Re: Do we BUY SELL or HOLD this stock ????
cibalo...@googlemail.com
Valors
...@gmail.com wrote:
> cibalo .... <para>
> investment grade stuff by repackaging and making more money...
> everyone was leveraged to their balls and borrowing money was almost
> free because no one was defaulting while rates were ridiculously low
> and risk was priced out of the market... do you know anything of
> business cycles?
WTF?!? Are You just attempting to flame people or what? my post wasn't
counter to anything you were saying, but just making an observation
about the market. However, if you insist..
First, i hate to warrant a lecture from anyone who can use the phrase
"leveraged to their balls" and still think they know what "business
cycles" means...
that's funny that you think the risk was priced out of the market...
to the tune of over $6.5 trillion dollars in growth in the Subprime
lending sectors alone from 2003-2006. Risk WAS the market - resulting
in drastically higher rates when compared to equivalent Conforming
MBS's. Higher yield spreads, negligible swap rates and higher bids on
servicing contracts kept the housing & financials market growing for
over 2 years AFTER the fed rates hit their historic low @ 1. it's not
that money was free, it was that people who had it started giving it
away like it was. They just charged a premium on the risk, and
everyone on Wall Street wanted a piece of that premium and kept on
paying more and more for that share.
Obviously it's not flawless, there will always be some donkeys who
will short a stock on margin a week after the dc bounce then
scrambling to cover and even pushing the value.... which is similar to
Mortgage companies gambling on too much risk with other people's money
and having to sell off to Hedges at a fraction of book and asset.
We need those reactive traders in the marketplace though, it's their
covers that make money for the rest of us. i like to ride my business
cycle on the right side of the road.
The new pet rock is Alt- A. born entirely of the Risk-based pricing
models of subprime, but evolved to service a higher-credit profile
market. Still the same crappy paper, still the same clown investors
and buyers. Soon to be the same collapse. Watch and see if CFC
declares a profit or a loss for Q3 after their Alt A default rates
really come into the light. BUT as soon as that news comes out watch
for a nosedive followed by another nice rally.
5k up on LEND again in 2 days, and i may just grab some more.
> Looks like the market is going to collapse unless the government steps
> in. Just because you don't want it to happen doesn't mean that it's
> not reality. etc...
i don't know what this means, unless you agree with me and the Fed
should cut the key rate from 5.25 to at least 5.0. They really should
have done that in March, and maybe even again in June. The housing
defaults are totally attributable to the rising costs of funds and the
subsequent liquidity losses are a direct result of downgraded bonds
based on increasing DEFAULT rates, not inherently bad security
packages.
Stopping the rate hikes was a start but in the last 18 months the Fed
has just sat back and watched things go from bad to ugly.
Macroeconomics 201- i think they covered business cycling...
That's what I was saying the reality is, I think some guy named Jim
Cramer thinks so also, oh and some Greenspan dude too...
oh and yes i do own lots and lots of financials and some subprime. I
also dump them all the time. I trade stocks for profit, what do you
do?
if you're buying - HOLD until 9.5
