We really see something taking place that looks like a recession...
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CONTRIBUTOR Ian L. Cooper Editor, Death Cross Trader www.deathcrosstrader.com
It's absurd to call the bottom of housing, or an improving lending market. Just ask companies like Lennar, KB Home, and DR Horton, who still don't see this mythical housing bottom. Or ask Mortgage Lenders Network USA, which just filed for Chapter 11 protection, becoming yet another casualty of the lending market in a slowing housing market.
That's what I told readers on February 6, 2007. I also gave them three ways to profit from the continuing slump in the U.S. housing market. One of them was down $9 in one day on a surprisingly poor earnings report, an announcement that it would restate financial numbers for Q1, Q2 and Q3 of 2006 to correct accounting errors, and news of two downgrades from Friedman Billings and by Jefferies & Company.
That sounds like it would be bad news... unless of course you held a short position (or put options) on that stock. Indeed, that's exactly what we had recommended: Death Cross Trader readers had a chance to walk away with 70% two-day gains today -- on only half of this position.
"Mortgages are the one area of sub-prime lending where we really see something taking place that looks like a recession..." That very statement spoken by JP Morgan's CEO, James Dimon, is just an inkling of the tumultuous future for sub-prime lending.
While I'd love to sit here and jump on the bullish housing bandwagon that dominates Wall Street, question the homebuilders themselves and the Street’s delusional madness seems far-fetched.
According to MortgageDaily.com, "The sub-prime sector still has another year of tough times ahead." That's supported by Countrywide Financial, which says, "We've got another eight, nine, 10, 12 months of headwinds. You’re seeing 40 or 50 (sub-prime companies) a day throughout the country going down in one form or another. I expect that to continue throughout the year."
Worse yet, the most recent Center for Responsible Housing report projects that "2.2 million borrowers will lose their homes and up to $164 billion of wealth in the process."
Ian says, "The housing market has not bottomed. Sub-prime lenders are doomed. You can continue to listen to the delusional madness pouring from the mouths of Street analysts, and the mainstream press, or you can listen to the homebuilder CEOs and the sub-prime lenders that have gone belly up because of a weak housing market. It’s your choice. I’d go with the latter, though."
www.deathcrosstrader.com
It's absurd to call the bottom of housing, or an improving lending market. Just ask companies like Lennar, KB Home, and DR Horton, who still don't see this mythical housing bottom. Or ask Mortgage Lenders Network USA, which just filed for Chapter 11 protection, becoming yet another casualty of the lending market in a slowing housing market.
That's what I told readers on February 6, 2007. I also gave them three ways to profit from the continuing slump in the U.S. housing market. One of them was down $9 in one day on a surprisingly poor earnings report, an announcement that it would restate financial numbers for Q1, Q2 and Q3 of 2006 to correct accounting errors, and news of two downgrades from Friedman Billings and by Jefferies & Company.
That sounds like it would be bad news... unless of course you held a short position (or put options) on that stock. Indeed, that's exactly what we had recommended: Death Cross Trader readers had a chance to walk away with 70% two-day gains today -- on only half of this position.
"Mortgages are the one area of sub-prime lending where we really see something taking place that looks like a recession..." That very statement spoken by JP Morgan's CEO, James Dimon, is just an inkling of the tumultuous future for sub-prime lending.
While I'd love to sit here and jump on the bullish housing bandwagon that dominates Wall Street, question the homebuilders themselves and the Street’s delusional madness seems far-fetched.
According to MortgageDaily.com, "The sub-prime sector still has another year of tough times ahead." That's supported by Countrywide Financial, which says, "We've got another eight, nine, 10, 12 months of headwinds. You’re seeing 40 or 50 (sub-prime companies) a day throughout the country going down in one form or another. I expect that to continue throughout the year."
Worse yet, the most recent Center for Responsible Housing report projects that "2.2 million borrowers will lose their homes and up to $164 billion of wealth in the process."
Ian says, "The housing market has not bottomed. Sub-prime lenders are doomed. You can continue to listen to the delusional madness pouring from the mouths of Street analysts, and the mainstream press, or you can listen to the homebuilder CEOs and the sub-prime lenders that have gone belly up because of a weak housing market. It’s your choice. I’d go with the latter, though."
www.deathcrosstrader.com
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