Calculated Risk, we see continued rising delinquencies across the board in Residential Real Estate, Commercial Real Estate, and Consumer Credit cards.
How to play it:
- Short Commercial Real Estate (short CBG, short GGP, long SRS)
- Short Credit Card Companies (short COF, short DFS)
- Short banks with lots of leverage, lots of derivative exposure, and lots of residential/commercial real estate exposure (short HBC, WM)
One caveat with all those picks: You've got to monitor your positions like a hawk. The slightest bit of positive news can send these things skyrocketing due to short covering. Use stops, use your brain, and be swift.
Full disclosure: At the time of publication, MarketFolly was short COF, CBG, WM, GGP, HBC via puts