The Boat Is Going To Sink, Jump Out Quick

Discussion in 'Trading' started by MrDODGE, Mar 24, 2009.

  1. Look at these asset mark downs and then tell me the crisis is over.

    <img src="" />

    Thanks to Zero Hedge for the chart.

    Posted by Tyler Durden at 1:27 PM
    The Treasury's arbitrary transaction price of 84 for the "pool of residential mortgages" seems to not have been all that arbitrary after all. In fact, as it may turn out, it was gloriously optimistic. A report by Goldman today on the PPIP caught my eye, with one chart in particular, indicating that bank are still marking the bulk of their "assets" at 90-95! Of particular note is Citi's delirious optimism on marks in its assorted asset classes, especially commercial mortgages.

    A PPIP transaction at 70 is one thing, one at 95 is very much different, especially when the FMV is in the 30-40s, as the potential equity upside is very limited, while the downside is... well... much less so. Have not had much time to dig into this but present it for consideration and commentary. If banks have expectations for bid levels north of 90 on the bulk of TALF-mediated transactions, this could really end up being a lot of hot air, despite PIMROCK's enthusiastic endorsement of the proposal.
  2. Ehhh... The median house price is rising in California. Maybe the real asset bottom is in at least. Probably the buyers are looking to hedge against inflation down the road...
  3. AAA30


    Do you have a link on the median price rising I only saw that the sales rate was which is still good news.
  4. piezoe


    It's hard to know exactly what the carrying values should be if you don't have direct knowledge of the assets being valued, but the values in your chart don't seem at all out of line to me except perhaps for those above 96%; they seem unrealistically high. The others appear reasonable based on current default rates.
  5. No.
    Sam Zell sold out two years ago from the commercial market. I made a nice piece of money on that deal, and I remember wondering what the folks on the other side of that were smoking.
    I see from the chart a whole bunch of folks thinking they can value those at 100%. They are, to put it mildly, nuts.
  6. I see a lot of 90% to 100% in those numbers.

    Good luck. Let the suckers jump in this rally...

    don't worry OBAMA will save you if you loose money on the next 9 Waves down... to hit 5000 on the INDU
  7. I agree. The fundamentals are horrible and printing a trillion dollars of funny money to pay the bills and re-ignite inflation is only going to cause the world to lose faith in the US dollar and in our treasuries. When that happens, we are toast. Our political leaders think that spending more money and creating more debt is the solution to every problem. But they can't spend their way out of this mess.

    This is nothing but a bear market rally. This is a terrible situation for the people of the world, but it is a tremendous opportunity for profit--both on the way down and on the way up after we have clearly hit bottom.
  8. boo hoo hoo bad news is priced in already. buy all the dips. don't be a loser.

    You can inflate your way to prosperity.
  9. I read it in an LA Newspaper at the donut shop, not sure which paper but I clearly recall they were discussing the overall median home price in California being up 5% and I thought it was year over year. I googled news and only found an article that said that western states had month over month price rises which all things considered is possibly significant even though it's probably more seasonal than anything else..
  10. You might want to take a peak at the weekly and monthly chart of the ES to get a sense of the trend. Although I do admire your eternal optimism. :)
    #10     Mar 24, 2009