The Residential Real Estate Crash Index

To: James Hutton who wrote (146208)	9/14/2008 9:25:33 AM
From: Pogeu Mahone	of 306800

video.google.com long SKF I put on a monster position on friday.... video.google.com ======================= "The real fear in the discussions, this person added, was that the fire-sale prices, or "marks" of Lehman's real estate book could set off a cascade of problems for other Wall Street firms. If those marks were made against other banks' portfolios, it could eventually force those firms to raise more capital, too. For firms' considering funding the bad bank, the calculation has thus become the price of that contribution against the price of a widescale markdown. There could be further effects to such an event, with the banks calling in loans from hedge funds and other clients, in turn setting off more forced selling that further depresses asset and securities prices." So Lehman has to sell its crap, and lots of wealthy people are going to lose a lot of money on highly leveraged, highly risky investments, and the system will purge itself rapidly instead of Japan style. Plus mutual funds will lose money. And foreign governments will be ticked off cause they'll lose some money. Am I missing something?

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To: Think4Yourself who wrote (146214)	9/14/2008 10:07:17 AM
From: bobcor	of 306800

Taxpayers are mostly busy trying to run their own frantic lives: taking kids to school, commuting 2 hrs/day to/from work, trying to keep the boss happy, taking kids to activities, trying to take care of family obligations, trying to get a little exercise, and hoping they don't get sick so it won't all fall apart. Most simply don't have the bandwidth or the desire to deal with the $hit we discuss on this thread. Sometimes I wonder why I bother. Just hoping that my knowledge and invested time are a positive force for me for the next few years. Sure didn't favor me to avoid FNM debt. Ignorance was bliss on that one. As for bankers, I totally agree. One doesn't go into a career in banking for altruistic purposes... `BC

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To: ChanceIs who wrote (124035)	9/14/2008 10:34:04 AM
From: bobcor	of 306800

Speaking of CRE, I was just reviewing a few more banks and tripped across this tidbit on BOFL: biz.yahoo.com Loans Total gross loans, including loans held for sale, totaled $1.2 billion at June 30, 2008, up $47.0 million or 4.1% for the first six months of 2008. Construction loans, largely secured by commercial real estate, totaled $329.9 million (27.7% of total loans) at June 30, 2008, down $67.4 million since the end of last year. Commercial real estate loans, including multi-family dwellings, but excluding those in construction, increased by $83.1 million and also total 44.5% of total loans outstanding, while commercial and industrial loans climbed $19.0 million to approximately 9.4% of total loans outstanding. One-to-four family residential loans, including loans held for sale, were $148.9 million (12.5% of total loans), up $8.6 million from year-end. Consumer lines of credit and installment and other loans increased by $3.7 million (5.9% of total loans). CRE= 44.5% Construction= 27.7% RRE= 12.5% C&I= 9.4% Consumer= 5.9% I can see how their balance sheet might be lagging the rest of the industry given the heavy concentration in CRE. DISCLOSURE: Already short BOFL. `BC

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To: patron_anejo_por_favor who wrote (146221)	9/14/2008 10:40:04 AM
From: neolib	of 306800

The argument for some level of intervention is based on observation of dynamic systems. High gain dynamic systems oscillate when subjected to step changes (they overshoot and undershoot the new target, often multiple times while slowly damping out) if you are lucky. If you are unlucky, they go unstable and peg to one extreme or the other. A well regulated system (one say with critical damping) does not have the oscillatory response, but it does have a slightly slower rise time. It achieves final regulation faster than an unregulated system. This is all very basic stuff. You can over regulate, which can lead to very sluggish response, and final regulation is not achieved for a long time. The goal of regulation is good, not bad. You do have to design such systems with some care however.

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