Friday, September 21, 2007


Fly Buy: EJ

I bought 1,000 EJ @ $22.18.

Disclaimer: If you buy EJ because of this post, China will sell all of its dollars. And, you may lose money.


More China. Is XMFL another FMCN in the making? Or is there no robster in the chow mein?

Odd, no?

Greenspan kill housing - Reuters

I bought some Mr.Softy for no particular reason.

Ya'll have a good weekend.

And by the way the Mets suck!
nice pick, I knew I should have bought some when you first highlighted it.

I thought they disbanded that after Herschel Walker skipped to the Crackboys?
I wish someone would explain to me the appeal of "SRS?"

Seems to be, until we see otherwise, we are in a bull, yes?

And even if we are not in a bull (we're not in a bear), we just cut interest rates precipitously, which might indicate a weakening of the currency, if nothing else.

Why would you then play russian roulette with a hard asset short?

Did I miss something at the Maxim meeting?

-->regression to the mean big boy
Real estate isn't a hard asset right now. It is leveraged debt.

It is screwed, and the Fed can't fix it. It can't inflate with other hard assets right now, because there is too much must-sell inventory. It pre-inflated, and then some. Now it has to deflate.

Current holders took out loans they couldn't afford, hoping for a quick flip. They can't hold. New buyers won't pay current prices, because the cost of holding is too far above market rental value. Rents aren't inflating, because wages aren't.
SRS is not just homey real estate.

Wrong wrong wrong wrong.

Component companies include those that invest directly or indirectly through development, management or ownership of shopping malls, apartment buildings and housing developments; and real estate investment trusts ("REITs") that invest in apartments, office and retail properties. REITs are passive investment vehicles that invest primarily in income-producing real estate or real estate related loans or interests. It is not possible to invest directly in an index.

Leverage just got cheaper!
I'm aware of that.

The positive economic multipliers of homebuilding and home resales work in reverse on the way down.

Commercial real estate investment tends to follow residential RE investment with a lag of a year or so.

CRE lending has been squeezed lately. The Fed's action reduces the cost of borrowing, but, as you know, the recent problems were due to willingness to lend rather than the cost of the money.
Well, it was a combo, if you are talking about the asset bubble.

But the question is, can the bubble be deflated or popped? With additional liquidity, it's got room to move down slowly, instead of bursting. Additional pressure on the dollar also supports through hard asset valuation.
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