Ouch. That's gotta hurt. Gotta believe massive layoffs are coming in this sector - the poor folks have nothing to do all day now... Except gear up for all the defaults
Strangely though, PMI and TGIC, two of the largest players - stocks are going up. Short candidates with these numbers? Or too manipulated?
The number of PrivateMI applications received in January by MICA members was 95,131 or 40.5% less than the 160,038 received in December.
The dollar volume of primary insurance written on newly originated 1-to-4 family conventional mortgage loans totaled $13,633.4 million in January, a 48.8% decrease from the previous month’s $26,666.8 million.
Traditional primary insurance totaled $10,038.3 million and bulk primary insurance totaled $3,595.1 million in January. In that same month, primary insurance in-force totaled $616,139.6 million. MICA members reported 37,270 cures and 49,311 defaults during January.
March 09, 2006
Bottom falls out of PMI market - down 41% in January
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5 comments:
TGIC looks too thin -- volume is 50K shares on a good day -- to take a decent short position and not be noticed.
PMI on the other hand looks pretty juicy: it's close to a two-year high, there's a sudden drop in daily volume at this new peak, and decent volume of 2M shares per day.
I thought no one bothers with PMI anymore since you can circumvent that via a piggyback loan.
That's the underpinning of this article I do believe.
Note that PMI at least does business all over the world; that said, the bubble is a world-wide one and the popping of the bubble is already well underway as well. Eventually there will be no room for PMI to turn.
Note also that PMI has authorized a $150M share buyback. (At $45/share, that's about 3M shares.) IMO this is nothing but a typical delaying tactic for a doomed stock.
It serves two purposes: it reduces the "per shares" part of the EPS calculation, so lower overall earnings don't translate into a lower EPS at quarterly-report time.
It also helps to keep the stock price from falling as quickly. In fact, the more cynical of us could extrapolate that it would allow company big-shots to sell their personal shares during this period at a higher price than they might get otherwise, at the expense of the company itself that is providing a little more buying interest.
That said, PMI is up 65c today as I write (to $44.45). It's nearly at the easy-to-remember $45.00 (exactly) all-time high of April 2004, under a cough-up-your-coffee poorer outlook.
Keith old sport, it looks to me like $45 is the goal before it's safe to short it and forget it. Maybe we'll see another obvious pump-and-dump upgrade a la the homebuilders -- but note that that was their last hurrah.
I'm gettin' ready to pull the trigger on PMI!
Keith I hate to be the bearer of not-bad news but this Dec/Jan drop happened last year as well.
Here are some monthly stats from the same site:
Jan 2006......90332
Dec 2005.....161172
Nov 2005.....111459
Oct 2005.....107089
Sep 2005.....153554
Aug 2005.....152993
Jul 2005.....124161
Jun 2005.....162114
May 2005.....137361
Apr 2005.....123382
Mar 2005.....127879
Feb 2005......99180
Jan 2005......99042
Dec 2004.....123859
Nov 2004.....118705
Oct 2004.....135124
Sep 2004.....134842
Aug 2004.....145993
Jul 2004.....137242
Jun 2004.....161725
May 2004.....152842
Apr 2004.....175091
Mar 2004.....166898
Feb 2004.....137948
Jan 2004.....126677
Dec 2003.....145163
Nov 2003.....144485
You could back a couple more years, but I think the fairest conclusion to draw from these numbers are that they are pretty chunky month to month, not like median price figures or even sales figures that trend pretty obviously and are amenable to "seasonal adjustment" tricks.
The best I can offer from this data is that Jan 2006 is down 10% from Jan 2005.
Keith old sport I do believe today's stock market action is the virtual "obvious pump-and-dump upgrade" I mentioned as a possibility in an earlier post.
It just wasn't via the usual channels -- it is somehow implicit in the housing start number that is "only" 7.9% lower than January. The housing boom will never end!
If we are to believe PMI's stock price, the future beginning now is better than anything PMI has ever anticipated, experienced, or even imagined.
But it's still too early to short this SOB. Yesterday's stock action was unbelievable -- they ran it straight down to buy some cheap, so it'll be two weeks of them distributing that.
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