SRS commerial Real Estate

Discussion in 'Trading' started by gdtrader, Dec 12, 2009.

  1. I would think this ETF would be ripping but for some reason commercial real estate seems to be doing fine no matter what they keep talking about all these defaults?
  2. Dear gdtrader;

    In the good-ol’ days of Free Market Capitalism I think your SRS would be through the roof!

    Now-a-days’ however, the banks mark these defaulted properties in their books as Assets, Valued at the Price of the Defaulted Loan (i.e. “We loaned the guy 4 million to buy it, so it must be worth 4 million Plus 10% Annually today! Current market conditions be damned).

    With today’s “Mark to Imagination” style of accounting (the “less bad” New Math) the banks can let these Assets sit on their books indefinitely. After all, Real Estate has always appreciated, right?

    Doubtful about the accounting “Rules” change making the difference? Just look at ANY 1 year chart. Better yet, look at SRS. Or, for an exaggerated version FAZ. The new accounting rules took effect April 2, 2009. You and I had been hearing about it for a couple of weeks by then, Remember? I don’t know about you, but I try to stay as current as I can. I also think that the BIG PLAYERS do the same. In Fact, I’d be willing to bet that the BIG PLAYERS are shall I say, about a week or 2 ahead of me. Now look at your SRS Chart and count backward 3 weeks from April 2 (That would be around March 9th).

    Oh-Yes, I will have the standard Obamanomic Fans pointing out that the Manchild’s massive print and spend our way out programs and promises are what brought the Market back from its coma-ridden deathbed to it’s current status, and, they will be absolutely correct. Without the billions of free money being borrowed by the banks they would be forced to take their losses and sell these assets at a value determined by Blue Collar DEMAND (or in commercial terms White Collar Demand). And let’s not forget how valueable these troubled assets are when they take those grusome Stress Tests.

    But isn’t this what the masses voted for? Didn’t Obama E. Newman promise to maintain real estate values? I think you’re seeing exactly what they voted for. Is it sustainable? Will real estate recover faster than we can print? Will your Grandchildren’s Children think we made a good investment by keeping prices artificially high? Can we really Tax our way out?

    I think SRS will see its Day of Reckoning. It’s the When that is my dilemma. I thought it would take about a week for the masses to come to their senses after Mark to Imagination started, even took a BIG hit in SKF to prove it. At today’s prices though, SRS @ $8.11?

    Best Wishes;