April: The start of the ARM Tsunami

[kev374]

An interesting watch about the coming ARM Tsunami…

Video link

[Anonymous]

Informative; thanks for the link.

Along those lines, from http://www.financialarmageddon.com/:

“…Prime refinancing volume peaked in 2004, and the most popular loan product at that time was a 3/1 adjustable-rate mortgage, three years fixed and adjustable every year after that. Those are resetting this year after 17 quarter-point increases in the fed-funds rate. The subprime home-equity market peaked in 2005, and the most popular product from that year was a two-year-fixed, 28-year-floating mortgage. It resets this year, and now credit spreads are widening…”

There’s still time for folks to join me in shorting the market. Don’t miss out on this once in a lifetime opportunity!

[an]

Great site. *bookmarked*. I can’t stop watching :-).

[Cow_tipping]

JG: What do you use to trade. ETrade or ameritrade or any other. I will ahve to cos I already own a house and I am deluding myself that I will not go under since I ahve paid off like 30% of the original purchase price which was very very low IMHO. But if I do … I am trying to hedge my bets.
Cool.
Cow_tipping.

[Happy renter]

Hi jg,
I am interested in shorting the market also, but I may only invest a portion of my money. My main goal is to speed up the “housing bubble” to pop faster and harder before the Gov’t bailing out. Bailing out will damage our economy more. So, I may be shorting real estate only!

The flippers inflated the housing market and it’s time for us to fight back. But we do it Legally with Real cash.

Thank you!

[(former)FormerSanDiegan]

I am interested in shorting the market also, but I may only invest a portion of my money. My main goal is to speed up the “housing bubble” to pop faster and harder before the Gov’t bailing out. Bailing out will damage our economy more. So, I may be shorting real estate only!

The flippers inflated the housing market and it’s time for us to fight back. But we do it Legally with Real cash.

Happy renter – How will people shorting the real estate market hasten its decline ?

[Anonymous]

Cow Tipping, I have all of my money at Vanguard, and use their brokerage service to execute my trades.

I used E-Trade before, and was very happy with them, too.

I think it’s a great idea, CT, to hedge your housing bet; if I was a homeowner, I’d seriously look at putting a sizeable chunk in gold/gold mining stock mutual funds (but only after the upcoming correction occurs).

[Anonymous]

Sounds prudent, Hr, to only put some, not all, of your money in a downside bet. You’ll be happy that you did.

Man, those were ugly new home sales numbers today. Lots of great analysis/commentary on such at Roubini and Calculated Risk, amongst others.

It’s going to be an ugly year.

[Happy renter]

FormerSanDiegan,

For example, if most investers buy long to one stock, it will go up right? If most investers sell short to one stock, what happen to that stock? It will go down.

If the real estate stocks crash, what do you think about the real estate market? It’s the psychology and they are all related!

Do you know why the subprime crashes so hard? Some hedge funds shorted them since end of last year already, so it crashed harder. The hedge funds made a lot of profits from the crash. I read that article, but I could not find it now.

Here is another related article (Subprime Collapse Helps Short Sellers):
http://www.nysun.com/article/50975

I have a BA degree in Finance, and started to invest for long time. I never short since I am happy with my return. Plus I did not have time to monitor the market! Before I invest a stock, I look at all the data, realted news and finanical statement.

I never lost money in long term because I did not buy during the .com bubble. My friends laughed at me not buying the .com stocks with 100 PE ratio. She eventally lost most of her money. The same thing I insist not buying the house now. She laughed at me again. But that’s OK. Time can tell.

Shorting is very risky if you don’t understand the theory, companies and market. I can’t guarantee and you have to make your own decision!

[no_such_reality]

If most investers sell short to one stock, what happen to that stock? It will go down.

Actually no. In the absence of serious negative news, short sellers, even massive ones, merely depress the upward motion. Unless the stock is fundamentally weak and produces disappointments with earnings, the short sellers by over selling set themselves up for a massive squeeze and explosive upside volatility.

Think 2003/2004 housing prices. When the shorts need to stop shorting, there’s inadequate volume to meet the demand in the market place.

[lendingbubblecontinues]

Maybe we should call it a “tsunARMi”.

Too bad for all the FBs out there, it appears that all “emergency evacuation routes” are becoming grid-locked rather quickly;-)

Cowabunga!!!!

[Happy renter]

no_such_reality,

1. In the absence of serious negative news? (There are a lot of negative news to the real estate already. And it will be more & more.)

Negative news:
http://biz.yahoo.com/ap/070326/economy.html?.v=8

2. Unless the stock is fundamentally weak and produces disappointments with earnings. (Stock price does not only base one the past earngins, investers look at potential future earnings more.)

FYI:
Shares of home builders were lower in late-morning trading, with KB Home (KBH, news, msgs) down 2.6% at $45.23 and Lennar (LEN, news, msgs) down 2.5% at $44.45.

[Happy renter]

Yes jg, I am prudent. I’m sure the bal. of your portfolio is up at least a few % today right?

I don’t know which funds do you have. I would avoid fund has restriction for holding period and redemption fee for shorting position.

Good Luck!

[Anonymous]

I am 90% short the housing related stocks. Screw diversity. This market is going down, you can either get on for the ride or miss out.

[Anonymous]

I’m with dz. Put those eggs in one basket — shorting — ’cause the market is going down.

But, I refuse to use the word, ‘diversity.’ As Michael Savage says, ‘Diversity is perversity.’ ‘Variety,’ ‘range,’ etc. are the terms that I use; never ‘diversity.’

[Author]

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