The Eye of the Housing Storm

10/26/09 Gaithersburg, Maryland This chart shows you it isn’t over yet:

These helped frame where we are in the mortgage crisis, which has been the main shark in the water over the past couple of years. You should know where that shark is and whether or not it is hungry…

Clearly, it is not yet safe to get back in the water: Years 2010 and 2011 face big resets in so-called Alt-A and Option ARM loans. What this means is more write-downs and more losses for banks and others who hold these mortgages.

The bounce in home building stocks looks ridiculous in light of what they have to look forward to. The T2 duo actually recommended shorting the home building stocks through the iShares Dow Jones U.S. Home Construction ETF (ITB)… I like the idea of shorting homebuilders. At the very least, I wouldn’t buy one.

Chris Mayer

Chris Mayer studied finance at the University of Maryland, graduating magna cum laude. He went on to earn his MBA while embarking on a decade-long career in corporate banking. Chris is the editor of Capital and Crisis and Mayer’s Special Situations , a monthly report that unearths unique and unconventional opportunities in smaller-cap stocks. In 2008, Chris authored Invest Like a Dealmaker: Secrets From a Former Banking Insider .

SPECIAL REPORT – The Endless PAYCHECK PORTFOLIO : In three simple steps, unleash a steady flow of work-free income… starting with up to 75 automatic “paychecks” deposited directly into your account.

View articles by Chris Mayer

Related Articles:

• December 17, 2009 -- The Second Wave is Already Ashore
• November 5, 2009 -- The Housing Bust – The Final Chapter
• October 15, 2009 -- The New Housing Crisis
• May 26, 2009 -- The Second Wave of the Housing Crisis
• April 28, 2009 -- Economic BBQ on the Credit Default Spit

 Print This Post