Bill writes:
Yeah, im first - finally. Now what?
Bill | 05.06.08 - 4:18 pm | #

IrvineResident writes:
hi CR,

how bad will this slowdown hurt high tech.?
CSCO is reporting as I write.

Thnaks
IrvineResident | 05.06.08 - 4:20 pm | #

Barley writes:
Dont worry 'bout the condos because they are all pre-sold. Right?

How do the cancellation rates vary b/w sfr and condos?
Barley | 05.06.08 - 4:21 pm | #

Barley writes:
So, here we go again...

VALLEJO, Calif.—The Vallejo City Council is set to decide whether the financially strapped city should declare bankruptcy to deal with a spiraling budget crisis.
If the council votes decides to vote for bankruptcy Tuesday night, the Bay Area city of 117,000 people would become the largest in California to do so.

City Manager Joseph Tanner has advised the council to file for bankruptcy before its fiscal year ends on June 30 because the city faces a projected budget deficit of $16 million.

Many officials and residents attribute Vallejo's fiscal troubles to overly generous pay and benefits to the city's police and firefighters
Barley | 05.06.08 - 4:25 pm | #

cnonymouse writes:
Did anyone ever look at the composition of global pools of liquidity associated with the housing bubble? Didn't we mix Cambodian mortgages with mortgages from India and Alabama and Los Angeles? How did that work out in terms of pool risk?
cnonymouse | 05.06.08 - 4:25 pm | #

Calculated Risk writes:
Barley, I don't know exactly, but I think condo cancellations are typically higher.

IrvineResident, that is a key question. I've been in the less than severe recession camp - partly because I think tech might hold up relatively well. I know many people think I'm overly optimistic.

Best Wishes.
Calculated Risk | Homepage | 05.06.08 - 4:26 pm | #

Anonymous writes:
I see the bottom calling is starting to get very contagious.
Anonymous | 05.06.08 - 4:32 pm | #

gab writes:
The Cisco headline reads, "Cisco profit falls 5.4%; Sales top analysts estimates."

And the stock is trading up almost a buck in the after hours.
gab | 05.06.08 - 4:33 pm | #

Bizarro writes:
Cisco profit down. However, sales up more than expected. Market continues to go higher. Its all good baby!

I'm soon expecting: Company X has a larger than expected loss, however company says this is the low point, stock of Company X soars.

or did we already have that with the financials and the homebuilders.

BUY BABY BUY
Bizarro | 05.06.08 - 4:35 pm | #

Optimistic-Joe writes:
By both measures it appears the absolute high in new home inventory was Q3/06 and it has fallen ever since. That means builders have been building below demand for a year and a half. Eventually, they'll have to catch up and build more again. No wonder builder stocks went up.

All in all, this looks even less likely for an immediate recession (for which we are still waitning, btw). I think I was too pessimistic forecasting even 1 neg. quarter.

O-Joe
Optimistic-Joe | 05.06.08 - 4:35 pm | #

Bizarro writes:
O-Joe's right. Recessions and negative quarters are a thing of the past. Recessions are so passe.
Bizarro | 05.06.08 - 4:36 pm | #

crispy&cole writes:
10 YEAR CSCO chart- this stock has done nothing!

http://moneycentral.msn.com/inve...x=1& Symbol=CSCO
crispy&cole | Homepage | 05.06.08 - 4:37 pm | #

Optimistic-Joe writes:
BUY BABY BUY
Bizarro

Correct. I went all long this morning. It's a great time to buy stocks, particularly tech. In a matter of 2 years we'll surpass the Nasdaq ATH while the oil price goes below $70/barrel.

BTW I'll buy a SUV or minivan this week.

O-Joe
Optimistic-Joe | 05.06.08 - 4:38 pm | #

Bizarro writes:
Cisco was 12.60 in May 1998 and its 26.33 today. Its up over 100% since 1998.
Bizarro | 05.06.08 - 4:40 pm | #

crispy&cole writes:
OK 9.5 years
crispy&cole | Homepage | 05.06.08 - 4:41 pm | #

Optimistic-Joe writes:
crispy&cole writes:
10 YEAR CSCO chart- this stock has done nothing!

Look at the gold chart - it does nothing since 1980. There's a time and season for everything.

O-Joe
Optimistic-Joe | 05.06.08 - 4:42 pm | #

crispy&cole writes:
"MINVAn"

LMFAO!!!

That sums it up for me.
crispy&cole | Homepage | 05.06.08 - 4:42 pm | #

Estragon writes:
From the census bureau on cancellations:

If the house it is not yet started or under construction, it will be followed up until completion and then it will be dropped from the survey.

How does this figure into inventory numbers?
Estragon | 05.06.08 - 4:43 pm | #

Elvis writes:
"Cancellation rates are important when analyzing the New Home data from the Census Bureau. What matters is the change in cancellation rates, not the absolute level. Falling cancellation rates mean the Census Bureau is probably underestimating sales, and underestimating the decline in inventory."

CR, I've read this about 30 times and I've never fully understood it. Why would the Census Bureau be underestimating sales if they don't include cancellations. Does that mean they count cancellations as if they were sales? And, if so, why would falling rate makes the Census Bureau underestimate sales when the don't count them in the first place? It seems to me they will always overestimate sales if they don't count cancellations. By the same logic, wouldn't they always overestimate the decline in inventory, since they believe inventory is smaller than it really is (because cancellations become inventory)? I must be making some flawed assumptions or something. Can you make a numerical example for me?
Elvis | 05.06.08 - 4:43 pm | #

crispy&cole writes:
I would rather walk with bare feet than drive a minivan.
crispy&cole | Homepage | 05.06.08 - 4:43 pm | #

Yearning to Learn writes:
I echo Elvis' question
Yearning to Learn | 05.06.08 - 4:44 pm | #

cnonymouse writes:
OT (so sorry):

The risks of a MBS are
determined by the quality of mortgage loans which are accumulated. While adding high
quality mortgages reduces risk, obviously the credit quality of a sub prime mortgage pool
does not improve through the acquisition of more low quality loans. Furthermore, the
state of the real estate market influences the performance of mortgage-backed assets.
Clearly, securities composed of assets all from one sector are not truly diversified and
their performance is significantly dependant on the health of the housing market.
Members of the securitization industry are guilty of inspiring false confidence in the
MBS market. The industry marketed MBS as stable instruments insulated from the risks
of a housing downturn. These factors worked in unison to artificially inflate the MBS
market by fooling investors to believe that bad loans could be transformed through the
sophistication of the investment industry. Predictably, this was not the case.

his report focuses to a significant degree on ABS CDOs, which are an order of magnitude more complex than investment-grade corporate CDOs, since their collateral pool consists of a portfolio of ABS. Each ofthese ABS is itself a tranche of a securitisation whose underlying collateral is a pool of hundreds or thousands of individual credit assets. Referring to this complexity, one marketparticipant described ABS CDOs as “model risk squared.” At the same time that CRT products have become more complex, the investors in CRT havegrown more diverse and global. More market participants have become comfortableinvesting in CRT, which is an important factor explaining its growth. On balance, CRT activity has transferred credit risk out of the United States into global markets.

Given the complexity of this analysis, some market participants feel there has been a heavy reliance on rating agencies’ analyses and assessment of correlation risk. However, for ABS CDOs, the correlation parameters in the rating agencies’ models were not derived from any empirical data, due to the short data history available on the default history of the underlying subprimeRMBS
cnonymouse | 05.06.08 - 4:44 pm | #

Yearning to Learn writes:
O-Joe:
I'd also encourage you to look at the Prius. I know I know, it's leftist and liberal.

but I liked it a lot more than I thought I would. lots of room and cargo room, much bigger car than I thought.

in the end I bought an SUV, but I was this close to the Prius, and even now wonder if I erred in my judgement.
Yearning to Learn | 05.06.08 - 4:45 pm | #

MLM writes:
OMG, doc what have they done to you? They turned you into a mouse!
MLM | Homepage | 05.06.08 - 4:45 pm | #

Estragon writes:
It seems to me sales would be understated if and to the extent uncounted cancellations < uncounted subsequent sales of previously cancelled sales. Does that make sense?
Estragon | 05.06.08 - 4:45 pm | #

enonymasse writes:
Right on O-Joe! Buy buy buy! The recession is very old news and priced into the future!!
enonymasse | 05.06.08 - 4:46 pm | #

Gary writes:
Did anyone ever look at the composition of global pools of liquidity associated with the housing bubble? Didn't we mix Cambodian mortgages with mortgages from India and Alabama and Los Angeles? How did that work out in terms of pool risk?
cnonymouse | 05.06.08 - 4:25 pm | #

I think you meant "golden pools" of liquidity . . . sloshing over brown islands of Alpha.
Gary | 05.06.08 - 4:46 pm | #

Bob Dobbs writes:
"BTW I'll buy a SUV or minivan this week."

You _are_ optimistic. I'll second YTL's Prius recommendation -- it's a good ride as well as economical -- but get a hybrid SUV at least.
Bob Dobbs | Homepage | 05.06.08 - 4:47 pm | #

enonymasse writes:
MLM,

what the hell are you talking about?
enonymasse | 05.06.08 - 4:48 pm | #

chickenlittle writes:
CR,

This is the last time I will post on this topic regarding cancellation rates. The key reason cancellation rates are declining are because builders are LIQUIDATING SPECS at very cheap prices.

Buyers of highly discounted specs typically don't cancel. For example, DR Horton held its "non auction" sales blowing houses out the door at 50% off. Such sales are conducted on tight contracts and generally are not repeatable for any extended period of time.

We should start to see cancellation increase materially in upcoming quarters as spec inventories are depleted.
chickenlittle | 05.06.08 - 4:50 pm | #

Elvis writes:
"It seems to me sales would be understated if and to the extent uncounted cancellations < uncounted subsequent sales of previously cancelled sales. Does that make sense?" -- Estragon

That makes sense when home sales are increasing, but, I don't think it follows when home sales are decreasing (ie less homes sell both of cancelled new and new inventory).
Elvis | 05.06.08 - 4:52 pm | #

Bizarro writes:
Disney profits up 22%, sales better than expected. This economy is humming along everywhere.
Bizarro | 05.06.08 - 4:52 pm | #

crispy&cole writes:
Let be the first recession caller to say - THE RECESSION IS OVER!
crispy&cole | Homepage | 05.06.08 - 4:54 pm | #

Barley writes:
FNM up 8%, go figure
Barley | 05.06.08 - 4:54 pm | #

Barley writes:
First it was student loans syndication that blew up now it is this. How will our children pay for their education?

http://news.yahoo.com/s/ap/ 20080...llege_drug_bust
Barley | 05.06.08 - 4:57 pm | #

FFDIC writes:
FBI Agents Raid Work, Home
Of Special Counsel's Bloch
"Federal Bureau of Investigation agents raided the Office of Special Counsel here, seizing computers and documents belonging to the agency chief Scott Bloch and staff.
More than a dozen FBI agents served grand jury subpoenas shortly after 10 a.m., shutting down the agency's computer network and searching its offices, as well as Mr. Bloch's home. Employees said the searches appeared focused on alleged obstruction of justice by Mr. Bloch during the course of an 2006 inquiry into his conduct in office."
http://online.wsj.com/article/ SB...d=djemalertNEWS
FFDIC | 05.06.08 - 4:59 pm | #

IrvineResident writes:
update on CSCO:

US and some Europians are cautious. share starts dropping
IrvineResident | 05.06.08 - 5:00 pm | #

crispy&cole writes:
btw - I am kidding
crispy&cole | Homepage | 05.06.08 - 5:01 pm | #

Estragon writes:
Elvis,

No doubt previously cancelled sales would drop along with sales generally, but I think the arithmetic relative to cancellation still holds.
Estragon | 05.06.08 - 5:02 pm | #

tyaresun writes:
One has to be careful in interpreting tech earnings results. One has to factor in the % of earnings coming in from US vs outside. Companies that have a larger share coming from outside are still giving decent earnings guidance and outperforming competitors with a higher % earnings coming from the US. Given the lag in slowdown, the situation will reverse in the future because the US will come out of the recession first, at least that is my guess.
tyaresun | 05.06.08 - 5:04 pm | #

Calculated Risk writes:
chickenlittle, there are other explanations for lower cancellations rates than just selling at a discount: 1) buyers are aware of the tighter lending standards and are planning accordingly, 2) most builders are requiring larger downpayments and actually pre-qualifying buyers, 3) some builders are guaranteeing the sales price (if they ever sell the same new home for less, they would refund money to the buyer). I think we've seen the peak in cancellation rates for this cycle.

Elvis, what we'd actually like to know is the number of net homes sold each month (the public builders report this number each quarter).

However that isn't what the Census Bureau reports. Take a home that is first sold in January. Then the home is cancelled in June, and then resold in August. The Census Bureau reports it as sold in January, but ignores the transactions in June and August.

If we were looking at net sales, we'd increase sales by one in January, reduce sales by one in June, and then increase sales by one in August.

This analysis is an attempt to adjust to net sales.

Best Wishes.
Calculated Risk | Homepage | 05.06.08 - 5:05 pm | #

Bizarro writes:
Tyaresun - in order for the US to come out of a recession it has to enter one first.
If it does ever go into a recession though, stocks will rally hard given that stocks will be able to see past the valley.
If the US doesn't enter into a recession then stocks will just rally hard.
Bizarro | 05.06.08 - 5:06 pm | #

Elvis writes:
CR,

I understand that part, but, I don't think I understand where the underestimating sales part comes in, and I don't think I ever will. So, I appreciate the try, but, I'm destined to be clueless on this one for eternity. Damn math gets me everytime.
Elvis | 05.06.08 - 5:10 pm | #

Peripheral Visionary writes:
I continue to be surprised at the relatively small number of homebuilders who have gone under. Given the huge increase in the residential construction industry over the last five years, it would seem likely that a significant number of builders would go bust, but current indications seem to indicate that most are holding on.

There may be a reason for it. Homebuilder profit margins may have been so large that they have been able to continue selling homes by slashing prices to undercut hapless homeowners trying to sell their own properties. As prices get closer to the cost of construction, however, their ability to do so may be limited. Even more ominously, they are about to go up against massive volumes of REOs just coming out of foreclosure proceedings.

Whatever new home inventory levels may be, I suspect the problems for the homebuilders are far from over. I don't think a bottom for the homebuilders can be called until the REO stock has been significantly depleted, and as far as I am aware the banks have only begun to sell their properties.
Peripheral Visionary | 05.06.08 - 5:11 pm | #

burnside writes:
Is there a data set which reflects the activity in the condo market?

I ask because condominium development and sales are statistically significant in Florida, perhaps in other parts of the country.
burnside | 05.06.08 - 5:11 pm | #

Peripheral Visionary writes:
Condo sales are also a huge factor for the Washington Metro area, probably a bigger factor than single home sales.
Peripheral Visionary | 05.06.08 - 5:15 pm | #

BottomCallTabulatorMatrix writes:
Anonymous writes:
I see the bottom calling is starting to get very contagious.


it's really easy when your 150 points from the intraday low(sp500-1270), months ago.

BOTTOM BOTTOM....


did'nt barton release his head for the hills book on the day of the low...

What a Marketer!!
BottomCallTabulatorMatrix | 05.06.08 - 5:15 pm | #

Canadian watching with popcorn writes:
Optimistic-Joe is throwing it all into the market. All $600 LOL.


More butter please.......
Canadian watching with popcorn | 05.06.08 - 5:16 pm | #

TradingStats writes:
I'm waiting for a 1427 print to go all in short. my vehicle will be spu options 50 points ITM. 45 days out.
TradingStats | 05.06.08 - 5:19 pm | #

crispy&cole writes:
BZH gets a NOD:

Beazer Homes gets default notice

http://www.marketwatch.com/news/...D& dist=hplatest
crispy&cole | Homepage | 05.06.08 - 5:26 pm | #

burnside writes:
Let me just say that you would not have a reliable estimate of construction, sales or cancellations in Miami or in any of the towns of any size in this state without data reflecting what's happening in the condo market.

Each time I see that observation - and I've read it many times here and elsewhere - that 'most condominiums are not included in new home inventory or new home sales from the Census Bureau', I think, well then that's very poor data if you're trying to show the scale or shape of the marketplace.
burnside | 05.06.08 - 5:27 pm | #

botwannasum writes:
Forget homes, think EPS growth and stocks!!

Re: Chinese oil consumption will climb 4.7 percent to 7.89 million barrels a day this year, the International Energy Agency said on April 11. Global demand will rise 1.5 percent to 87.23 million barrels a day, the IEA said. The Paris-based agency is an adviser to 27 industrialized nations.


Higher oil is great for positive inflation; don't be priced out of the next bubble!
botwannasum | 05.06.08 - 5:28 pm | #

Elvis writes:
burnside,
If people buy then and live in them, they should be included. I guess the problem is nobody buys them. (But, I completely agree with you that failing to include condos distorts and minimizes the oversupply problem immensely in many areas.)
Elvis | 05.06.08 - 5:34 pm | #

nanya writes:
"I see the bottom calling is starting to get very contagious"

Hmmm...

So folks are starting to call bottom right when the indexes are tagging or slightly crossing their 200 day moving averages. Like clockwork!
nanya | 05.06.08 - 5:37 pm | #

burnside writes:
Elvis, my problem in broaching the subject is that I simply don't know how significant the distortions are. Saying it's a strong factor locally isn't very useful.

But if it should prove to differ as significantly as do OFHEO and Case-Schiller, then some of our ideas derived from Census Bureau stats may require another look.
burnside | 05.06.08 - 5:39 pm | #

MLM writes:
If it does ever go into a recession though, stocks will rally hard given that stocks will be able to see past the valley.
If the US doesn't enter into a recession then stocks will just rally hard.

Bizzaro, I'm ready to drop Seb as an investment adviser and go with you. You seem to have a special insight into what's going on.
MLM | Homepage | 05.06.08 - 5:47 pm | #

sam writes:
FIrst!
sam | Homepage | 05.06.08 - 5:50 pm | #

ShortCourage writes:
RE: Beazer default notice...

That's very good news for other homebuilders, as there will be less competition when Beazer goes bankrupt. Loop for another pop in HB stocks tomorrow.

(Don't laugh, look at how casino stocks jumped today after Tropicana's bankruptcy announcement!)

Wheee! This is fun!
ShortCourage | 05.06.08 - 5:54 pm | #

CRjunky writes:
http://www.latimes.com/business/ ...0,7536437.story

no more palmer johnson's!


cash only

i'm thinking they could'nt raise enough from there ge interest plus campaign that they had been advertising here at cr.
CRjunky | 05.06.08 - 5:57 pm | #

ShortCourage writes:
Homebuilder stocks are just keeping up with the general insanity of the major stock indices.

S&P500 PE ratio has gotta be approaching 25 right about now. Of course, it reached over 40 during the height of the dot-com bubble, but we weren't facing ramping inflation and a credit crunch back then!

I'm beginning to think the only thing that will keep us from having another stock bubble is a bond revolt, and a Fed forced to raise rates and let leverage unwind.
ShortCourage | 05.06.08 - 6:00 pm | #

CRjunky writes:
"We just really looked at a lot of different alternatives and are facing a challenging environment and ultimately came to the decision that we needed to invest our resources and capital in areas where we could see good return," Williams said.



where, tell us where???


Commodities? WHeat? Oil?

sp futures!

sebastian's portfolio?

where can you get a better return than a boomer's desire to hit the open road on a 70 foot land yacht and years supply of viagra.
CRjunky | 05.06.08 - 6:01 pm | #

Elvis writes:
"Saying it's a strong factor locally isn't very useful."
burnside

No, but knowing the problem exists and the fact that it causes significant distortions in the data does help. Mots people assume data is correct and that can be fatal. So, you knowing not to trust these numbers gives you a huge advantage over most. I'd say that is useful knowledge. I's imagine that you extrapolating data from other, more reliable sources, can provide you with the answers you want.

The force is strong in you, burnside. Follow your instincts.

Yoda
Elvis | 05.06.08 - 6:05 pm | #

Bizarro writes:
Good choice MLM. I know the secret of when to sell on Bizarro world - NEVER.
Bizarro | 05.06.08 - 6:05 pm | #

idoc writes:
PE's

http://online.wsj.com/mdc/ public...d=topnav_2_3000
idoc | 05.06.08 - 6:09 pm | #

RussianRoulette writes:
since 1995. It had been becoming difficult to determine how lax since March 2006, when the Federal Reserve stopped reporting M3 money supply, the measure used in by the European Central Bank and other monetarist organizations. However the St Louis Fed, which for the decade until April was run by the monetarist William Poole, has constructed its own measure of broad money, Money of Zero Maturity, which is a reasonable proxy for M3; it consists of M2 plus institutional money market funds minus small time deposits. Like M3, MZM began to expand excessively in early 1995; in the 13 years to March 2008 it grew at an average annual rate of 8.88%, compared with growth in nominal GDP during that period of 5.25%.


Print Print Print

all day long , FED prints.
RussianRoulette | 05.06.08 - 6:39 pm | #

Alec writes:
Tech in the 2nd half of the year will be saved by Vista
[/snark]
Alec | 05.06.08 - 6:40 pm | #

Mark S writes:
This rally is not terribly surprising. As long as the Fed continues this kind of nonsense the market will likely go higher.

Of course, oil and commodities will likely go much higher as well. Really, this is an astoundingly rapid transfer of wealth from the masses to the high rolling investor class. You would think the masses would eventually grow a tad perturbed.
Mark S | 05.06.08 - 6:52 pm | #

barely writes:
chickenlittle - I agree. With a deep enough to be called savage and a serious committment of course those sales won't cancel. That is evidenced by sharp losses. Builders can call it markdowns... or whatever, but it's a loss on sale.

They are probably paring back inventory by giving it away. This could be to close out subdivisions so the firesales don't affect THEM, in terms of comps on future builds? Ans sales WILL decline from here, if this is truly the driver.

Nonetheless - Now what, for act 3?
barely | 05.06.08 - 6:55 pm | #

Topher writes:
nanya writes:
"I see the bottom calling is starting to get very contagious"

Hmmm...

So folks are starting to call bottom right when the indexes are tagging or slightly crossing their 200 day moving averages. Like clockwork!
nanya | 05.06.08 - 5:37 pm | #




"I see the bottom calling is starting to get very contagious"



I don’t hear an echo yet. Must be deep.

Hmmm……….
Topher | 05.06.08 - 6:56 pm | #

mjc writes:
Re: PE's

http://online.wsj.com/mdc/ public...d=topnav_2_3000
idoc | 05.06.08 - 6:09 pm | #

This P/E ratio has to be wrong:
5/6/2008 Year ago Estimate^
Dow Industrial 69.71 17.67 14.52
mjc | 05.06.08 - 6:56 pm | #

Sebastian writes:
Elvis said: "Most people assume data is correct and that can be fatal. So, you knowing not to trust these numbers gives you a huge advantage over most."

That is precisely the opposite of what I've observed here, elsewhere and elsewhen.

The absolute biggest mistake people consistently make (and this includes the so-called "pros" who should really know better) is trusting their own opinions over the objective facts.

Waiting for a phantom recession, pricing subprime loans as if they were prime, drawing to an inside straight, starting your own business, and buying lottery tickets are all excellent examples of trusting your "gut" over the facts.


Sebastian
Sebastian | 05.06.08 - 7:01 pm | #

Barley writes:
O/T

Did somebody do their math incorrectly, or was there a pressing need for even more cash-ol-a

More dilution!!

May 6 (Reuters) - Citigroup Inc (C.N: Quote, Profile, Research) on Tuesday sold $2.0
billion in non-cumulative perpetual preferred securities, said
market sources. The size of the deal was increased from the originally
planned $300 million. Citigroup Global Markets was the sole bookrunning manager
Barley | 05.06.08 - 7:11 pm | #

AllenM writes:
http://biz.yahoo.com/ap/080506/e...06/ economy.html

Fannie just blew chuncks and then stated housing will get worse.

Someday this war's gonna end...
AllenM | 05.06.08 - 7:12 pm | #

dunham writes:
Waiting for a phantom recession, pricing subprime loans as if they were prime, drawing to an inside straight, starting your own business, and buying lottery tickets are all excellent examples of trusting your "gut" over the facts.

?
dunham | 05.06.08 - 7:12 pm | #

barely writes:
sebastian - "Waiting for a phantom recession"

LMAO. You are really way too sharp. Sharper than Feldman (NBER), Buffett, Greenberg (AIG)...even CR. Look at car sales.

Anyone that runs a decent sized business can tell you we are IN A RECESSION dammit.
barely | 05.06.08 - 7:12 pm | #

dunham writes:
"http://biz.yahoo.com/ap/080506/e...06/ economy.html

Fannie just blew chuncks and then stated housing will get worse."

This happened this AM and the market liked it.
dunham | 05.06.08 - 7:13 pm | #

Elvis writes:
"The absolute biggest mistake people consistently make (and this includes the so-called "pros" who should really know better) is trusting their own opinions over the objective facts." Seb.

Understanding that the data is lacking due to insufficeint scope or scale so that it understates or overstates a problem is a key to finding areas of misvaluation. When data excludes relevant, price effecting information, the fact is the data is insufficient. The opinion may be how insufficient the data is and how significant the resulting mispricing, but missing data is still a fact.
Elvis | 05.06.08 - 7:17 pm | #

Sonic Seuss writes:
For those forward 12 month PEs where exactly do they get the estimates from? The companies themselves? Analysts? Genie in a bottle?
Sonic Seuss | 05.06.08 - 7:18 pm | #

barely writes:
Q: Did Hank Paulson reaffirm his strong dollar policy today?
barely | 05.06.08 - 7:23 pm | #

anon writes:
crispy,
on the CSCO chart, does it include stock split? CSCO split numerous time prior to the tech boom
anon | 05.06.08 - 7:44 pm | #

FFDIC writes:
Builder Group Resumes Campaign Contributions
"The National Association of Home Builders, one of the biggest corporate donors to politicians, has resumed contributing to congressional candidates, declaring that Congress has finally begun to pay attention to the weak housing market."
http://www.washingtonpost.com/wp...id=sec- business
FFDIC | 05.06.08 - 8:30 pm | #

central_scrutinizer writes:
By both measures it appears the absolute high in new home inventory was Q3/06 and it has fallen ever since.
Since I'm feeling charitable, I'll give you that one.

That means builders have been building below demand for a year and a half.

Nope, you confuse two separate things (supply and demand.)

Builders have been reducing supply, through fewer starts. However, demand has been sinking faster. If CR's chart was plotted using months of inventory vs. absolute numbers on the y-axis, I bet you would see this.

Learn to apply more critical thinking skills. Of course, if you want to go long any of the builders, be my guest.
central_scrutinizer | 05.06.08 - 9:51 pm | #

Half Empty writes:
Some of you guys are very funny. This is an addictive place. Sebastian - have you ever looked back and seen a 425 bp rise in short rates that did NOT produce a recession two years out? When NBER gives the final word, the beginning, end or both will be in 2008. Also, check out this time approx. in 2001 where a bear market rally took the S&P up some 17+% from about 1100 in early April to 1300 or so, by late May. The market saw two days that month over 1300, but not again until 2006! It did hit around 800 in 2002. Good luck with those long trades!
Half Empty | 05.06.08 - 10:31 pm | #