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

To: patron_anejo_por_favor who wrote (147405)	9/17/2008 3:12:33 PM
From: Perspective	Read Replies (1) \| Respond to of 306849

Market has limited bandwidth to deal with the fallout of all this. One subsector at a time. This week the flavor is investment banking. Maybe next week CRE. Then some other week they'll figure out retail. And the regional banks may get a pass until the FDIC quits screwing around and gets down to business. I forget - is this a consumer-driven recession, or a finance-driven recession? The banks lent too much money against a real estate bubble, and Wall Street drank their own Koolaid, so it's financial - but now the consumer can't repay the loans, so - ah, nevermind... `BC

To: patron_anejo_por_favor who wrote (147405)	10/26/2008 6:18:59 PM
From: Perspective	Respond to of 306849

JWN - Boy, was that a lucky timing post! In case you're wondering, I'm scrambling around trying to figure out which stocks are ready to be covered given all the beating. The answer is that I'm finding surprisingly few that are at valuation floors. That's why I remain pretty stubborn on the notion that the indices need to retest the 2002 lows. They're so close now; usually that acts as a magnet. You get a buyers' strike until price hits that threshold. Regarding JWN, I just noticed that they levered up back in 2007, borrowing $1B to blow on share repurchases: finance.yahoo.com That cuts their book value to $1B - around $5/share. That kind of foolishness by the management also removes prior valuation floors when you look at long-term charts. That $6-7 base on this chart: That, my friends, was book value. Was. You can cut that floor in half after the balance sheet degradation. Probably due a bounce, but if anything I'll be adding to shorts. `BC