Tilted Forum Project Discussion Community - View Single Post - 1992 Redux: Will "it's the economy, stupid", Be The Big Campaign Issue?

aceventura3 · 07-26-2007, 08:19 AM

Good to see your continued interest in the subject, especially during a week of sell-offs in the equities market after a long and major run up.

There is some good news in the housing sector, but most economists are dismissing the good news. For example median prices of existing homes sales were up last month compared to the previous month and compared to last year. They say it could be because of a skewed mix of sales of higher valued homes. Inventories of existing homes are also down. They say this is offset by lower sales and people delaying putting their homes on the market. I think we are getting to the point of capitulation. The psychology of the market suggests that when there is nothing but bad news being reported, the worst has past.

As a side note - Normally I would think you would be suspect of information coming from corporate America. If I were CEO of a company like Countrywide, what do you think I would do, given current market conditions?

Here is what I would do. I would write-off and adjust as much as I could using the housing crisis as my reason (not violating the law, just being more aggressive in managing my balance sheet), so that a few years down the road I get my financial statements to look a bit better than they would have normally. I take my "hits" today, for a bigger payoff tomorrow. Perhaps now is the time to start dollar cost averaging back into homebuilder stocks. What do you think? Still believe there is room for shorting?

07-26-2007, 08:19 AM	#87 (permalink)
aceventura3 Junkie Location: Ventura County	Good to see your continued interest in the subject, especially during a week of sell-offs in the equities market after a long and major run up. There is some good news in the housing sector, but most economists are dismissing the good news. For example median prices of existing homes sales were up last month compared to the previous month and compared to last year. They say it could be because of a skewed mix of sales of higher valued homes. Inventories of existing homes are also down. They say this is offset by lower sales and people delaying putting their homes on the market. I think we are getting to the point of capitulation. The psychology of the market suggests that when there is nothing but bad news being reported, the worst has past. As a side note - Normally I would think you would be suspect of information coming from corporate America. If I were CEO of a company like Countrywide, what do you think I would do, given current market conditions? Here is what I would do. I would write-off and adjust as much as I could using the housing crisis as my reason (not violating the law, just being more aggressive in managing my balance sheet), so that a few years down the road I get my financial statements to look a bit better than they would have normally. I take my "hits" today, for a bigger payoff tomorrow. Perhaps now is the time to start dollar cost averaging back into homebuilder stocks. What do you think? Still believe there is room for shorting? __________________ "Democracy is two wolves and a sheep voting on lunch." "It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion." "If you live among wolves you have to act like one." "A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."