Mortgage market in collapse

Discussion in 'Economics' started by silk, Mar 5, 2007.

  1.  
    #21     Mar 11, 2007
  2. Scriabinop23,

    Well, I don't have that mentality anymore. It was the first weekend after 2/27, to me that's pretty risky. Uncle was going to average down, I guess it has to make some sense in his time frame (years?), LOL

    Discount between A Shares and H Shares, don't work like what people do with gold between New York and Chicago in the 1970s. The discount in H shares are long term (for now). One day when people can freely buy RMB and invest directly in china, then I think US or European institutions will be all over it.
     
    #22     Mar 11, 2007
  3. hahahaha...

    I should keep my ass shut. Well, I am young, and I care about those people (friends and family).

    It just pains me so much that they don't see the downside risk. What do you do in such situation, Kiwi?
     
    #23     Mar 11, 2007
  4. silk --the question I have for you is which co's are you looking to short?
     
    #24     Mar 11, 2007
  5. Forget it. You can't help. I've told people for years. First time they get stopped out, they get pissed... at you.

    Retail people just don't understand, because they are only interested in good times. They'll get shaken out, and come back near the top of the next cycle. It always works that way, because it is the one variable that never changes, basic human emotion.

    There was a Darvas book he wrote in 1974. wasn't very good, but he interviewed people asking why they held such losers. They exhibited a mentality you may wish to note. "People buy logically, then defend the decision emotionally."
     
    #25     Mar 12, 2007
  6. That's so true.

    Maybe Kiwi is right, forget about other people and put my money where my month is..

    Friends and Family is the hardest, I kept hearing people chatting about stocks in my favourite diner, I can always laught it off.

    Sometimes there is a little voice in my head, just think about those retirees who gonna lost a shit load of money after the next bust..

    Maybe I think too much,
     
    #26     Mar 12, 2007
  7. Stop losses eh?

    I am investing in SVSPX. What should my stop loss be on it?

    By the way, its in my 401k, does that matter?

    Stop losses are not for every situation dude.

    Also, here is some food for thought:

    Unless you are a stock picking god, it is highly unlikely you will pick the exact bottom of any stock drop or even come within 10% of it.

    Case in point for me: First purchased ACF over $3/share, continued to buy all the way down to its low of $1.55. ACF is now well over $20. If I had a stop loss when I bought at $3, I'd have sold for a loss and never found the gold waiting for me.

    Same goes for AMR, and TSO, and GM etc. etc. etc. I have never made my initial purchase at the absolute rock bottom or even close to it. Nevertheless, I have made a great deal of money on stocks hammered down in price.

    I am looking forward to buying more and more shares of NEW, NFI, IMH, CFC, DRL, etc. etc. as they drop in the coming months.

    2 years from now, I will remind you of this. Mark this post for future chats!
     
    #27     Mar 12, 2007
  8. NEW, NFI pretty much bk guarantees, cfc might make if they didn't go to crazy since they do have a banking side....only time will tell
     
    #28     Mar 12, 2007
  9. Traderich,

    My trading is my primary source of income, my family is my safety net. I worked for 3 years before I had my trading stake and had purhcase HK and Chinese banking stocks between March 2004 until March 2006. That WAS purely saving, no homework no shit, all in a bull market. Lucky, huh?

    Now, to me, "My" trading is about calculated risk. Didn't mean to offend anyone who picks bottom, cause I am not doing this, and I don't understand it.

    2 years from now is pretty much the last of my consideration in terms of index futures, all I concern is "Is there a trend?" and "how well my system is measuring it?". If my system is correct, I should have short most of the shoulders on the way down "IF" the trend is truely downward. I will see you two years from now, and you will tell me how well your stocks are doing.
     
    #29     Mar 12, 2007
  10. here's a sector affected I hadn't thought of. These tremors will be felt all through the economy......... Google????



    LOAN RANGERS
    By HOLLY M. SANDERS


    March 12, 2007 -- The mayhem in the mortgage market could spell trouble for the Internet ad space, where players big and small have profited from the once booming business.
    As more customers shop online for home loans, direct lenders, conventional banks and lead suppliers - such as LendingTree.com and LowerMyBills.com - need to sharpen their Web campaigns.

    A combination of factors, however - including a meltdown in the subprime market, heightened competition and changes in Internet search advertising - could force them to alter course or pull back.

    "I expect marketing is going to be impacted," said Jeff Lanctot, vice president and general manager of Avenue A/Razorfish, the biggest buyer of Web ads.

    The timing couldn't be worse for the subprime market, where delinquencies and defaults are rising the fastest.

    While most mortgage lenders have embraced the Internet, subprime lenders depend on it even more to reach customers with poor or bad credit histories.

    "Subprime lenders source more loans through the Internet than prime-quality advertisers," said Craig Focardi, research director for consumer lending at financial services adviser TowerGroup.

    Already three subprime lenders - ResMae, Ownit Mortgage and Mortgage Lenders Network USA -have filed for bankruptcy. Two others, New Century and Novastar, are in deep trouble.

    "The subprime problems in the lending industry will get worse before they get better," Focardi said .

    Financial services, which includes mortgage lending, is the second-biggest category of Internet advertising, according to the Interactive Advertising Bureau.

    Ad revenue for the category totaled $650 million in the second quarter of 2006, up 13 percent from the same period in 2005.

    All the mortgage companies contacted for this story said they planned to hold their ad budgets steady, despite the nationwide housing slowdown.

    "In a down market, LendingTree has and continues to grow market share and this is partly due to strategic marketing relationships," a spokeswoman said in a statement.

    LendingTree and LowerMyBills, which rank among the Internet's largest advertisers, are called lead generators because they take loan applications from customers and sell them to actual lenders.

    A lot of their success is attributed to blanketing the Web with low-cost ads that lure users to click on them.

    Even the most casual Web surfer has seen the strange, undulating ads for LowerMyBills, featuring dancing cowboys, a rooftop tango and tattooed arms.

    The booming mortgage business of the last few years has spawned thousands of smaller lead generators, which can collect upwards of $50 for each lead they supply.

    Because of their limited ad budgets, these companies rely heavily on search engine ads through Google and Yahoo! Each time a Google user types in "home refinance," for instance, they will see links to a number of sites touting loan deals.

    Although the turmoil is reducing the number of players, the competition for customers is still so intense that smaller lenders, including many subprime, and lead suppliers are getting squeezed.

    Already mortgage-related search terms are among the most expensive, search experts said. Google estimates the top-ranked advertiser will pay between $28 and $38 each time a customer clicks on an ad linked to "mortgage loan."

    At the same time, the major search engines have also made it more costly and competitive for mortgage companies and lead suppliers to lure customers through the Web.

    Yahoo! recently followed in Google's footsteps by ranking advertisers based on the relevance of their Web site as well as bid price.

    Search experts said the new system tends to favor more established rivals - which have bigger budgets and more traffic to start with - over smaller outfits.

    "We're not seeing any slowdown with dollars, but it is becoming more expensive to acquire a lead," said Peter Hershberg, managing partner at Reprise Media, an interactive ad agency.

    holly.sanders@nypost.com




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    #30     Mar 12, 2007