We've all been talking about this chart for over a year now. I guess the question is, are the banks capitalized well enough to manage this issue if it were to play out as the chart implies? A year and a half from now isn't really that long. Maybe the time to get long financials is really the end of next year.
That last "bubble" obviously reads... "And what happens here?"...To lazy to fix it.
ReplyDeleteForeclosures are running way behind vs when things go into arrears. It says to me that things should appear to be getting to worst possible by end of 2011, and as soon as that pig goes thru the python, a bottom should result.
ReplyDeletePrediction 2011
ReplyDeletehttp://www.youtube.com/watch?v=PNc278W45ck&feature=related
http://www.youtube.com/watch?v=wJ8ULNQWnUE&feature=related
ReplyDeletehttp://www.youtube.com/watch?v=_4BdbrhKdus&feature=related
ReplyDeleteI have a friend who is a real estate broker in LA area. He was telling me that since mark to market rule has been abandoned, the banks are not in a hurry to offload their foreclosed properties. Any foreclouse sale hits the books and they hope to spread out those losses. Also waiting can lead to better times in real estate market (may be people will be more likely to buy inflated homes with inflated $$$).
ReplyDeleteGreat trading comes down to the following 3 things:
ReplyDeleteEmotional detachment
Discipline
Focus on the process (not the outcome)
t3d
Re: The Futility of Forecasting v The Ease of Fading Crowds newSubmitted by 2nd_ave (5093 comments) on Sun, 12/26/2010 - 01:14 #76560 (in reply to #76558)
ReplyDelete'This statement, I think, runs counter to the first one.'
No, not really. The paragraph you're referring to was actually the first statement, and I think the second statement follows logically from the first.
If we could in fact predict the future, and additionally could predict the effect of any future event on stock prices, then the effect of that future event would in fact immediately be priced in. However, we know neither.
On top of that, stock prices have little to do with actual 'events.' What we're trying to predict is the effect of human emotions on stock prices. That may sound difficult, but it's actually easier than trying to predict future events. Human nature does not change. So the set-ups that Vad plays recur time and time again. And the AZ/DZ cycles that Bill uses for entries/exits recur time and time again. There are no guarantees, of course. Which is why I say we play the odds. But we try to play with the odds stacked in our favor.
TCK newSubmitted by 2nd_ave (5094 comments) on Sun, 12/26/2010 - 01:34 #76561
ReplyDeleteThis stock is a great example of why investors and traders love to 'play the markets.'
In March '09 it traded under 3/share.
In the past 4 quarters, net income alone was 3.19/share- and of course, it now trades at 58/share.
We had 20% of our 8-year-old's custodial account in TCK back in March '09, and sold it all a few weeks later.
RE: Mortgage chart
ReplyDeleteMark, don't forget that this is the chart of mortgage interest RESETS, and in the normal times of 2007 foreclosures happened only 6-9 months after the mortgages were reset (and sometime AFTER such resets the owners stopped paying mortgage and became delinquent). In the current crazy times, however, foreclosures sometimes are postponed for more than a year after the owners become delinquent on the mortgages, and then banks take over the foreclosed properties and wait even longer before selling them at the auction. So all the delinquent homes won't clear the system until the end of 2012 and possibly even longer. That's why I have been saying for a while that the time to shop for houses will be in 2012...
Igor,
ReplyDeleteIMO, the depression doesn't end till the banks have unloaded them all and both the banks and people are back to being both solvent and willing/able to borrow and invest into things that are good long term investments, be they homes, businesses, plant/equip, etc
Dan Fuss has always been a straight shooter to me. This is one of the best interview's I have ever heard him give. I intend to parse the transcript's when it becomes available. Well worth your time.
ReplyDeletehttp://www.investmentpostcards.com/2010/12/26/wealthtrack-dan-fuss-on-bonds/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+wordpress/VYxj+(Investment+Postcards+from+Cape+Town)
t3d
Four stages of life:
ReplyDelete1) You believe in Santa Claus
2) You don't believe in Santa Claus
3) You are Santa Claus
4) You look like Santa Claus
Getting long financials - I wouldn't wait until the last minute, b/c you'll probably miss the opportunity, and I wouldn't be too concerned with buying new lows, as long as they were leveled off as if a bottom was forming.
ReplyDeleteMan, this has been a rough weekend. First, I somehow manage to crack a tooth that exposes the nerve. OK, I can deal with that. I'm a tough dude, right? Then last night I finally get the flu the rest of the family has been battling for 3 weeks.
ReplyDeleteDamn....That's a tough deal.
new post
ReplyDelete