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  1. #21
    All-Conference Kahns Krazy's Avatar
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    Pork belly timing is horrible. The people who own the pork belly contracts are saying, "Hey, we're losing all our damn money, and Christmas is around the corner, and I ain't gonna have no money to buy my son the G.I. Joe with the kung-fu grip! And my wife ain't gonna f... my wife ain't gonna make love to me if I got no money!" So they're panicking right now, they're screaming "SELL! SELL!"
    "Give a toast to my brother, hug your family, and do everything possible to live the life you dream of. God Bless."
    -Matt McCormick

  2. #22
    Administrator xeus's Avatar
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    Quote Originally Posted by chico View Post
    pork bellies, which are used to make bacon - as in a bacon, lettuce and tomato sandwich.
    Best line in a movie that is full of great ones.

    I am particularly interested in where the housing market is headed this year. Anyone care to prognosticate on that?

  3. #23
    Quote Originally Posted by xeus View Post
    Best line in a movie that is full of great ones.

    I am particularly interested in where the housing market is headed this year. Anyone care to prognosticate on that?
    Just announced today: JP Morgan's mortgage business was down 42% quarter over quarter. Wells Fargo was down 37%. Both had dim outlooks on mortgages for 2014. Wells just laid off 6,200 loan originators. Refi trade is done. New housing will just be OK IMO.

  4. #24
    Keep you eyes on this index. It is the industry standard for housing.

    http://us.spindices.com/index-family...p-case-shiller

    Also. Blackrock and Starwood both have been making hay in the single family rental market. There are actually funds out there that mirror the CDO's of 2007, but are intended to take advantage of the foreclosure market from a few years ago. IB's started buying, fixing and renting single family homes in the most negatively affected housing markets. Now, they are selling REIT shares or investment interests in these funds. Not really enough to have the same impact as CDO's, but every bit as risky. I would stay away from them.

    With interest rates rising over the next 12-24 months, the refi market probably is dead. The housing starts are up, but in a more controlled way and lenders have new federal guidelines that should (I emphasize should) make borrowing more transparent. Caveat: There will always be shysters taking advantage of uninformed idiots, but not universally this time. New housing loans will be there, but jumbos could prove tougher to get.
    Pray the Rosary daily

  5. #25
    Hall of Famer xu82's Avatar
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    My future father in law (many years ago) asked a friend of my parents (who was a founder of a large brokerage house) at a party: "so, is the market going up or is it going down?" The answer provided was the sign of a wise man:"yes".

  6. #26
    Supporting Member X-man's Avatar
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    Quote Originally Posted by chico View Post
    I'm waiting for the crop report to come out. I have a good feeling about frozen, concentrated orange juice futures.

    Or maybe pork bellies, which are used to make bacon - as in a bacon, lettuce and tomato sandwich.
    Ahhhh, Beaks. I wonder what ever happened to that guy.
    Xavier always goes to the NCAA tournament...Projecting anything less than that this season feels like folly--Eamonn Brennan, ESPN (Summer Shootaround, 2012)

  7. #27
    Junior XU-PA's Avatar
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    Quote Originally Posted by vee4xu View Post
    Keep you eyes on this index. It is the industry standard for housing.

    http://us.spindices.com/index-family...p-case-shiller

    Also. Blackrock and Starwood both have been making hay in the single family rental market. There are actually funds out there that mirror the CDO's of 2007, but are intended to take advantage of the foreclosure market from a few years ago. IB's started buying, fixing and renting single family homes in the most negatively affected housing markets. Now, they are selling REIT shares or investment interests in these funds. Not really enough to have the same impact as CDO's, but every bit as risky. I would stay away from them.

    With interest rates rising over the next 12-24 months, the refi market probably is dead. The housing starts are up, but in a more controlled way and lenders have new federal guidelines that should (I emphasize should) make borrowing more transparent. Caveat: There will always be shysters taking advantage of uninformed idiots, but not universally this time. New housing loans will be there, but jumbos could prove tougher to get.
    Careful about that. The big hedge funds getting into that rental market are certainly doing it in a very very big way. But it is uncharted territory fpr them. The do not have scads of experience managing rentals, much different deal than just flipping the houses to another owner. they'll have long term repsonsibility for these houses and need to keep up with tennant relations as well as properly keep up with rent payments in a ton of different markets with different regulations. I work in the field, on the contracting end. The hedge funds were buying up houses in foreclosure and saying they were going to fix them up right, and rent them. Well they were buying, but not doing enough research on the properties. Just over paying by outbidding everyone at auction, often their research on houses was by google earth, so they found houses in much worse condition than they thought. Repairs very often amounted to cosmetic coverups which will come back to haunt them as rentals. Some cities they have amassed huge numbers of houses, and might be artificially raising rental rates.
    These are the properties they are packaging and selling in the bond market, you are absolutely right when you say every bit as risky, perhaps even more than the bonds made of packaged risky home loans.
    Playing what if,,,, what if one of these funds runs out of money to operate these things? Handling tens of thousands of rental homes and the families in them, are they too big to fail?

  8. #28
    Junior XU-PA's Avatar
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    Reading material on the topic, from both sides of the story,


    http://www.bloomberg.com/news/2013-1...ing-spree.html

    http://www.motherjones.com/politics/...closure-rental

    The thing that scares some people, is that the guy who created the whole sub prime market that then went bad and belly up, has a very big hand in these bonds

  9. #29
    All-Conference Kahns Krazy's Avatar
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    Quote Originally Posted by Kahns Krazy View Post
    S&P at 1,818, nearly 23% ahead of where it was when this thread started almost exactly a year ago.

    My thought is that this is unsustainable. Short term interest rates are starting to turn, ever so slightly. When those rates start to move, I would think a lot of money would be coming out of equities and back into the bond and cash investment environment. I wouldn't think anything would happen quickly, but a flat to slightly down year in the equity markets would not surprise me. Given what has happened historically, it wouldn't surprise me if it means a market correction in the first half of the year followed by steady progress back to current levels by the end of the year.

    I'm not selling anything right now, but I'm not buying either. Building what reserves I can to take advantage of a dip if one comes.

    I am a moron. In what world is an annulized 14.5% growth rate a "dip". The dip came, and its name was Kahns.
    "Give a toast to my brother, hug your family, and do everything possible to live the life you dream of. God Bless."
    -Matt McCormick

  10. #30
    Right with you there on the topic Kahns. The investment world is just dog-ass crazy. We had some investors in today to talk about investing in a real estate related company. I said that artificially low interest rates scare me when construction financing rolls to permanent financing in about three years. The reason I am scared is that in the past, when interest rates increase, the rest of the economic fundamentals follow suit. Vacancies increase, rents decrease, tenants go bankrupt, etc. However, these current rates have been held artificially low now since 2008 and they can easily increase without the same residual domino effects of past interest rate hikes. That scares the be-jeebies out of me. The market long ago priced in higher interest rates, so when the do go up, the rest of the investment world will probably yawn and continue stepping onto the investment escalator. Our group has been factoring higher interest rates into our investment financial modeling for about 4 years now. We have been DEAD WRONG!!! I've been pricing commercial real estate deals for 25 years now and never have I been so confused as now.
    Pray the Rosary daily

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