What The Economy and Housing Don't Need

There have been two pieces of news this week that are very negative for housing and by extension the economy. The first is that the FHA wants to tighten its lending standards. The marginal loan these days is made by the FHA, not by subprime lenders. This move would crowd out the marginal buyer.

The other negative is the move higher in rates today. If the economy were really getting better that might offset part of the rate effect, but I believe all that changed today is perception.


Anonymous said...

For a longer term play I would offer...SWHC They had good earnings yesterday but "soft" guidance. The stock is getting hammered today. My play would be to let it come down a little more( til the end of the year) then scoop it up and hold it until just before May. For a 30-40% profit! ARM YOURSELVES!!!

Tsachy Mishal said...

Looks interesting. I will do some research over the weekend. That type of stock is more up my alley because they have moderate leverage and positive earnings. Do you know what the bear case is?

Anonymous said...

Chart is broken dawg.

Ol dawg says avoid.