Delinquencies Still Rising ~ market folly

Sunday, August 31, 2008

Delinquencies Still Rising

(click to enlarge)

I'll let the picture do the talking here. Taken from 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


Mark said...

I was watching the COF, DFS last week and sadly DFS is actually breaking out. Wonders never cease