Lets return to reality

Discussion in 'Trading' started by MrDODGE, Apr 19, 2008.

  1. Writedowns are not over and banks may lose their high credit ratings. This news IS NOT priced into the market!


    We have still not seen the top of sub prime resets. The largest amount of loan rates will adjust in the coming couple months. It takes 90+ days for the full foreclosure process to occur after that point.


    Here is one part of SoCal showing the extreme amount of people in trouble:


    Red is bank owned, blue is scheduled for auction, and green is in some stage of preforeclosure. Notice how most of the homes are still in some stage of preforeclosure. Supply of homes is guaranteed to increase in the coming months.

    History shows once unemployment starts to increase it will shoot up several percentage points. Here is a graph of the rates from the St Louis Fed.

  2. XLF had one false break lower, but if symmetrical triangle pattern (continuation of trend) plays out, we should be at the top now.........either way, we should know shortly.



  3. Mr. Dodge,

    There is no point harboring bad news ad infinitum, focus on life's better things and look towards a better future. Real estate and housing is just 3% of GDP and it cannot kill our economy entirely. Besides there are lots of sound policies and rate cuts in place. HUD has raised loan limits to 729,000 in Southern California its lot easier to refinance through FHA than before. Things are getting better not worse. Stock market keeps moving up not down and money is being made and not lost.
  4. dman666


    Now how do you know whether or not it is priced into the market? If you think you know, then you should think you know what the prices of financial stocks should be. I wish I could predict what the market does and does not know! But seriously, I have no idea whether or not the stocks go up or down. I'm not long any of them due to the fact that it's just not my style to buy stocks near their 52 week low.