1. that FRE and FNM will beat earnings.
1b. FRE and FNM will say house price decline is less negative and may bottom out in 6 to 12 months.
2. that it won't matter because I tell you right here and now, mortgage losses ACCELERATE AFTER housing flattened.
3. A fact nobody mentioned, is that in years past unemployment caused house price declines. Now we have a house price increases, which reduced unemployment, and then house price declined significantly while unemployment LAGGED and APPEARED to HAVE STAYED STRONG. Now the cracks show on employment, finally. When the CLASSIC tale of unemployment driving house price declines show up, I know you will be ready, won't you?
With all the above under consideration, I am very close to declaring an all out jihad to i) GROWTH stocks and ii) FINANCIALS (regionals, IB, GSE, and commercial REITs) and iii) END/LEISURE CONSUMER stocks.
As an added bonus, we may get an excellent entry price, our patience will finally pay off in spade, because of the added "technicals" such as hedgefunds liquidating financials short in the next few days as their commodity bet went sour ( which is exactly what would happen in a deflationary economy, as I recalled mentioning several weeks back, no actually last week, see the last article in this page. Very timely, I'd say. ).
Stay strong, this is like 8 pm on Jun 5, 1944. Pack the parachutes, bring extra ammos and grenades cuz we're hunting those Nazi sonofbitzes down like the swine they are. Or like the GS employees they are. Heheheh.
The right enemy
5 years ago