The Joys of the Mountains

Well, we had a nice strong wi-fi signal last night but I could not connect to the internet. Must have been a server down somewhere. I need to be brief as we are preparing for company, but I wanted to respond to a comment by Midnight. He/she notes some homebuilders will likely be going down in 2009 and can be expected to seek their own bailouts. Well, some already are going under or are already under, especially the small shops. The guy that built my house, for example, gave up and moved to Florida to do odd jobs. And those big ones still around are already asking the government to be included in the bailout. I do not have the link right now but I read about this happening just last week. So Midnight, you are dead on.

I suspect the relief will come more in the form of some homeowner related relief than direct support to home builders. They have already shed their employees so supporting them is not avoiding job losses. Moreover, we probably have too many home builders out there at the moment and shedding a few makes sense. From an investor perspective, figuring out those with the capital and credit to survive is key. Not that housing is going to come roaring back anytime soon, but if you are interested in that sector the key at the moment is avoiding those destined for bankruptcy.

Madoff Contagion

It seems Bernie Madoff is having repurcussions far and wide. From one reported suicide of someone who invested client funds with Madoff, to litigation flying left and right. I mentioned one fund-of-funds (FoF) last week, Fairfield Greenwich, that was likely to be sued. Well, it is being sued. Imagine that. Now NYU is in the game too, suing those that managed some of its money. And by "manage," NYU alleges they just handed it over to Madoff. Some "management?" Well, I suppose they earned a nice fee for this "management." It is nice to be middle man, at least until the crap hits the fan.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a.vf3pTm9hlQ&refer=home

Disclosures: None