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floridabuilder2 (99.59)

Builder Alert - Centex CTX earnings report... the party is over... our first incident

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January 29, 2008 – Comments (47)

Well..... you knew the party could only last for so long... there was Bill Pulte guzzling down some Scotch and Ara Hovnanian drinking a double martini... when all of a sudden Tim Eller of Centex Homes had to go and puke all over the carpet....  Tim... we were just starting to have a good time...

As I stated a few blog posts back, 1) Dec Jan sales brutal per contacts.... 2) Dec ending was the last hurrah and then things would get real ugly....

Guess what?  For Centex December wasn't even a good quarter!!!!  This was the last hurrah quarter... it only gets a lot worse from here

So lets examine the financials

Negative operating earnings before... I repeat before impairments...  I have warned you that this is when it gets real ugly people... when you can't even generate cash from operations.... 12.5% gross margin before impairments and 14.1% SG&A... that is bad!!!!!!  Now Lennar had negative operating earnings too but their stock went up... why?

Cash...that is why..... Centex has 51 cents a share of cash and KB Homes has $17 dollars???? and Lennar has $4 dollars a share of cash... a I missing something... this is what happens when you get drunk at your friends and puke on the carpet... you get rolled and your wallet goes missing.. with all that cash.....  We are talking unrestricted cash, not homeowner deposits cash....

What other surprises has Tim left??? oh what is this?  A crap in the hall closet.... that's it... no more Tim Eller at my parties.....  87,000 owned lots still!!!! more than any other builder has reported...  now you know why Centex is fire selling the crap out of homes for 12.5% gross margins... because owned lots are dead money....  here is a little hint... the analyst are focused on no more write offs... right???? they say write-offs are done... all gone... goodbye.. happy days... yoo hoo!!!!

Yet you have written off all your land and you can only generate 12.5% of gross margin... after you have written off all your land....  chew on that for a while...

Oh... lets get back to SG&A... remember the Dec ending quarter is your biggest quarter as far as closings are concerned by far.....  so over the next 3 quarters your closings will be less... what does that mean???  It means less closings / revenues for your SG&A to be spread over... thus your % of SG&A is going to balloon... fire more people???  sure go ahead, but at what point are you running a skeleton crew???

Backlog was decent compared to the other builders, but closings were weak based on CTX's size... yet cancellations were low compared to the other builders????  This probably makes no sense to you.... but these are confusing numbers if you are in the business.... oh wait... YOY sales are down 10%, and the other builders that have reported are down much more YOY...  This is because CTX is going to fire sale the crap out of homes to get through there lot inventory... per this last quarter CTX is selling more units per community than any other builder... why???  look at their cash....  they are trying to generate as much cash as possible by converting inventory to sales.... so why aren't they generating cash?????  because they are running negative operating margins...... and all their cash is going back into SG&A... plus negative cashflow from the spread....

Here is the best part...  the more sales, the more starts, the more WIP, the more demand on cash... all for nothing, because your selling homes at a loss....

2008 the builders get cut throat... you think you are seeing slash and burn tactics now.. just wait... there are more negative operating earnings coming as I stated this week... and you better have more than 50 cents a share of cash....

By the way Meritage Homes earnings report sucked too....  They are lucky they are in Texas with 50% of their sales... because based on the 200 or so feasibilities I have done, Texas is about the only good market...

47 Comments – Post Your Own

#1) On January 29, 2008 at 7:01 PM, jesusfreakinco (30.18) wrote:

FB,

 With all you know, you have to have a high level of confidence in shorting SOME HBs.  CTX, for instance, traded at $29 today (past tense) and now has a book value of $26/share.  With your observations above, wouldn't you say some HBs (not to mention names) are overvalued?  What about RYL trading at $32 w/ a BV of $27.  Come on, dude, throw us a bone...

CTX should be trading in single digits tomorrow if this market wasn't so manipulated.

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#2) On January 29, 2008 at 7:12 PM, toshimelonhead (29.16) wrote:

FB,

What's your take on the builders if the Fud cuts 25? 50?

 

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#3) On January 29, 2008 at 7:18 PM, joelbow7 (< 20) wrote:

Of course there is manipulation!  Everyone is expecting a bailout of some kind but until the market realizes that everyone is NOT going to be saved the Pollyanna rally will continue.  I think the end has to be near for some of these companies though.

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#4) On January 29, 2008 at 7:24 PM, kdakota630 (99.96) wrote:

I'm pretty new to CAPS, racked up a 97.90 rating in about 6 weeks, and then lost about 1,800 points in a week and a half, mostly on the same underperforms as you and a number of other top players, who have all lost quite a few points in the last little while.

However, I've only been reading your blogs in for the past few days, and despite my woefully poor rating, your blogs have left me confident in my picks and that my score and rating will be skyrocketing in the next few weeks.

Just wanted to say thanks for all your valuable insight. 

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#5) On January 29, 2008 at 7:39 PM, cabuilderboy (50.33) wrote:

Let's see, at 12/31:

$62M in cash+$2.2B in backlog (before cancellations and repricing)+negative operating margin+15% SG&A+ horrible mortgage business being subsidized by homebuilding incentives+declining sales+$4B in debt and 56% debt/cap (before 2008 fire sales) = stock shrinkage!!

We will see what the markets say..................

$62M in cash is a scary proposition going into 2008, especially since they burned through about $800M since March!!

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#6) On January 29, 2008 at 7:52 PM, saunafool (96.64) wrote:

Look man, I'm drunk, but my name is not Tim and I am not crapping in the hall closet.

Of course Centex is going to be like this. I looked at CTX a couple years ago and thought, "this is why P/E means nothing. These guys have debt far in excess of cash on hand."

Now, it is all of these lots that aren't going to sell.

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#7) On January 29, 2008 at 8:17 PM, d1david (99.86) wrote:

definately a very funny post- nice job fb

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#8) On January 29, 2008 at 8:59 PM, bendlund (99.84) wrote:

based on the recent performance of homebuilder stocks, these earnings are a sure recipe to blow past $30 tomorrow.

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#9) On January 29, 2008 at 9:09 PM, floridabuilder2 (99.59) wrote:

jesus.... if CTX is trading in single digits tomorrow, that will be a bigger miracle than when you parted the red sea....

toshime... who knows, but the experts are predicting a sell off

joel... the end isn't near for most of the publics... i can't see another public going bust until late summer at earliest

dakota... don't follow the leaders too much, they made their points over the last year... don't be the last one to the party... there may be one big ride down, but look for new opportunities as they arrive.. such as when a lot of top players moved heavy into gold in sept 07

cabuilder... now now... don't dip into that restricted deposit cash...  A company the size of CTX should have way more cash than this after the dec quarter

saunafool...  CTX is closest to proving me wrong... that is a top 5 builder goes under... so far they are the only one that is even remotely close

d1david.. not informative though?

bendlund.... yes back up the truck with those $30 call options...  CTX sucked, YHOO sucked and now its Ben's turn

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#10) On January 29, 2008 at 9:54 PM, kurtkalamar (< 20) wrote:

I'm watching DHI, which I shorted a small amount at $16.  At the end of September they had about $.70 per share in cash. Should be interesting to see what they report on the 7th... or if it will even matter by then... since, you know... the party will already be over.

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#11) On January 29, 2008 at 10:08 PM, camistocks (85.32) wrote:

Floridabuilder, didn't you know that those fire sales are their contribution to the US stimulus plan? Check out what Walmart just released today... ;-)

Wal-Mart Announces Economic Stimulus Plan for U.S. Shoppers
Tuesday January 29, 7:57 am ET
Retailer Rolls Back Prices 10 to 30 Percent This Week on Thousands of Items for the Game, Health and Home

BENTONVILLE, Ark., Jan. 29 /PRNewswire-FirstCall/ -- As the U.S. government finalizes its economic stimulus plan, Wal-Mart, which already saves American families $2,500 a year*, is adding some economic cheer of its own. Full details are in its latest home circular where customers will find Wal-Mart has rolled back prices on thousands of items -- giving them 10 to 30-percent savings right now.

"We all know economic times are tough so our plan is to help with added savings throughout the year, focusing especially on what people want, when they need it," said John Fleming, chief merchandising officer, Wal-Mart. "Shoppers are depending on us to deliver the best price so they can stick to their plans, no matter what the economy throws at us. We won't let them down."

more: http://biz.yahoo.com/prnews/080129/latu055.html?.v=101 

How generous, and i'm sure they did not think of themselves here at all... 

Personally I expected CTX to have terrible results in this quarter, as all HB will. I think if the Fed lowers rates tomorrow another 0.5% this could stimulate the housing and mortgage market again by spring. However you should always buy stocks 6 months ahead of fundamental improvements. Because by then the stock should already be up 50-100% from the lows. Well, maybe not...

Very informative, useful and amusing analysis! 

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#12) On January 29, 2008 at 10:38 PM, DemonDoug (99.81) wrote:

Hey florida, another good blog, no questions need to be asked, just want to say that tousa has declared bk and you along with 4 others made the correct prediction, check out my blog for the congratulations.

also, PHM reports tomorrow... I don't get home until late on wednesday, but I'm pretty damn excited to see what's going to happen with the.  Tomorrow we find out! :)

"BY THE NUMBERS: Analysts, on average, expect the company to report a loss of 50 cents per share, according to Thomson Financial. The estimates range from a loss of $2.10 per share to a profit of 14 cents per share.

The reason for the wide range is some estimates include expected charges while other do not."

 

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#13) On January 29, 2008 at 11:10 PM, kurtkalamar (< 20) wrote:

I'm watching DHI, which I shorted a small amount at $16.  At the end of September they had about $.70 per share in cash. Should be interesting to see what they report on the 7th... or if it will even matter by then... since, you know... the party will already be over.

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#14) On January 29, 2008 at 11:15 PM, wolfhounds (24.25) wrote:

My fellow Fools, lets not forget about inviting HOV to the party. For those of you not living in the NY metro area, HOV is advertising a newly completed luxury condo high rise in JERSEY CITY, across the river from Manhattan as "just like living in Manhattan". With an asking price of $2.75mm for the top floor it better be. Alas, Wall St is laying off thousands of would be buyers, and everyone else is moving to Brooklyn which is part of NYC. Of course, the best part is that years ago the old man who started the company stook to his roots. Now, the largest developments are in the 4 worst states. I predicted in my CAPS months ago that HOV could be the first to go under. Anyone have a favorite.

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#15) On January 30, 2008 at 12:26 AM, collinmcb2 (95.24) wrote:

Another extremely helpful post.  I'm sorry to bother you with such petty questions, but I am new to investing in ETFs (and the market in general, I'm only 18).  I am interested in buying the ultrashort real estate SRS or ultrashort financials SKF.  Is there a fee for buying these securities in the secondary market?  Are there many other fees involved with the investment because I don't have a lot of money to spend on fees?  And finally, you seem to know the market during these times better than anyone else.  Do you think that this would be a good investment for the next couple of months?  Thanks a bunch.

Collin 

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#16) On January 30, 2008 at 12:48 AM, dwot (99.98) wrote:

Yet another excellent post...

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#17) On January 30, 2008 at 6:46 AM, davegras (< 20) wrote:

Hi FB,

Thank you for the great post.

You mentioned that LEN stock went up after their report due, at least in part, to their $4/share in cash.  I noticed in their report that they received a tax refund of $852 million after the quarter.  If I'm doing the math correctly, that would be put them closer to $9.50/share in cash, no?  If correct, they basically went from a dollar to almost ten dollars per share in cash.  Does that jive with your numbers?  Do you still consider LEN's balance sheet to be weak? 

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#18) On January 30, 2008 at 7:04 AM, davegras (< 20) wrote:

Hi FB,

Thank you for the great post.

You mentioned that LEN stock went up after their report due, at least in part, to their $4/share in cash.  I noticed in their report that they received a tax refund of $852 million after the quarter.  If I'm doing the math correctly, that would be put them closer to $9.50/share in cash, no?  If correct, they basically went from a dollar to almost ten dollars per share in cash.  Does that jive with your numbers?  Do you still consider LEN's balance sheet to be weak? 

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#19) On January 30, 2008 at 7:32 AM, davegras (< 20) wrote:

Hi FB,

Thank you for the great post.

You mentioned that LEN stock went up after their report due, at least in part, to their $4/share in cash.  I noticed in their report that they received a tax refund of $852 million after the quarter.  If I'm doing the math correctly, that would be put them closer to $9.50/share in cash, no?  If correct, they basically went from a dollar to almost ten dollars per share in cash.  Does that jive with your numbers?  Do you still consider LEN's balance sheet to be weak? 

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#20) On January 30, 2008 at 7:49 AM, loriyacht (< 20) wrote:

floridabuilder and demondoug:  what was the bet??

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#21) On January 30, 2008 at 10:06 AM, floridabuilder2 (99.59) wrote:

kurt... based on CTX's opening this am... the worst performer of all the builders.. do you think I know how to value them now??  LMAO.....  cash baby.... CTX's numbers were bad!!!! this is why I said once everyone starts reporting Q1 numbers, it is going to get ugly

cami... maximum pain for the homebuilder stocks should be spring or summer... at that point i will perma green thumb the best balance sheets.... hopefully with reducing my pick counts on caps, i will be able to manage my red and green thumbs better and not get caught with my pants down on some of these builders where i have huge negative points

demon... my boy at PHM said he thinks they got $1billion in cash... i will personally kick his a$$ if they miss

wolf... HOV came to the party too early back in their december report when the market tanked... the nice thing is that HOV is always the lead off hitter in builder earnings reports.. they will lead off the next round.. and you always want them leading off if you hate builders

collin... boy 18 and investing... impressed... stay away from the ultrashorts unless you have risk money... these are very risky vehicles... because they multiply by two the change in the underlying index they track... i believe the fees are subtracted from the stock price since i have never seen any fees roll through my account

dwot thanks

davegras... stop drinking energy drinks... the multiple posts hurt the eyes...... I wouldn't think Lennar's balance sheet would be weak at $4 a share.. so with the tax refund it gets better... my main concern is the balance sheets with less than $1 a share or cash positions below $50 million for a company with several billion in debt and negative operating cashflows... the math doesn't work there unless this is a shallow recession or no recession

loriyacht... loser has to post congrats to the winner... but my contact at PHM better not screw me on this, because I have been bragging pre report out for some while now

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#22) On January 30, 2008 at 10:10 AM, davegras (< 20) wrote:

Thanks FB.  Sorry about the multiple posts.  I don't know what the heck I did for that to happen.

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#23) On January 30, 2008 at 10:34 AM, floridabuilder2 (99.59) wrote:

davegras... you refreshed your screen.... it is a flaw with the site...

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#24) On January 30, 2008 at 10:39 AM, GS751 (28.74) wrote:

I was talking to an ex muni guy this morning and we were discussing what if Bernake only cut 25 bp (I doubt it) and suprised the market.....

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#25) On January 30, 2008 at 10:47 AM, loriyacht (< 20) wrote:

floridabuilder and demondoug:  help..  I swear I will never short another stock again!  I've learned my lesson - next time I want to do it, I'll just go buy a dozen pairs of Ferragamos instead!  But, I am short PHM and if they really report $1billion in cash - well, that's got to kill me off finally..  what would you do this morning?

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#26) On January 30, 2008 at 10:51 AM, floridabuilder2 (99.59) wrote:

lori.. what was your entry price... i have a hard time believing the market pops on bernake... history usually shows that the rate cut has been priced in already and builders have run a ton.... phm is at 14.16... so again what was your short in....  by the way, I am wearing Ferragamos right now!

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#27) On January 30, 2008 at 10:51 AM, loriyacht (< 20) wrote:

floridabuilder and demondoug:  help..  I swear I will never short another stock again!  I've learned my lesson - next time I want to do it, I'll just go buy a dozen pairs of Ferragamos instead!  But, I am short PHM and if they really report $1billion in cash - well, that's got to kill me off finally..  what would you do this morning?

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#28) On January 30, 2008 at 10:55 AM, loriyacht (< 20) wrote:

floridabuilder and demondoug:  help..  I swear I will never short another stock again!  I've learned my lesson - next time I want to do it, I'll just go buy a dozen pairs of Ferragamos instead!  But, I am short PHM and if they really report $1billion in cash - well, that's got to kill me off finally..  what would you do this morning?

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#29) On January 30, 2008 at 11:00 AM, davegras (< 20) wrote:

I think loriyacht and I learned two lessons today..one about shorting and the other about refreshing the screen (I hope).

FB:  If I recall, a couple of days ago you advised getting out the homebuilders, at least for the time being.  Does that mean all of them still, or are you now focusing just on those with the weakest balance sheets?

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#30) On January 30, 2008 at 11:10 AM, floridabuilder2 (99.59) wrote:

lori.... the confirmation I had on the 1 billion mark was in mid january and I never went back to reconfirm....  getting to 1billion in cash required 375m in land sales..... however, this morning I talked to someone who said that they were supposed to close a 500m land sale with a private equity firm in december, but the firm backed off... having a 500m deal fall through is not chump change... if this is true then PHM will miss their mark big time....  Dugas stated that they could get to 1 billion and I did the math and they could.... however, this new revelation would be a significant blow... especially since the deal was tied up in a bow and ready to go... the PE firm wanted more before they would close....  I am trying to get confirmation from both my original source and secondary source....

davegras............ all homebuilders.... wait until a major market sell off and some bad earnings reports for Q1 then buy someone with a strong balance sheet or buy a heavily shorted stock for a quick turn....  I wouldn't buy any builder here at these prices... these are yearly high prices for 1/2 of them

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#31) On January 30, 2008 at 11:21 AM, davegras (< 20) wrote:

Got it.  Thanks again!

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#32) On January 30, 2008 at 11:23 AM, floridabuilder2 (99.59) wrote:

loriyacht.... i will email you

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#33) On January 30, 2008 at 11:48 AM, loriyacht (< 20) wrote:

floridabuilder and demondoug:  help..  I swear I will never short another stock again!  I've learned my lesson - next time I want to do it, I'll just go buy a dozen pairs of Ferragamos instead!  But, I am short PHM and if they really report $1billion in cash - well, that's got to kill me off finally..  what would you do this morning?

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#34) On January 30, 2008 at 12:00 PM, bellard (96.31) wrote:

FB;

Yeh, CTX puked up a big fat hair ball! Also the general tone of the report was very depressing. My first instinct is to buy 20-30 put contracts on CTX - but I will not...The market seems to like CTX and I am not going to fight the market right now, with govt bailouts coming. CTX should be trading below 20 imho...

I have been trying to figure out the effect of the GSE conforming limit being raised to 700K in CA. I predict a large refi boom saving homeowners 400-700 bucks a month. Also the rate of Jumbo's are up to 200 basis points above mkt rates. With this GSE change I also predict a sizable increase in new home sales and a stabization of prices in CA over the next 9 month. What are your thoughts on the new GSE limit, and the effect for CA?

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#35) On January 30, 2008 at 12:15 PM, floridabuilder2 (99.59) wrote:

bellard... the govt actions you speak of put a valuation floor on builders stocks... what does that mean?  it means that the perceived risk by the market is less... thus, the reason why i have stated we would have a double bottom and some builder stocks may never get to this January's lows.... perception is sometimes stronger than reality

the govt bailout on GSE helps thos with exposure to Cali... but it is temporary.... as you suggest... i would expect more refinance activity vs. a lot of people buying homes... it still comes down to the loans must be conforming and there are not a lot of people out there that can put down the $ for a conforming loan plus have a nice FICO score...

when the bad earnings reports start coming out in march april for those with year ends prior to 12/07... the $hit is going to hit the fan... that is when you will get your opportunity to load up on builder stocks.. but you always need to consider the bigger macro picture which is always a wild card and the reason why I look at the picture in 3 month chunks or less

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#36) On January 30, 2008 at 1:02 PM, gciron (< 20) wrote:

FB?

in the case of tousa, even if there debt is reduced by lets say 700m, that will still leave them with lots of debt.  how can they get out of bankruptcy with little sales?  

-From 3rd qtr of 3700 houses in backlog to the 4th qtr of 2500.  

 -cancellation rate = 47%

in my humble opinion, in two quarters they will not have houses in backlog.  what are your thoughts?

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#37) On January 30, 2008 at 4:04 PM, aneanew (< 20) wrote:

What are your thoughts on MTH for the long haul?   They seem to have more cash and less specs than others in the top 12 builders.  Is there bankruptcy in the future, or would it be a good one to pick up pending spring sales and finally hitting the bottom sometime between April and September?

 Great blog btw.   Report this comment
#38) On January 30, 2008 at 4:09 PM, floridabuilder2 (99.59) wrote:

gciron... i can't answer any questions on tousa... lets leave it at that

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#39) On January 30, 2008 at 4:15 PM, floridabuilder2 (99.59) wrote:

aneanew.... of the 19 builders that are left that i track (including AVTR as a builder, but they are more of a land play).... I would rank them somewhere between 6-8.....  they get 1/2 their sales out of Texas which historically is a place where you make thin margins... however, it is better to make thin margins than no margins.....  i think they would get a large bounce due to the heavy short interest and discount to book, but as a long term play I don't know if I am that big of a fan of them.....  I guess it is better to buy the #6-8 than the bottom dwellers though

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#40) On January 30, 2008 at 4:25 PM, aneanew (< 20) wrote:

Thanks FB.  I agree they are middling.  Though I've been liking their volatility and lower entry point recently.  And eyeing them because of their bounce potential.

You think they would be good to get into after the bottom hits.  Then ride the wave a short time and get out? Or, would you spend the money somewhere else for a longer term play (2-4 years)?

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#41) On January 30, 2008 at 4:36 PM, floridabuilder2 (99.59) wrote:

aneanew.... bounce.... the initial bounce off the lows will get you a double (just like some of the builders went up 75% off recent lows)..... however, it is going to be a grind after that.... I have always contended a 5 bagger on the top builders it would go something like this using a make believe company (also assuming this economy doesn't become a trainwreck, then all bets are off)

spring/summer 07 - $10 on major sell off

late 07 - $20 (your double)

2008 - $25 peak (year 1)

2009 - $25 peak (year 2)

2010 - $35 peak (year 3)

2011 - $45 peak (year 4)

2012 - $60 peak (year 5)

basically you'll make a big chunk of money off that first huge rally... then it will stagnate as people realize we are out of woods but the builders aren't exactly making any money... people forget builders and then when they start realizing earnings and revenue growth in 2010 because there are so many dead carcasses, the train starts to roll again...

remember, this is pure speculation and the macro economy has more to dictate.....  the bounce is probably the better play unless you really promise you'll hold for 5 years..

 

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#42) On January 30, 2008 at 5:46 PM, cubswin08 (30.88) wrote:

GC- Something good is going to happen with TOUSA... that is my opinion, based more on art than science.  Yesterday they filed and today the pps closed where it did two days ago.  There will be another run.   I'm banking on it....or at least hoping too. 

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#43) On January 30, 2008 at 6:41 PM, ShuntSD (95.91) wrote:

Great post FB!

 Yeah the party was good while it lasted.  Now the inventory sits and the money burns.  Builders, along with some banks, will have some losses (and I mean companies gone down the tubes or bought out for pennies).  The cycle was very high and has turned very low, so I think no matter what the gov't does to slow it down, it will be painful to many.

 I have never seen so many unqualified homebuyers get approved.  From the most "creative" loan programs to out and out fraud with mortgage brokers filling out apps on the liar loans.  Well, the party is over, the house is a mess and the parents are pulling in the driveway.  Is Bernanke the Cat in the Hat?

 

 

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#44) On January 30, 2008 at 6:52 PM, gciron (< 20) wrote:

fb, i wont ask anymore questions of you, but perhaps others might have thoughts..

I did find this relating to tousa

Leading up to the bankruptcy, Tousa had reduced its employee head count from 3,200 to less than 1,400. Its sales have fallen 50 percent. 

"Margins are nonexistent or negative," Mon said.

On Wednesday, some noteholders filed two objections, saying that TOUSA's filing "seeks approval of DIP financing for an 'emergency' that simply does not exist," and that the noteholders can prove TOUSA has substantial cash reserves.

The objections, filed by Miami law firm Genovese, Joblove & Battista, P.A., also say the company committed fraudulent conveyance in July, when it "forced" its subsidiaries to grant its first and second lien term loan lenders secured guaranties of $500 million and to guaranty its $700 million revolver to pay debts related to its Transeastern joint venture, which was heavily indebted and the subject of a lawsuit. The filings say the subsidiaries received no consideration from the arrangement or from certain draws from the refinanced revolver -- draws knowingly made in violation of the noteholders' agreement -- and that only the TOUSA parent and one subsidiary had been liable for that debt. The subsidiaries from which the noteholders expect to be repaid had not been liable.

"TOUSA sacrificed the TOUSA subsidiaries," a filing says. "TOUSA incurred $500 million in new financing to repay the JV debt, but caused the TOUSA subsidiaries to become liable for the full amount of this new debt."

U.S. Trustee: slow down

TOUSA also filed an application for the immediate hiring of Kirkland & Ellis LLP; Berger Singerman, P.A.; Ernst & Young LLP; Lazard Freres & Co. LLC; Greenberg Traurig LLC and KZC Services LLC, again asking the waiting period be waived. Donald F. Walton, the acting U.S. trustee over the case, filed an objection, saying TOUSA has not shown that immediate and irreparable harm would result by staying within the proscribed time period.

It also pointed out that the applications were filed before the formation of a creditors' committee, and include materials the court and parties in the bankruptcy need to review and evaluate. 

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#45) On January 30, 2008 at 7:46 PM, bobbyj0708 (< 20) wrote:

I don't get you guys. One little bounce and you guys are talking about who to go long on? WTF?

 Here are the facts:  The economy is in the toilet, home prices are falling, billions in writedowns still to come, the monolines will be downgraded soon, rate cuts by the Fed fail to stimulate the market and you're talking about going long because the GSE's may have their limits raised?

I think you need to remember that the GSE's have tougher standards than Joe Subprime lender, you can't just waltz down to Freddie or Fannie and say, "Where's my jumbo"? Raising limits will do little to save homeowners because these people will not qualify.

 Just because you got bit once by going short doesn't mean it's a bad play. What, you never lost money going long?

All I'm saying is we have a long way to go. 

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#46) On January 30, 2008 at 9:04 PM, bombpg (86.63) wrote:

The fraudulent conveyance claim in TOUSA, even if successful, probably doesn't do much for equity holders because the bank debt will still be good at the parent level, in front of the equity holders.  It could be a valuable chip for the unsecured note holders, if the debt gets stripped from the operating subsidiaries (where the asset value presumably lies).

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#47) On January 30, 2008 at 9:26 PM, floridabuilder2 (99.59) wrote:

cubs.... can't talk about tousa anymore now that it is bankrupt... can't explain either

shunt, the market does not recognize cash as an advantage (only in runups).... so down we go again

gciron... i can't answer questions about tousa... but feel free to ask other questions about other builders

bobbyjo... i'm not sure what your point is?????  who is talking about going long today????  if you read all my blogs on caps and look at what i said then what happened with builder stocks afterwards, you would find I am right way more than wrong...  we are about to take another dive and we are going to go oversold again on the Q1 earnings and it will be time to back up the bus for the eventual short covering....  i could care less about long term macro fundamentals... I just like to back up the bus and load up when builders are going through the floor and people think it is the end of the world

 

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