Some points I would like to make:
- US homebuilders had a huge rally, and are now valued as much as they were a year ago sometimes.
- few bloggers mention it,
- it seems financial newspapers are not even interested to mention this, being too busy reporting about "green shoots" and recoveries, and Obama´s confidence,
- and very few people remind investors that homebuilders face a very tough market. US foreclosures are higher that last year. Housing prices are lower than last year and prices are still dropping at high speed. Unemployment is up and going higher. US households have lost 20 to 25% of their net worth since a year ago.
And some insiders are selling like mad: see Toll Brothers CEO insiders´trades.
I think it is a scandal that this CEO can get away with this kind of behavior without being called for it by mainstream media. When will CNBC, Financial Times, WSJ do their work?
This CEO should be invited asap by CNBC, Fox news, and grilled on why he has been selling shares of his own company for the last 2 years.
I see no fundamental explaining the rally in homebuilders.
The only reason the rally could continue I believe, would be short squeeze, or continued irrational rally...
Disclaimer: some short positions on US homebuilders.
Sunday, April 19, 2009
Tuesday, March 17, 2009
Citigroup (NYSE:C) and AIG (NYSE:AIG)- short interest building up again
source: bigcharts.comIt seems the short sellers are choosing their preys right now. C and AIG are clearly among them.
After AIG political fiasco (with their wonderful idea of giving bonuses), I believe there is little chance the shareholders will keep a dollar.
Tuesday, February 24, 2009
Microsoft (MSFT) market capitalization back to 1997 level
MSFT market capitalization is currently at less than $148 billion.
According to this article from the New York Times dated June 1997, the market capitalization of Microsoft at that time was $142.8 billion:
And a few months later it went above the current $148 billion.
The big difference is that the earnings are today much higher. Of course the earnings in the next 2/3 years might not stay at 2007/2008 high level, but the future still looks good for Microsoft in my opinion.
According to this article from the New York Times dated June 1997, the market capitalization of Microsoft at that time was $142.8 billion:
"But Microsoft's closing share price yesterday was still a remarkable 45 times estimated fiscal year 1997 earnings of $2.63 a share, giving the company a market capitalization of $142.8 billion."
And a few months later it went above the current $148 billion.
The big difference is that the earnings are today much higher. Of course the earnings in the next 2/3 years might not stay at 2007/2008 high level, but the future still looks good for Microsoft in my opinion.
Sunday, February 22, 2009
My take on the US housing plan
I am no expert but what I can see is:
- taxpayers will have more to pay,
example here:
"the government and Investment Bank share the cost of further reducing the interest rate so that the Family C’s monthly debt-to-income level is lowered to 31%"
- I do not see specific details on how the government will implement this plan so that speculators will not benefit from it.
The example sheet has three examples, all leading to a refinancing. There is no example of how the plan will handle someone who would not deserve to be helped by tax payers.
So the general idea seems kind (to help families facing difficulties), but what if half the money goes from the pockets of "reasonable" families (taxpers who did not buy houses) to "irresponsible" people who were gambling in the housing market?
- taxpayers will have more to pay,
example here:
"the government and Investment Bank share the cost of further reducing the interest rate so that the Family C’s monthly debt-to-income level is lowered to 31%"
- I do not see specific details on how the government will implement this plan so that speculators will not benefit from it.
The example sheet has three examples, all leading to a refinancing. There is no example of how the plan will handle someone who would not deserve to be helped by tax payers.
So the general idea seems kind (to help families facing difficulties), but what if half the money goes from the pockets of "reasonable" families (taxpers who did not buy houses) to "irresponsible" people who were gambling in the housing market?
The white house housing plan debate
The plan seems to be here.
Here is a link to the White House reaction to Rick Santelli´s rant.
I guess we will all have to make up our mind.
Can´t trust anybody these days.
Here is a link to the White House reaction to Rick Santelli´s rant.
Also interesting is this reaction:
I guess we will all have to make up our mind.
Can´t trust anybody these days.
Thursday, February 19, 2009
Excellent interview from Chris Whalen
You can check it out here.
First time I see him in interview and he is very clear on what needs to happen and the extent of the potential losses as Citigroup, Bank of America, Wells Fargo/Wachovia, and JP Morgan.
His idea of receivership "a la WaMu" sounds good and realistic. It is the first time I hear someone who is realistic about the situation, and offers a clear path. Of course it´s a painful path, inclduing for bond holders: this 50% haircut on Citigroup bond holders, that will raise some fear to the bond holders. But it´s this or the american taxpayers take the costs.
First time I see him in interview and he is very clear on what needs to happen and the extent of the potential losses as Citigroup, Bank of America, Wells Fargo/Wachovia, and JP Morgan.
His idea of receivership "a la WaMu" sounds good and realistic. It is the first time I hear someone who is realistic about the situation, and offers a clear path. Of course it´s a painful path, inclduing for bond holders: this 50% haircut on Citigroup bond holders, that will raise some fear to the bond holders. But it´s this or the american taxpayers take the costs.
Subscribe to:
Posts (Atom)
Posts
