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New York Community Bancorp Inc. Message Board

  • brklnapt brklnapt Feb 28, 2009 1:28 PM Flag

    Longs are wrong shorts are right

    Look, go back and read the posts by the longs. They have cheerleaded this stock into the ground. They continue to post positive news and forecasts about this stock, and it continues to decline. Meanwhile shorts are lambasted and called names (I was called a "maggot" by one long") and yet the shorts have continued to be proved right.
    The definition of insanity is to do the same thing over and over again and expect a different result. Ask yourself, are you insane?

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    • Frankly, not being an accountant and and my education being in health care, and not finance, I really would not be able to discern if NYB's underwriting standards are conservative enough. I am relying on reading several years of conference calls, financial conferences, studying their past quarterly reports of several years, and the performance of their stock price during several cycles, to infer the type of underwriting that they perform.

      Bottom line, as a reflection of the stock price during the last four months, you have been right on, in your analysis, and I have been wrong, as NYB's stock price has gone from the mid 15 dollar range to the low 9 dollar range. As I have previously said, we will see if this stock price is a harbinger of more pain to come, for NYB, or alternatively, if during the oncoming quarters, NYB will be able to differentiate it's business model, from others, and have it's stock price commensurately increase in price, as a reflection of it's anticipated earnings power. Time will tell and you certainly have been right and I have been wrong, so far.

      On another note, I think I am going to take a hiatus from the message board of NYB, for a while, as the state of the economy and the status of my various stock holdings (all down in price) has gotten me melancholy and I think I need to refresh my mind and my body by avoiding constant communication with the stock prices and the stock market. I will be back, God willing, but I am going to take a break for a while.

      I have enjoyed your intelligent counterpoints to us NYB long stock investors, and wish you well. As I said, I will be back, but I want to re-group and clear my head a little bit.

    • Frankly, not being an accountant and and my education being in health care, and not finance, I really would not be able to discern if NYB's underwriting standards are conservative enough. I am relying on reading several years of conference calls, financial conferences, studying their past quarterly reports of several years, and the performance of their stock price during several cycles, to infer the type of underwriting that they perform.

      Bottom line, as a reflection of the stock price during the last four months, you have been right on, in your analysis, and I have been wrong, as NYB's stock price has gone from the mid 15 dollar range to the low 9 dollar range. As I have previously said, we will see if this stock price is a harbinger of more pain to come, for NYB, or alternatively, if during the oncoming quarters, NYB will be able to differentiate it's business model, from others, and have it's stock price commensurately increase in price, as a reflection of it's anticipated earnings power. Time will tell and you certainly have been right and I have been wrong, so far.

      On another note, I think I am going to take a hiatus from the message board of NYB, for a while, as the state of the economy and the status of my various stock holdings (all down in price) has gotten me melancholy and I think I need to refresh my mind and my body by avoiding constant communication with the stock prices and the stock market. I will be back, God willing, but I am going to take a break for a while.

      I have enjoyed your intelligent counterpoints to us NYB long stock investors, and wish you well. As I said, I will be back, but I want to re-group and clear my head a little bit.

    • true 2000 01 02 was mild

      this looks different from both drops

      this is an over priced situtation

      more so then an over build imo

    • good points ! although most store fronts are rented ( and some have had their rent lowered ) and yet others remain boarded up fr 6 months to over year now i see on broadway upperwest side

      some blocks are half unrented now

      while other blocks are fully rented

      so there some problems

      i had dinner with my friend who owns a building in harlem ( no store fronts ) just apts he now has 3 vacant apartments and he said the market has weakened in the last 3 weeks or so

      he is lowering rent 10 to 15%

      yet these rents have been rising for 10 years

      he said he is offering rent price same as was in 2000

      so there is a big drop

      nyc is getting hit last i suppose

      again , vacancy is still very low but more then before

      rents coming down

      but it is not like owning fl mortgages

      these things have cash flow reduced yes but cash flow

      joco

    • Also: don't forget about the vacant storefronts. These can go vacant for years. I know two landlords with storefronts empty for over a year. Apparently if a tenant abandons a storefront, it takes a minimum of four months just to get the right to even enter the store again. These landlords were shooting for starbucks and citibank, now they hope to get a deli.

      Anyway, the rent from a storefront can account for 50% or more of a building's income. Talk about cash flow!

    • Yes I agree early 90s was a big drop, not mild at all, I guess I was referring to the 2001-2002 drop as mild

      My buildings are small and all in brooklyn with lower rents, so far no vacancies. I know landlords with similar sized buildings in manhattan that have dropped rents and still have vacancies. These are the so called mixed use properties NYB lends against as well as decontrolled buildings, ie buildings mortgaged as stabilized but now market rate. Just because NYB wrote a mortgage on a stabilized building doesn't mean it wasn't decontrolled. If it's in manhattan, odds are the landlord tried to take the apts off the rolls.

    • good points all

      yet

      i submit the 1987- 1995 drop in re was more then mild

      it was a 50% drop

      there was tons of supply on the market

      they changed tax laws then and was huge amount of conversions to condo and coops

      now there are few of those though loads of new condo built that is going to get wacked

      in 1991 there was tons more on the market and the city was not so nice

      although now it is in decay again : 0 )

      tax abatment thats what happened something like that in 1986 then we had over supply

      i think prices are are in bubble land here in nyc now

      35% drop is in order

      but i say again what is the vacancy rate

      housing is tight in nyc

      yet folks are leaving to cheaper places

      should be interesting what happens no one know esp famous people like buffet

      that is what makes markets fun

      my key is vacancy rate how funny you say all this and then say your building is fully rented

      nyc is funny place

      jco

    • I think there are two factors that might make this worse than the early 90s.

      The first is luxury decontrol, passed in 1997. This allowed landlords to take apartments off of the rolls, effectively making the rents market rate. Luxury decontrol ran rampant in the last ten years. Many buildings were sold on the basis that apartments could be decontrolled, so landlords paid higher prices for these buildings as a result.

      The second factor is the historically unprecedented bubble in real estate prices. Manhattan buildings that sold for under $1MM before 2000 traded for up to ten times that a mere five years later. Mixed use and stabilized buildings participated in the bubble, partly as a result of luxury decontrol.

      I guess it all depends on how conservative you think NYB's underwriting was. I am saying it was not conservative enough. Basically the bubble brought us to another level of pricing. That is being ratcheted back.

      We have learned that there are no asset classes immune to the meltdown. I don't think the properties that NYB loaned against are immune. I guess we'll see.

    • Your point is well-taken and already considered in my analysis. Your question as to "should I believe, as CEO Ficalora believes, in the confidence of NYB's business model and their ability to withstand this downturn," I only have their past history and present history, to go by. In the last negative credit cycle, from 1987 to 1992, NYB made alot of money (was not a bull market for real estate), paid their dividend, increased their earnings, and many other "players" had left the scene (either wiped out or bought out).

      Granted, you are indicating that this downturn that we are presently in, is like no other, and that it is, and will continue to be, much worse than one can imagine. Therefore, you indicate that there is no business model for this, and that NYB will continue to suffer much, much more. In earnest, I don't really know, how much of a downturn any bank can withstand, in the scenario that you are describing. My analysis and thought process is, if NYB is predominantly lending money to property owners in rent stabilized and rent controlled apartment units (residential and mixed use) and these type of loans comprise, 90 percent of their business, and the loans are based on rent rolls and and not market value, and the rents that the tenants are paying are below the going market value, and if people start losing their homes because they can't afford their mortgage, they are going to be looking for apartments to rent - especially below the market rents - because they need a place to live, and the property owners who own the rent controlled and rent stabilized apartments are going to be the beneficiary of this demand. Therefore, while the market value of the units may have decreased, they (property owners) are still gettIng their monthly rental income and doing okay. I also realize that if people lose their jobs they have no money to buy houses or rent apartments, but I would think that past history as shown that below market rent controlled/stabilized apartments fare much better because people find a way to keep their units and don't want to lose them to someone else. Am I wrong on this assumption, based on your experience as a multifamily property owner?

    • My point is that their underwriting and collateral is thought by investors to be safe and secure. Obviously they made money during the bull market in real estate, that is not proof of the soundness of their underwriting. And they did not suffer in the last downturn, as it was mild. We may be about to experience a protracted, steep downturn in real estate values in new york city and their underwriting standards may be put to the test. My contention is that heavy losses will ensue. Their collateral - rent stabilized buildings, mixed use properties, and whatever assets underpin their construction loans - may be marked down, and substantially. What was thought to be conservative, may turn out not to be so conservative. Empty storefronts, lower rents, higher vacancy rates -- these may turn out to be a toxic stew for NYB. Yes, they turned down the TARP money, maybe they were drinking their own kool aid and believed their press. Bear Stearns said they were well capitalized on a wednesday and did not exist within a week. Same with Lehman. Merrill said the same thing. Citi and BofA made similar pronouncements. I shorted every one of these institutions. The people on the message boards hemmed and hawed all the way down. I made money, they lost money. I think that's all that matters at the end of the day.

      Obviously NYB management believes their business model and it's ability to withstand the downturn. The question is, should you?

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