patrick.net

Reminds me of wanting to short the whole housing market during the great bubble. I couldn't figure out how to do it myself, but read the book and watched the movie "The Big Short" and figured out that it's possible via shorting mortgage-backed bonds. Unless you're dealing with Goldman Sachs, which conveniently pretends there is no liquidity and so your trade can't go through when you want to close out and take a profit. Good movie.

As for SF overall, you might be able to short their municipal bonds:

https://www.sfgate.com/bayarea/article/S-F-municipal-bond-rating-downgraded-by-agency-2375225.php

Patrick says

As for SF overall, you might be able to short their municipal bonds:

Thanks Pat! I'm not very practiced with the Bond Market, but of course that's a great mechanism.

I think if we return to regular rates and inflation, SFBA companies along with many workers, will really have no choice but to seek other pastures.

Careful with that axe, Eugene: the market can remain irrational for longer than you can remain solvent.

Satoshi_Nakamoto says

Careful with that axe, Eugene: the market can remain irrational for longer than you can remain solvent.

Absolutely, that's why I don't want to get into churning puts but some kind of proxy that would go up if SFBA went down, but might go up for other reasons.

Maybe Texas?

Just buy a general short housing etc like srs or drv they have been on sale forever. But due to decay only hold onto them when things go your way and housing goes south. Don't hold if you think there's just sideways movement.

TwoScoopsPlissken says

Any ideas on how to short a city over the long term?

Buy puts on REITs? But long time puts are pricey.

Investing in SFBA Pawn Shops, if any are listed companies? But that's too indirect.

Would love to hear ideas.

There are futures on home prices based on Case Shiller Index. You can play the whole country or certain regions.

http://www.cmegroup.com/trading/real-estate.html
Real Estate Products
Manage the risk on your residential properties with Real Estate futures and options from CME Group.

**** Just do your homework first.

TwoScoopsPlissken says

Absolutely, that's why I don't want to get into churning puts but some kind of proxy that would go up if SFBA went down, but might go up for other reasons.

Puts is usually a leveraged position. You can just short QQQ which has high concentration of companies that are benefiting bay area. If you don't think that the market will go down, then San Francisco will not go down, so don't waste your energy trying to short it.

TwoScoopsPlissken says

Shorting San Francisco

What about shorting the bonds cities buy? If this is possible, put me down for Stockton, their free cash fiasco means they still haven't bottomed.

Thanks Folks. I don't want to short QQQ because I feel that Tech Companies will move elsewhere (or expand elsewhere which is already starting to happen), and won't necessarily collapse with SFBA.

SRS and the futures on Case Shiller look Good. Bond markets I understand little about, but maybe will have to learn.

One rule I learned is to never short momentum stocks, even when they are deeply overpriced.