system
A chat on subreddit /r/wallstreetbets
human
The stock prices of the big US home builders. KBH, DHI, LEN, TOL, PHM. They’ve rallied in the last few months as mortgage rates have dropped slightly. JPOW going to start dumping MBS from the Fed’s balance sheet either manually or as they roll off, and MBS will start to decouple from the 10 year treasury and the spread will widen.

JPOW wants the housing market to crash. He’s explicitly told people not to buy houses at this time. He couldn’t be more clear.

The builders are going to get wrecked, stuck selling homes for less than they paid just to get rid of them, and demand for new builds will stop completely. Imagine a retail store that had to sell everything for 30% less than what they paid and can’t replace the inventory at a low enough price anyone would be willing to pay. So after clearancing everything at a loss, all sales stop.

The builders aren’t making entry level homes. They’re making McMansions that people could barely afford at 3% mortgage rates, let alone the 8%+ rates that are coming later this year.

  
Several realtors on YouTube discussing that the home builders are offering massive 20%+ concessions and still can’t sell houses. Anyone who bought one in the last year is now underwater as the comps are over 20% lower, and they can’t sell nor refinance. Builders also withholding completed homes from MLS to avoid looking desperate.

I missed out on shorting Zillow, Redfin, and Open Door in spite the housing bubble popping being obvious to me that their business plan was unsustainable. I’m not missing out in this. I have a 6-figure short position against home builders.

I’m so confident because my entry point over the last couple of weeks has been when a bear market hopium rally in builders has occurred. Which means they have much further to fall. I made a low 6 figures shorting Tesla over the last two years, and have my sights set on home builders.
gpt
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