another interesting analogy. However, neither homebuilders nor the financials were priced at the astronomical levels of rambus, jdsu, etc. They have also reached basement values much quicker. Financials also have the tailwind of about 4-5 more cuts in the offing, and I was thinking more of regional banks than C, WM, etc. The regional banks have all been slaughtered too, and the amount of insider buying in them suggests some of it may be unwarranted. Some of the regionals have miniscule exposure to subprime/alt-a, and among them you can pick a region that hasn't been hit as hard (pacific nw, for example). I did a pretty careful review of the last housing bust and came to the conclusion that the stocks bottom months before housing nadir. The bottom was reached when the rate of change of housing starts started to slow. We may be there now. The bottom was also signaled by a drop in trading volume and a decrease in volatility...sorta like the market had given up or forgotten about them. So using that criteria, we're definately not ready for a reversal in the homeys. There is another arugment that says that the housing slump will be less protracted than in the past because more homebuilders are publically traded companies and so will pull back on starts much faster than a private company. The counter argument is that foreclosures will be putting more of an inventory overhang on the market. However, the counter argument to that is that a lot of properties that foreclose are going to be less than desireable properties. They will depress the average home price but the demand for better homes will still be there.