What Now?

shhhh don't tell that to the media.

I for one, am awaiting further instructions from mmafia after he's done covering his shorts.

I think MMafia will turn bullish once the newspapers become bullish.

anybody out there still think its going to carry on going up?

Either:

1. Shit is real bad beneath the scenes that the fed unanimously voted for aggressive action to EASE THE PAIN when it finally hits

OR

2. The fed is still wall street's bitch!

I don't recall when in past history, with stock indexes 4% from record highs, oil and other commodities at such high levels + such a weak US dollar the fed took such an aggressive action. I worry its #1 that is the case here and the fed decided that preventative measures to cushion the ultimate economic blow far exceeds inflation and moral hazard concerns

It's gonna be shaky for a while. Mortgages will be harder to get, presenting a significant damper on buyer side demand.

But sellers are sticking it out. They won't sell unless they can do well. Effect is that inventory in my neighbourhood (Nolita and Soho) is terribly low.

I think it will just be shaky for a bit, and then then economy-willing, the trend upward will continue. There's just too many people waiting and willing to buy for anything else to happen. Though now is probably a good time to be a buyer if you can find yourself a "motivated" seller.

Psychology has shifted, just b/c the fed cut rates doesn't mean prices are going to go up....buyers aren't going to rush into the market b/c things are already at maximum affordibility levels. 25,000 new condos are being released this year alone and a lot of the demand has already been absorbed. If you're a potential buyer there is no reason to rush into the market now. I think we'll continue to see a downward trend in NYC RE prices.

Fed impact:

1. Weak dollar: helps NYC real estate in near term
2. Stronger Wall Street earnings/comfort levels/stock prices - bonuses may still be down this year and next, but layoffs could be lighter than expected and if broker stocks go up, so does bankers' wealth effect: helps NYC real estate in near term
3. Lower interest rates: helps NYC real estate in near term.

I don't see how the Fed's move has anything but an inflationary effect on NY real estate. UNLESS, (1) mortgage lending and rates remain independent of the fed funds and stay high, reflecting the higher cost of credit risk rather than the fed's moves, (2) the dollar doesn't plummet as much as expected or (3) as urbandigs said, sh*t is real bad behind the scenes (this will take longer, 12-24 months, to affect NY real estate).

As someone at another bank said to me today: "Well, it's 3am and just when we thought the party was over, someone found another bottle of scotch." Let's see how we feel in the morning.

I am looking to buy some more now that rates are getting more attractive. Give me lower monthly costs and I'm good to go

Fed rate cut will have squat effect on mortgage and housing because its simply too late. the risk premium associated with large mortgages (which in NY metro are average mortgages or below average mortgages) is here for the short term and mortgage rates should behave accordingly. the stock market is another story. we'll see on both points of course.

BTW although (sh*t behind the scene may appear bad I think the Dow will be hitting an all time high by years end. Oh no does that spell less money for our friends working at wall street. Gee I'm confused.

spunky, you are a bit confused. A little simplistic to say "Big Dow, Big Bonus!". Because the Dow goes up doesn't mean that investment banks will dole out mega-bonuses. Generally, an upbeat Dow correlates with high M&A and capital markets activity, high fees, and high brokerage earnings. Not this year. Banks are sitting on major write-downs and business has slowed to a crawl in LBO land. If the credit faucets suddenly get turned back on, which the Fed may or may not have helped today, only then will banks begin to offload their leveraged loans (probably at a loss). And only when that backlog is cleared up and the credit markets have digested it will LBOs return to the fray in the same manner as the past several years.

It helps that the Dow is up, but it's a little naive to look at the level of the Dow and say "big bonuses!!" Bonuses are as much a function of investment banking backlog (low) and hiring environment at the time (poor) as past earnings (good). That said, it will help hedge funds make money for sure.

yournamehere-Thanks for the explanation

Not sure if I like the Morgan Stanley outlook for the continuation of credit problems. Time will tell.

Anon3, what do you mean "continue to see a downward trend" in NYC RE prices? Prices are not down.

he means "crap I have to cover my shorts before I get margin called. Better throw out another quick hater post for luck."

I would be very surprised if MMafia too wasn't highly leveraged in shorting stocks. Pseudonomyous also indicated his firm was short the S and P as well. Hope he's okay but MMafia I hoped he gets squeezed like a tube of Chinese tooth paste from both ends.

Spunky...I apologize, but what planet are you from ?....actually nevermind, as long as people of similar mentality maintain their stance, I make money...

Oberon--Gee I don't know what planet I'm on but as long as your making money shorting the S and P good for you. I do appreciate your kind words and very thoughtful insight.Oberon, may I also add that I do appreciate and admire your deep and thorough elaboration on how you are making boatloads of money. Particularly, form people of different planets.Bravo

you're welcome Spunky

No your welcomed Oberon and by the way I forgot to ask what spaceship did you just come off on --oh never mind

http://curbed.com/uploads/2007_9_19_3centsworth.jpg

Just wanted to say "hi" - it's been a busy couple of days. All's quite well on our end, thanks to that nice 50bps called the 'Bernake Put.'

mcfm85a, an interesting chart from curbed thanks for posting. Would be much more interesting with a 5yr trend. There are many variables that cause lower inventory in NYC, 18 months doesn't tell us much. Further, I feel the inventory gap between NYC and other areas of the country has little do with exchange rates and more to do with over committed buyers dumping properties in areas that were never valuable to begin with.

"you're welcome Spunky"

LOL!

Hey MMAfia glad you had time to cover all your shorts. Not that your at a negative net worth what are you now predicting.

"No your welcomed Oberon and by the way I forgot to ask what spaceship did you just come off on --oh never mind"

What a wack comeback... I find it interesting how you think I am 'short' anything and that I have to 'cover' my positions. Better yet, that I am at a 'negative net worth'.

You couldn't be further from the truth. As you know, I've said that I wouldn't be surprised if the DOW went back up and hit 15,000, to which you predictably made some lame comment about. I wouldn't be short the indexes if I thought that they could very well go to 15,000, and guess what? I'm not.

In fact, I play long positions, particularly in Gold and Energy.

As Marc Faber says, "Americans, your dollar is worth less and less everyday. Your dollars in your savings accounts will be worth less and less every day." And guess what? He's absolutely correct.

In other words, the Fed lowered rates, and lowered it more than expected. Clearly, they knew that would cause the Dollar to tank. Now why on earth would they want to risk the Dollar tanking- something that Volker had to deal with by eventually raising rates to 12%?

That's right- because there's an EVEN GREATER evil lurking in the US economy that has them so scared, they're willing to risk a tanking dollar (which has now fallen below the all-critical support of 80).

I like how your post focus has shifted now to inflation, economics rather then real estate.

Our dollar might be less more every day, but we'll be making more dollars as well. If we have more dollars then that means real estate is going up too along with rents.

Care to link any more articles from *POOR* reporters earning a fraction of what you or I make?

i"n fact, I play long positions, particularly in Gold and Energy." MMafia

Now that's not usual being long oil and energy and for the past several months you've been also short the dollar and long on Canadian dollar. Long on the Euro as well. Oh did I forget you must also be short on all the housing stocks as well and the mortgage companies just like countrywide and American Home Lenders. Right before they went down And yes also for the the past several months you've been short the brokerage stocks as well. You also play for the Yankees and won an Olympic gold metal.
I do admire that for a 40 yr old still living in your parents basement you have been such an astute investor. You are also full of Sh***t but then again I don't need to tell you that.

aifamm, not to jump between you and MMAfia, but I could link quite a few opinion pieces from reputable traders/investors/economists that would reiterate on the same points you seem to refute coming from "POOR" reporters...

Oberon, Anon3 and MMAfia are all the same individual( living in moms basement ) just using different screen names. It is so obvious. MMAfia writes a post than Oberon or anon3 agrees with him and each other. Quite humorous if you think about it.

spunky, quite humorous is to imagine that someone would go the lengths of creating different usernames and talk to him/herself on the same forum just to prove to him/herself their own conviction? it is fun however to see you go at it everytime some rattles your cage on this board...

Wouldn't it be fun if spunky and MMAfia were the same person? Living in your parent’s basement arguing with yourself.......hmmmm, could be on to something here....

JuiceMan, be carefull here ..or he will assume that you and I are the same person and I'm no longer with MMAfia camp...

Looks like the Oberon personality was a bit offended with his split MMAfia personality. It's okay Oberon or should I say MMAfia, mommy will soon be coming down to the basement with your your cookies and nice warm milk.

Spunky - you need to get with the program and realize that the tide has turned. Most of us think RE is a bad investment right now. Perhaps everyone who writes anything positive about Manhattan RE is actually spunky under a different name?

This whole thread is just a bit too....well, either weird or funny, depending on your pov, I suppose...

spunky = best entertainment! takes the bait each and every single time.