Wednesday, August 4, 2010

Some rare links

I do not do links often – so they have to be good.  These two are gems and I am (a) sick in bed and (b) working on a very long post on a new topic which may not be posted as I am not sure I understand it…

The first link is to Jim the Realtor who has been doing some down-in-the-weeds looking at shadow inventory in San Diego.  His conclusion is non-consensus – the problem is massively overstated:

More on shadow inventory

His observation accords with the conference calls of many banks.  Southern California is – if you believe the bank spin – and you now have reason to – better than most commentators think.

Florida remains worse – possibly much worse.  (Alas I have a small bet on a regional bank in Florida that is not quite working out…)

The response to Jim the Realtor is to argue that the true “shadow inventory” is in property not yet foreclosed on.  Alas in Southern California it seems the delinquent inventory is falling too.  (Again Florida looks worse…)

The second link is a detailed reading of the Valukas report into Lehman’s failure.  The “Economics of Contempt blog” (which I should put on my blog-roll) goes through the ways in which Lehman faked its liquidity.  [I was short Lehman at various times and it never even occurred to me that they were faking their cash balance…]  This does not go to the core issue of solvency – but it does speak to the culture (and possibly to criminality).

Economics of Contempt on Lehman liquidity.

Happy reading…



1 comment:

Ted K said...

I am a fan of yours Mr. Hempton, and have you on my blogroll (which I TRY to minimize to 10 links total), I especially enjoy your detailed analysis of balance sheets and your exposure of Repo 105 and Repo 108 transactions. That is why, as you say in your regional Florida bank comment "alas" I cannot figure out your nonsensical investment in banks.

I would also like to say as a proud card-carrying member of the sexist pigs club, Meredith Whitney is one of the few females I respect on finance matters. Did you know she is now telling people to avoid banks and financial institutions like the plague????

In my best pretend British snob accent I want to tell you "Come to your senses man!!"

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