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

To: Think4Yourself who wrote (146904)	9/16/2008 10:49:51 AM
From: John Vosilla	Read Replies (2) \| Respond to of 306849

Probably all the larger builders will survive and get much stronger this downturn as they buy up land and existing infrastructure from the weak on the cheap that go under. Also costs of construction have now come down dramatically from 6-12 months ago offsetting home price declines. Probably the fact they are all so heavily shorted helps too.. Look at the charts from the 1991-98 period of any builder and they basically went sideways to up the entire time after a Fall 1990 bottom. New home construction was way below trend for that period.. The theme here of short homebuilders because '...housing sucks and credit is tight and the world is going to hell...' has been over IMHO as I have pointed out many times this year.. Nothing more than a trade for years to come..

To: Think4Yourself who wrote (146904)	9/16/2008 10:56:18 AM
From: Perspective	Respond to of 306849

Look at bonds, that's why: Wall Street rugrats know that when rates fall, you buy homies. Has worked since they were born. `BC

To: Think4Yourself who wrote (146904)	9/16/2008 11:02:30 AM
From: butschi2	Respond to of 306849

Perhaps some unwinding of long/short positions from quant funds. HB sometimes trade really weird. Most interesting in the next month should be Citigroup, huge balance sheet a lot of CDS and other derivates, perhaps losses from LEH as trading partner, SPE, CDO and other opaque things. I would expect C going down a start over and reboot for the financial system. sec.gov Wobbling is increasing and if AIG goes down and rumours about UBS come true it will get really ugly. C with credit derivatives with a value of $143 bio and liabilities of $128 bio. notional amounts are around $1.7 trillion. The value of notional amount was nearly the same than at the end of 2007, but the value of the CDS nearly doubled to around 10%. C seams to have here a lot of gains from $83 <-> $84 bio (assets <-> liabilites) to $143 <-> $128 (assets <-> liabilites) could be some factor of trading or not yet realized gains(if ever). Here could come future losses if collateral didnt increase with the value of the CDS. Total derivatives at C are $38 trillion. Not bad for a $2 trillion balance sheet. Sorting out $38 trillion in derivatives with netting aggreements etc would take a lot of time. Leh was small with only $1 trillion in derivatives. AIG is bigger from a CDS standpoint and AIG was mostly insurance (CDS writter) C is mostly a trader with offsetting positions and therefore better protected until to much CDS partners go down.