Thursday, January 31, 2008

Asset Backed Securities: New Menu Item (and of course, other stuff)

all text & images © Arnold Lieberman except where noted

Dakini Bone Skirt Fragment w/ Citipati Motif
Circa 17th century
Carved bone

In my quest to expose you to interesting artwork, I want you know that by clicking on each image, you will go directly to the site. I'm also including the copyright information which I neglected to include before.

The image for today is relevant. It is meant to express danger. We've had what I consider a virulent rally in many oversold sectors such as homebuilders and banks. I have no idea what the gap is between reality and price, but the question at hand is, "Are we over the hump?"

I recognize that I have no insight as to whether or not banks and homebuilders are fairly valued. I do know this--you can spin a story to equate to every market move--whether it is in a stock or in the market. I do know this too--both homebuilders and financials were two of the most heavily shorted sectors. GaryK in yesterday's show noted that homebuilders and financials tend to be the bear market counter-trend leaders in a bear market.

No doubt that you've recognized from media content, should you listen or read, that there's a split between the camps that think that this is unprecedented buying opportunity v. we are going lower. I've still not met a soul who has a clear crystal ball, but I'm not beholden to any but me for performance..

I wanted to alert you to an update to the "Info Mosaic" menu. As you know, CDO's which I tackled here in March of 2007, are very much in the forefront. If you click on the last menue item, you will see some terrific graphics on the asset backed securities front. I don't remember that this information was available at the time of that work.

It is telling to see the volume drop offs. Remember, the investment banks made a fortune off of this stuff in the past year.

No comments: