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

To: GraceZ who wrote (226021)	10/24/2009 12:25:06 PM
From: ChanceIs	Read Replies (2) \| Respond to of 306849

>>>Clearly the Fed has picked winners and Citi is on the list.<<< Your points about getting on the shorts too late is well taken. I do think that Citi might be toast. All of the big banks are making it off of trading and/or borrowing for free from the government and lending somewhere else. Their returns from normal banking are nil or negative. The free money from the government will stop at some time. The proper solution two years ago was to break them up, wipe the stockholders, haircut the bondholders, and restructure. It still is the proper solution. Will we do it??? I would be a fool to answer. I do have some bank shorts, based upon technicals. I don't have any RKH short right now but am looking for a window to enter. I wouldn't touch Citi here because it is a total unknown. WFC on the other hand has had a good upwards run while investors ignore fundamentals. It is a reasonable short. See my linked Chris Whalen article.

To: GraceZ who wrote (226021)	10/24/2009 1:37:48 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 306849

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To: GraceZ who wrote (226021)	10/24/2009 3:32:24 PM
From: rich evans	Respond to of 306849

BTW I was referring to banks not GSEs. Clearly Freddie and Fannie equity holders are going to get wiped out (that would be all of us via the Federal government). Why should they get wiped out? The US owns about 50% of each. Their debt is now explicity guaranteed by US. Their net interest margins before loan loss provisions has a good spread because of this cheap borrowing. The 6 trillion in assests owned or guaranteed has a net loss of about 10% after recovery and sale of the real estate thru forclosure. The 600 bill in losses will be gradual and offset by about 60 bill in income for net interest and guarantee fees for the two entities. So wait like Japan for 10 years and you will have earned your losses. Rich