San Diego Housing Bubble News and Analysis

If this event is taken by the market for what is - a complete failure by US regulators, and continued plummeting of all things housing - this has to be bad for them.

Bear Sterns went back up a little following the JPM buyout, but this is a takeover.

I'd expect a 20%+ drop. Then again it wouldn't be the weirdest thing if Hanky and Bernanky offered a premium over the current share prices.

I'm also curious what this will do to the international credibility of the US and the dollar, and what H&B will do with all their newly acquired REOs.

Is preferred stock traded on the pink sheets?

I don't know, but like I suspected asian markets are loving it :(.

Nikkei up 400+pts.

Dollar is down against most currencies, euro is above 1.44.

Also, many are predicting more bank failures (regional banks specifically that hold a lot of FNM/FAE)

http://money.cnn.com/2008/09/07/news/com....

I feel bad for all those folks with pensions with significant holdings in fnm/fae.

I guess being a generation X'er I've always been cynical of "guarantees" that a company/institution offers for retirement.

My prediction is OMG, I'm either going to have the best or worst day of my shorting career. I have quite a few XLF puts.

In a logical world spreads on treasuries would blow out and stocks would shit the bed. This is not that world.

Short term I wouldn't even hazard a guess. This is bad for financials, very bad. Bailouts seems like a good idea, but the underlying implication is that the finance industry is not just unstable, but in danger of collapse.

Note to Rich, this IS inflationary. The only question is, will the bond/currency markets react?

I look for the market to turn after the European markets close. That's happened rather frequently of late. I don't know why, but the US markets seem to enjoy wrongfooting the Europeans.

I am just gonna venture a guess, but I think that this will send stocks up, spreads down, and everyone will be all happy that uncle sam really cares. This will go on for about 6-8 weeks, until people realize the full ramifications of what happened, and itll all go south again. That seems kinda the MO for this down turn.

guys, tomorrow I will come back to this post here and edit my guesses.

For sure it's going to be 100% correct....

$1.50 or less for each of them.

Barnaby-Inflationary that could last short to mid term but as Treasuries are now tied to Agencies any real losses in the Agency paper could skyrocket Treasury rates. That's deflationary for the credit markets.

I vote for DWCAP

ditto, the market is so eager for some good news that any measures that the government might be able to stave off further financial disaster in our banking system is viewed with enthusiasm.

LOL!

KIBU, I think these are phony tricks here... learning from the guys at FRE and FNM?? :D

The day will probably be a big "up" day in general, as the greedy wall street cheerleaders who spent the past 6 months pouting/asking for this bailout have now got their way once again.

One thing I guarantee... Jim Cramer will be having a field day/he will be giddy to the point of annoyance, he will most likely declare the bear market is bottoming(as he has done numerous times already), and he will likely revise his ridiculous countdown to the housing bottom to an earlier date.

Long term, I think it only discredits the country's economy, weakens the dollar, and creates more inflation. I don't think it will impact the housing problems a whole lot.

Based on premarket activities, I think your puts might eat take a hit. Financials are rallying today it seems (minus fnm,fae).

How the market is up today is beyond me.

I can only guess it's because people are realizing Hanky and Bernanky (who should be tried for treason IMO) will keep spending our children's future on a couple of bad banks.

Just wait until the FDIC goes broke and Fed sheet turns red. Then what?

I just checked charts of FNM and FRE

Fannie down 89.63% to close at 0.77 today

Freddie down 82.75% to close at 0.88

~

Who was it that said, "Stocks are for suckers?"

Oh yeah, that was me ...