All Forum Posts by: Account Closed

The longer it takes Congress to act, the better the final results for the economy. A lot will get sorted out in the next few days. The one thing that must be dealt with immediately is lending between banks, right now it just is not happening at all because no one has an understanding of how to evaluate the risks.

The Treasury Secretary and the Fed Chairman have all the tools they need to solve that problem. Solving that will allow the rest of the market to work out the kinks.

We will still get a bailout later this week but it will be worse than the one defeated today.

If you have the nerves for it and are in for a little short term trading, financial ETFs are great ones to watch while the rest of this sorts itself out.

Dow Down 777 points at the close.

There was a lot of across the board panic selling today. Lots of money flowing into treasuries.

Short term, the financial ETFs are the play.

Long term, it is time to value shop for stable companies with great balance sheets and assets that aren't subject to the whims of a fickle market.

We are so close to the capitulation point and while we will probably bounce around the bottom for a while, the longer it takes Congress to act, the better it will be for the economy.

I suspect much will be sorted out in the markets around the world tonight and tomorrow.

The democrat leaders are at the podium right now and the more they talk the more the market drops.

The big "reaction" will come in the last 15 minutes of the trading day.

Right now, one of the biggest concerns among traders is the drop won't be big enough to force the house to revisit this on Wednesday.

If the market closes less than 600 or so points DOWN the fear is people will look around and say, "Hey, maybe this thing isn't needed after all."

Oh, it will be back. This is a zombie that will not die because it is a massive power grab.

I don't know that it will sky rocket but the cost of borrowing is going up. That makes a short sale more valuable to a lender. That will drive the requirement for short closings.

It will...

But I hope it doesn't.

On short sales so far the signals are this will increase the interest from lenders in short sales. However, they are going to be very stringent on making sure funding is available as advertised by the buyer.

This morning one lender notified a Field Guide member they will require the funds needed to close a short sale be deposited with them within 24 hours of the deal being negotiated. They are also demanding there be absolutely no contingencies or escape clauses of any kind. If the paperwork is submitted and the lender accepts, the deal is done and the buyer must close. The closing periods on short sales are going to be very short in the very near future. You better make sure you do your due diligence before the deal is signed. Soon I expect even submitting a short sale package will require a check for the full amount to be held until the lender accepts the offer.

This is great news for those with good sources of ready funds that don't require any kind of approval in order to use them.

If the bailout is approved in the next couple of days and signed by the President as promised this week. I expect to be getting BACK into short sales about early November.

If you just walk away the lender will seed a deficiency judgment. You already know the hit your credit will take and as David said be prepared for a forensic audit of your loan application and supporting documentation. If they request anything to "clarify" anything, I would let my attorney handle the details.