Saturday Morning Rock Comentary courtesy of Pulp Fiction and Lynyrd Skynyrd. Something sure stinks when the Fed unamimously votes 50bps, the stock market looks out 6 months and sees all time highs, the CRE market is following the residential market in double quick time. All is good. Stay calm. My only guess it that bonuses are computed at the end og the 3rd quarter in 10 days which could make for some very unhappy investors in December.
7 comments:
Letme be the FIRST to agree with you,
and no telling what they will pull out of their MURSE/T next! Bend Over Ben has already said he will cut rates again.
Good guess, Dawg. I agree with your theory.
I am seeing some CRE equities right now that look like better shorts than even HB's.
The CREs are priced beyond perfection. Obviously they'll take a hit to their asset value but inflation is going to eat their margins and they are going to loose all their pricing power at a time when property taxes are likely to go up substantially. Over on CR this morning I mentioned FIG a $1.96b capitalized hedge fund. They have $900m of that in a single loan to a single real estate investor who has it all in NYC CRE. Nov puts are dirt cheap only 10% out of the money.
I don't see that FIG has a Nov options chain.
Yeah, dumb mistake on my part Dec 17.50s.
I have a second theory. I think the Fed has got an unrealistic opinion of its' own influence. Bernanke has already admitted that he is more concerned with the perception of inflation and inflation expectations than actual inflation itself. The 50bp drop was intended to change the perception and expectation at the expense of actual inflation.
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