Why is it when the tech boom that lasted from 1999 to 2001 went bust tech did not recover until mid 2007?
That is 6 years to recover, also we must take in account 9/11 but even with that we can knock off 3 years, so let's say 3 years to recover.
Well for the housing bubble which last from 2000 - 2006, why is it the the bottom of the housing market is called only 8 months after the bubble bursting?
I do not understand it, everyone is so bullish on all homebuilders and mortgage companies as if there is a bottom.
The numbers disclosed in balanced sheets are not showing me that this is a bottom.
Spring and Summer are the seasons potential homeowners buy homes, if I am not correct that is when we started to see the collapse of these industries. Since then, to my knowledge, no publicly traded homebuilders have went bankrupt, almost all publicly traded subprime companies have gone bankrupt, no publicly traded REITs or Mortgage companies that focus on prime mortgages have yet to have gone belly up, CFC is getting close, no companies that focus on commercial loans have yet to go under as well.
But all these companies are seriously in trouble because majority of the loans they originated are going into default.
My point I am trying to make here is, there is no way in hell that this is the bottom only after 8 - 12 months!!!!!
It is no way in hell, that homebuilders will not have a 2 big homebuilders (BZH, HOV, CTX, KBH, TOL, WCI), two of those homebuilders will have to go under.
This is not just a mortgage story, even more this is not just a subprime story.
People and companies obtain mortgages to purchase real estate and buldings!!!!
To sum it all up, I actually believe it that this is the tip of the iceberg but the question is will the FED and the Government sweep it under the carpet in order to keep America on top?
I say its the tip because none of the Private Equity have yet to start paying on their loans they obtained for the past two years on the big buyouts they have been doing, 2005 payments start next year by the way!!!!
I think so, I just do not know how the rest of the world will take that. Will they (other world markets) forgive us or not?
I am just very confused right now, if our government can bail out companies and people who can't pay their bills, does that not open the door for people, in the future, to tell the same lie again that they did not understand what they were getting into.
I mean look at these contracts for credit cards, they think its hard to understand mortgages? That is easy, who in the heck can really understand credit card policies?
All that said was to just make you think and my question is does this upcoming bailout make you think that this will be an expected thing everytime the foolish investors and foolish consumers are in trouble with credit?
By the way, thanks for advising me to go long, that help to hedge my 10 dollar puts and actually came out on top buy loading up.