CFC down 10% on missed earnings

[muzie_IHB]

<p>Finally...</p>

<p><a href="http://www.businessweek.com/ap/financialnews/D8QJDNI81.htm">http://www.businessweek.com/ap/financialnews/D8QJDNI81.htm</a></p>

<p>I've been holding puts on this for quite a while now and was 40% under until last month. The truth is finally coming out.</p>

 

[oc-conservative_IHB]

<p>Some absolutely astounding comments in their 3 hour earnings conference call:</p>

<p><em>- "no one saw the deterioration of real estate values coming."</em></p>

<p><em>- "Company is seeing home price depreciation at levels not seen since the Great Depression"</em></p>

<p>- Previously, the company had stated they expected a turnaround in mid-2008; now, they say they are not sure when housing declines will cease. Refuse to rule out house price declines in 2009;


</p>

<p>- Surprising comment regarding the <u>prime portfolio:</u> so far what they have seen in deliquencies is due to people losing job, losing health, lost marriage, more so than any resets. Stated that the <em>"definition of prime may not be as high as some people think."</em></p>

<p>- Expects to hear mergers and people going out of business in the near future;</p>

 

[oc-conservative_IHB]

I guess we can expect housing to bottom when all this mess hits the Time magazine cover, just as it did conversely in 2005 with its timely and prescient "Home $weet Home" cover.

 

[oc-conservative_IHB]

<p>I have absolutely no doubt on my mind that the Fed will step in within a year to lower short term rates again. The carnage in the housing market is one thing, as some people will say it is "isolated." But when it creeps into every sector of the economy, and the conference calls of all kinds of different companies start saying they are losing money and laying off workers because of the housing market, there is but one thing for Ben to do:</p>

<p>Fire up that money dropping helicopter...let's go for a ride!!!</p>