Lords of Death Forums Lords of Death Forums LoD General Discussion Thoughts?

Thoughts?

Primed like a lawn mower, just need a terrorist attack to pull the chord into another depression.

Well I dont want to try to pretend to know all about this, but I am in the real estate industry, and I can tell you that the sub prime market has tanked. It needed to as well, for some stupid reason lenders decided that they needed to hand out loans to people who are no where near credit worthy, now all the sudden people are forclosing, imagine that. I know the elimination of the gold standard brought on the buy now pay later era that we live in now. I think the only way to fix this is to elect somone like Ron Paul who will actually adress these problems because the bankers aren't in his pockets. I dont know for sure but I think Wilson was the person that sold America out by creating the federal reserve. Anyhow I'll leave this debate to more capable minds, but that is just my humble opionion.

Arioch, we are looking like geniuses right now arnt we....
also, just want to clarify one of your graphs.
The 91-Day TBill Yield graph is skewed temporarily right now due to the deterioration of credit. Money market managers right now are avoiding all credit regardless of quality. Any piece of commercial paper that is not rated AAA or AA is having a difficult time being traded in the market. Money market managers are buying TBills right now as bonds roll off for the safety. They know they are getting a lower yield, but they dont want to break the buck in the portfolios. Monday the 20th (?) saw the largest rally of TBills over the past 19 years (since it has been tracked). That yield will creep back up once confidence and normalcy returns to the market.
All the other graphs are exactly like what we predicted.....LoD Asset Management has a nice ring to it

The scariest graph is this one

That huge lump of option arms are the reverse ARMs and I/O ARMs that were issued to the highest risk and jumbo loan applicants...
If i were a betting man, there will be a significantly higher number of defaults in this sector than any other.

I fool people IRL into thinking I'm smart because I repeat what Khell and Arioch say on the interweb!
Question is this for you "experts"...
Do I burn the house down now and cash in on the insurance or burn it down later when I have all of my enemies and past bosses over for tea. Then collect the insurance? I've got a match book right here, just give me the go!!

Yep, I agree. And then we lump in MEW drying up (the fuel for the economy for the last 3 years), real CPI (not published) climbing nicely due to such things as "Dethanol", wheat harvest 40% below trend, past peak oil, and I see a very nice consumer led recession hitting us in a manner which cannot be denied in 4th Qtr 07. 1970's all over again.
I see plays in Puts on retailers (or shorts right before Thanksgiving, to allow the uptick for a day). I see Puts on builders, banks (Wamu for easy pick), home improvement. IndyMac = easy pick for a Put (anyone can see that one). Pulte & Toll for easy Puts ( no Jumbos = them dead). KB, Richmond American, Horton getting close to a buy (bottom feeders, another 6 months before a buy). There are so many plays right now it is sick. (buys) Futures = shit you eat ( South America, big plays down there for buys, they feed 30% of China) etc...
CC delinquencies are going thru the roof (lender of last resort), that says Mr. Consumer is done & baked. Cash would be king if there wasn't so much of it. It is tough to try to guess which way it will run now but my call is:
By end of 4th Qtr 07.....consumer led recession (easy picks on puts)
08 through 10, stagflation (picks to buy in Tech and meat & potato)
11+ Unknown, the fed choses between high interest rates (Volker moment) or high inflation (game over).
$17.5B shortened credit last week + $18B foriegn T bills recycled out = Hmmmm.......
China is about to float Yaun, I bet by 09 or 10 Yuan is floating and the USD is finished (N. American Lire). Everyone chanting "We're #1" needs to start practicing We're #2 (or 3, 4, 5....).
We're checkmated, it is only now a matter of seeing how far we could spread the toxic loans outside of the borders (share the pain).

You guys are way over my head on some of that. I should try harder to follow the market.
There is money to be made on foreclosures for the rental market. Even for you guys that do not have money to put down, do a for sale by owner on contract, when the title is transferred into your name refinance give the seller his/her money and put it on the rental market. Instant equity just make sure the building pays for itself. No doubt the rental market is on the up. Then sell when the real estate market recovers.

So you think they will lower interest rates again?
I have 2 rental properties with decent equity and i dont know what to do. I do not to have to sell them since im getting my mortgage paid but i also do not want to keep lossing equity. Someone mentioned that it would take 10 years to get back to the 2005 level you guys agree?
I kick myself everyday for not selling last year.

Hang on to the property. If interest rates climb, people will lose their homes but still need a place to live. The rental market will be extremely good, if the interest rate drops then the market goes back to 2005 & 2006. My broker said they tightened up on lending, but if we see interest decline there is money to be made and undoubtedly the lenders will give away loans.
Long term I would hold onto your properties and think about retirement. Otherwise rent and wait for the market to recover and make some fast $$.