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Greenspan Warns of Likely U.S. Recession - Page 2

post #41 of 77
Quote:
Originally Posted by Fellowship View Post

There is always money to be made..
Fellows

You got that right! Congrats Fellows.
post #42 of 77
Quote:
Originally Posted by lfe2211 View Post

You got that right! Congrats Fellows.

Now I would say this....

Make all the profit you can in the market but take your profits and convert them from the US dollar and buy Gold. Gold will keep your equity protected from the deflating US dollar.

Do your own thinking and acting but consider the above.

Fellows
May the peace of the Lord be with you always

Share your smile, Have respect for others, and be loving to all peoples

Paul in Athens: Acts 17 : 16-34
Reply
May the peace of the Lord be with you always

Share your smile, Have respect for others, and be loving to all peoples

Paul in Athens: Acts 17 : 16-34
Reply
post #43 of 77
Quote:
Originally Posted by Fellowship View Post

Now I would say this....

Make all the profit you can in the market but take your profits and convert them from the US dollar and buy Gold. Gold will keep your equity protected from the deflating US dollar.

Do your own thinking and acting but consider the above.

Fellows

That would be all well and good but..shorter vacations, longer work weeks and skimpy sick leave for Americans add up -- not to greater upward mobility, but to a burned-out workforce earning less than preceding generations.

Quote:
Comparing the incomes of American men who were in their 30s in 2004 with males who were in their 30s in 1974, the researchers found that today's men actually earn about 12 percent less, after inflation, than their fathers' generation did. "There has been no progress at all for the youngest generation," the group reported. The American family stays afloat because its total income has been swelled by women's paychecks.
post #44 of 77

I don't doubt that for a second...

This is why I try to build wealth in my own ways.

The corporate world is really sad these days.

Fellows
May the peace of the Lord be with you always

Share your smile, Have respect for others, and be loving to all peoples

Paul in Athens: Acts 17 : 16-34
Reply
May the peace of the Lord be with you always

Share your smile, Have respect for others, and be loving to all peoples

Paul in Athens: Acts 17 : 16-34
Reply
post #45 of 77
Thread Starter 
Quote:
Originally Posted by lfe2211 View Post

This is really very sad. You guys are missing out on one of the greatest Bull Markets ever (an undisputed fact) because of the nonsensical doom & gloom postings of people like trumptman. China and the global economy are booming. Many US companies are partcipating in that boom. Will the boom end? Perhaps. But not until at least August,2008 when China will host the Beijing Summer Olympics.

http://www.mercurynews.com/breakingnews/ci_6347872

I suggest you take some time and do your own research on what the prospects for a US recession are. And, don't take as gospel the predictions of anyone on a computer forum, whether they be bullish (me) or bearish (T-man). That's what you do in every other aspect of your life so why not do it for your money as well?

First I've not told anyone to cash out and get out of the market. I've said get some liquidity. For a country with a negative savings rate, this isn't bad advice. We have many people who no longer practice financial management, instead they practice debt management as financial management. They think that having no savings, living on the edge, but being able to make all their monthly payments is "financial management." The concept of emergency funds, rainy day accounts, or even not putting the car brake job on a credit card has become a foreign concept to many Americans.

When I started the thread I noted that since many people on here are not as "ehem".. ah... experienced as I am in terms of age, they have actually gone through an economic downturn. They've never watched any sort of credit become more expensive to acquire or even be tightened. Even now the overnight rate is basically neutral with regard to the fed and people are acting like it is the early 80's with ol' Paul giving us 21% overnight rates.

That sort of thinking is harmful to the parties undertaking it. I've not said there wasn't money to be made, quite the opposite. I've never said sit on the sidelines, again quite the opposite because many items go at a discount when the excess credit is squeezed out and people still need cash.

Quote:
Originally Posted by vinea View Post

Who's missing out? Trumptman is sitting on no more than $10K. I have a pile of cash because we expected to have to put a down payment on a house but that isn't all my assets and I'm looking to get back in. trailmaster308 is the only one out of the market.

Also, my reading of the Chinese is that they indictated in June that they are unwilling to allow the bubble to continue to grow until after the Olympics and has allowed their market to adjust and increased the stock trading stamp tax to try to achieve a softer landing. The Shanghai composite looks to have leveled out without becoming a smoking hole. If they can stay comfortably above 3000 through the Olympics they'll have a soft landing and a good basis for future growth. If they hit 5000 they're going to pop and thud. IMHO from very casual analysis.

Vinea

Bingo. I've not said get out. I've said get some liquidity. We are talking about a widespread mentality where people would put 0% on a home with a balloon payment and believe the appreciation would allow them to refinance into a conventional mortgage a couple years down the rode. This mentality is dangerous. The belief you can continue to use the house as a ATM, or use it to reconfigure debt is very harmful in circumstances such as we have now.

Quote:
Originally Posted by Fellowship View Post

There is always money to be made..

I have just made over $1,300 in three trades in and out of COH

Coach handbags are very popular with the ladies and their stock only goes up over the long haul.

Fellows

Right, but money has been cheap for so long that people never figured borrowing it into their rate of return. The time is changing on that mentality.

Also not to toot my own horn, but I'll note that I bought and have held a significant sum of PVX at $9.99... today closed at $12.16... add another 6-7% gain for the monthly dividend.

Nick

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

Reply

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

Reply
post #46 of 77
How appropriate is it that this pseudo-financial thread on an Apple Computer site is running concurrent with the John Mackey scandal. For those unfamiliar with this topic, here are 2 clips from CNN Money and Business Week:
------------------------------------------------
"Whole Foods Market, the US natural and organic supermarket chain, has built its successful brand around a set of company "core values" that are highly focused on corporate integrity.

But Whole Foods' reputation and its troubled $565m bid to take over main rival Wild Oats have both suffered a setback with revelations that John Mackey, its co-founder and chief executive, had been anonymously attacking his eventual takeover target on an investors' online message board."


"John Mackey’s penchant for proselytizing under a fake name has proven more potent than he would have thought. Bear Stearns analyst Robert Summers thinks the Federal Trade Commission could now succeed in stopping Mackey’s Whole Foods Market from buying Wild Oats.

The reason isn’t simply that Mackey was trashing Wild Oats on Yahoo! boards under the name Rahodeb without noting his position as Whole Foods CEO...."


------------------------------------------

Don't listen to anyone's financial advice on an internet chat site. Do your own research and make your own decisions.
post #47 of 77
Thread Starter 
Here is an article that really hits home with regard to this.

Quote:
Worse, nearly 60% of people 44 and under didn't even have $500 set aside for an emergency, according to the Federal Reserve Board's 2004 Survey of Consumer Finances.

Small wonder that many people feel they have no option but to use plastic in a crisis.

These folks need to get some cash in a savings account.

Nick

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

Reply

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

Reply
post #48 of 77
Quote:
Originally Posted by vinea View Post

You're getting 5.35% in a MMA? I need to move from ING. AmTrust right?

Hmm, can one do a trailing stop on an index fund without micromanagement? I guess I'd have to use an ETF. I don't have time to research individual companies and do the analysis that individual stock picks require.

I dunno...if folks really believe in a large decline around the corner I would expect them to have reverse funds in their portfolios to protect gains/hedge against losses.

Vinea

Yes AmTrust is one account I have. I also have GMACBANK and an HSBC.

I dont know if I believe in a large decline, I just did fairly well these past years and pulled the bulk of my money out to take a break. Like I said before I still have a small mutual fund...little over 55k I won't be touching.
post #49 of 77
Dow hit record hi. Recession to break any day.

Banner day for the Dow
post #50 of 77
Quote:
Originally Posted by lfe2211 View Post

The world economy is much different than it was 1992 (yes I remember 1992 very well). We now have a global economy whose growth is booming in places like China,India, Russia, Brazil and elsewhere. In fact, many US companies like John Deere, Catepillar, Cummins Engines, Foster Wheeler, Fluor, Dell (alas not Apple yet) and many, many others are participating in this infrastructure/agriculture/industrial boom

Catepillar?

"Caterpillar Inc. said Friday that weakness in its North American business and higher material costs pushed profit 21% below year-ago levels"

""It's the growth of emerging economies, Brazil, Russia, India and China, that's going to drive [future] earnings," said Alexander Blanton, analyst with Ingalls & Snyder.
Sales overseas improved $943 million in the second quarter, offsetting a $1.1 billion decline in North American sales, Caterpillar said. "


So it seems the North American market can shape the picture despite the fact that other markets are the future. To suggest that the North American market does not affect things is a bit off in my opinion.

Fellows


http://www.marketwatch.com/news/stor...C213096B807%7D
May the peace of the Lord be with you always

Share your smile, Have respect for others, and be loving to all peoples

Paul in Athens: Acts 17 : 16-34
Reply
May the peace of the Lord be with you always

Share your smile, Have respect for others, and be loving to all peoples

Paul in Athens: Acts 17 : 16-34
Reply
post #51 of 77
Quote:
Originally Posted by Fellowship View Post

Catepillar?

"Caterpillar Inc. said Friday that weakness in its North American business and higher material costs pushed profit 21% below year-ago levels"

""It's the growth of emerging economies, Brazil, Russia, India and China, that's going to drive [future] earnings," said Alexander Blanton, analyst with Ingalls & Snyder.
Sales overseas improved $943 million in the second quarter, offsetting a $1.1 billion decline in North American sales, Caterpillar said. "


So it seems the North American market can shape the picture despite the fact that other markets are the future. To suggest that the North American market does not affect things is a bit off in my opinion.

Fellows


http://www.marketwatch.com/news/stor...C213096B807%7D

Your opinion is uninformed.

1) Nowhere in my posts do I say that North American markets don't matter. All of the companies I mentioned including CAT have healthy NA markets but also are particpating heavily in the BRIC and ROW booming economies now and will continue to do so in 2008.

2) Catepillars underperforming quarter is just that--a quarter's worth of earnings. It has had a large and justified runup in 2007 (~$60 to $86).

3) The NA downturn for this quarter has to be viewed in light of many US related economic factors all of which were discussed in the quarterly conference call.

3) Guidance for the rest of 2007 in NA is actually higher.

3) If you had listened to the quarterly earnings conference call and read the detailed financials instead of just quoting one of many Tom, Dick & Harry analysts, you would have a better understanding of the current quarters downturn in NA sales.

I suggest you do your homework before you make this kind of uninformed post.
post #52 of 77
Quote:
Originally Posted by mydo View Post

Dow hit record hi. Recession to break any day.

Banner day for the Dow

LOL! During these events one should start to evaluate one's exits.

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply
post #53 of 77
Quote:
Originally Posted by SpamSandwich View Post

LOL! During these events one should start to evaluate one's exits.

You exit. I'll buy.
post #54 of 77
Thread Starter 
Some people have exited, that is for sure.

CNN/Money

Quote:
Until recently, there has been a seemingly unlimited supply of cheap money to fuel leveraged buyouts and other takeovers. There was also an easy flow of mortgage money available before the housing market turned south and the crisis erupted in subprime mortgages made to borrowers with poor credit.

But now investors are showing a greater disdain for risky debt - and fears about a looming credit crunch have shaken investor confidence worldwide. The Dow Jones industrial average plunged 311 points Thursday - its second-worst day of the year - and sent global stock markets reeling. The Dow opened lower Friday as well but later stabilized and was little changed in mid-morning.

People are always welcome to their own opinions and views. Always try to have your money working for you no matter what sort of market conditions exist. However realize that this regardless of what you think the economy is going to do, this time it is all going to be about liquidity. The money has been free flowing and easy for so long that many folks cannot imagine any differently. Credit and borrowing money is going to start getting very expensive again.

Nick

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

Reply

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

Reply
post #55 of 77
Quote:
Originally Posted by trumptman View Post

Some people have exited, that is for sure.

CNN/Money



People are always welcome to their own opinions and views. Always try to have your money working for you no matter what sort of market conditions exist. However realize that this regardless of what you think the economy is going to do, this time it is all going to be about liquidity. The money has been free flowing and easy for so long that many folks cannot imagine any differently. Credit and borrowing money is going to start getting very expensive again.

Nick

You seem to pop out of your gopher hole after down market days preaching your doom & gloom message. Are you really Alan Greenspan posting under a pseudonym?

How's that PVX working out for you these days? If you had invested the same money in AAPL in May of 2005, you'd be up ~1500% relative to PVX(you said your initial investment in PVX was at $9.99 which it was in May,2005).

BTW, have you shorted CMI and FWLT yet?
post #56 of 77
Thread Starter 
I bought PVX in January of this year when it hit $9.99.

Yahoo Finance

One thing you have to remember is PVX pays a 1% monthly dividend.

Sure 24-26% isn't as good as say...60% but I never said Apple has to lose for PVX to win or vice versa.

In 2005, I wasn't even in the market yet. I was getting some of my gains out of housing which I has purchased back in 2000. I'll be polite and simply note that my gains since then have been well north of 1500% and sit around 16000% since 2000. Those numbers are lower than they were at what I considered to be the real estate peak, but I won't turn up my nose at them.

I've not shorted the two stocks you mentioned. You never sent me the list you declared you wanted me to investigate.

I'm not going to declare I can beat anyone and everyone at stocks yet nor may I ever be able to do that. If I do as well in the second half of the year as I did in the first I'll be looking at a total portfolio gain of 40-50% for the year which I won't consider too bad for only my second year in the market.

lfe, just because we don't see eye to eye on where the economy is going right now doesn't mean I consider you wrong about certain stock matters. It doesn't even mean I need to prove you wrong on anything in particular at all. I've simply noted I think credit is going to get more expensive and in a country where people have no savings and spend more than they make, a warning to that effect wouldn't suck. I've stuck my stake in the ground even naming a date of when I think the recession will be here.

Please don't personalize this. Keep it civil. If you think people ought to do something different, state it. Name the stocks, the times the places. I might even follow your advice with a portion of my funds and my own with another portion. You want to discuss certain stocks, we can do that in a thread of your choosing or even here. There is only thing one thing I abhor and it is someone who thinks that by proving someone wrong, they are right. State why you believe what you do economically. Give some of your own recommendations. No one is slamming a door in your face.

You noted Cummins and Foster Wheeler. Cummins I am familiar with but not at all with Foster Wheeler. What do you think they are going to do and why?

Nick

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

Reply

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

Reply
post #57 of 77
Quote:
Originally Posted by trumptman View Post

I bought PVX in January of this year when it hit $9.99.

Yahoo Finance

One thing you have to remember is PVX pays a 1% monthly dividend.

Sure 24-26% isn't as good as say...60% but I never said Apple has to lose for PVX to win or vice versa.

In 2005, I wasn't even in the market yet. I was getting some of my gains out of housing which I has purchased back in 2000. I'll be polite and simply note that my gains since then have been well north of 1500% and sit around 16000% since 2000. Those numbers are lower than they were at what I considered to be the real estate peak, but I won't turn up my nose at them.

I've not shorted the two stocks you mentioned. You never sent me the list you declared you wanted me to investigate.

I'm not going to declare I can beat anyone and everyone at stocks yet nor may I ever be able to do that. If I do as well in the second half of the year as I did in the first I'll be looking at a total portfolio gain of 40-50% for the year which I won't consider too bad for only my second year in the market.

lfe, just because we don't see eye to eye on where the economy is going right now doesn't mean I consider you wrong about certain stock matters. It doesn't even mean I need to prove you wrong on anything in particular at all. I've simply noted I think credit is going to get more expensive and in a country where people have no savings and spend more than they make, a warning to that effect wouldn't suck. I've stuck my stake in the ground even naming a date of when I think the recession will be here.

Please don't personalize this. Keep it civil. If you think people ought to do something different, state it. Name the stocks, the times the places. I might even follow your advice with a portion of my funds and my own with another portion. You want to discuss certain stocks, we can do that in a thread of your choosing or even here. There is only thing one thing I abhor and it is someone who thinks that by proving someone wrong, they are right. State why you believe what you do economically. Give some of your own recommendations. No one is slamming a door in your face.

You noted Cummins and Foster Wheeler. Cummins I am familiar with but not at all with Foster Wheeler. What do you think they are going to do and why?

Nick

Anyone can claim 10,000+% gains on investments on a computer site like this. It's pointless because it's unverifiable. Let's not play my... is bigger than yours... Any one can claim anything on a site like this.

Your posts to date ignore the global boom in emerging markets like BRIC and ROW. Please do nott equate these countries to Japan in 1992. Japan was a super economic, protectionist country wherin the US could hardly sell a bushel of cucumber at that time. China and their 1.5 trillion in hard currency reserves can not get enough of our goods and services. They are building up and cleaning up their infrastructure at break neck speed to show themselves off to the world in August of 2008. Cummins for example is supplying more than half of the natural gas and clean diesel engines to redo completely the Beijing Transport Bus System. FWLT, JEC, FLR and MDR have construction contracts with the Chinese to rebuild their roads, factories, plants, etc. Money is pouring into the these companies as a result of this infrastructure modernization. Many tech comapnies like DELL (MSFT too) for example are about to sell hand over fist in India , a country that is just now increasing its abysmally low per capita computer ownership.

Your posts also ignore the tidal wave of liquidity poised to flood into the US thanks to the weakness of the dollar. The Euros in particular are just waiting for a bottom against the Euro before they jump in with both feet. Signs of that are already evident if one looks at the booming pent house/5th avenue buys in the NYC real estate market by Euro millionaires (including Russian and other eastern europeans). I would not be surprised if Vodaphone buys all or a bigger stake in VZ beacuse of the cheap dollar.

So you preach Greenspan doom & glloom, I preach "what a great time to be long in this booming global economy.Long to me is August of 2008. After that, we'll see.
post #58 of 77
One thing you'll always hear is: Never try to time the market. Just start investing now, because the overall trend of the market is up over time.

Barring a global plague or an enormous catastrophic event (not unheard of in the span of history) things will continue to grow.

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply

Proud AAPL stock owner.

 

GOA

 

Get the lowdown on the coming collapse:  http://www.cbo.gov/publication/45010

Reply
post #59 of 77
Thread Starter 
Quote:
Originally Posted by lfe2211 View Post

Anyone can claim 10,000+% gains on investments on a computer site like this. It's pointless because it's unverifiable. Let's not play my... is bigger than yours... Any one can claim anything on a site like this.

Look, you made some claims and assumptions about what I bought and when, and questioned my return. So I provided the true answers. Sure anyone can claim anything, but what would be the point and what would I gain?

I mean seriously what do I gain by having people on here save some money. If I'm going to lie shouldn't it at least serve a purpose?

Quote:
Your posts to date ignore the global boom in emerging markets like BRIC and ROW.

I don't ignore them. I don't turn them into a magic bullet either. How can I ignore them and equate them to Japan at the same time? Seems like you are claiming I'm addressing and not addressing them. You don't like my conclusions regarding them, but that doesn't mean I've ignored them.

Quote:
Please do nott equate these countries to Japan in 1992. Japan was a super economic, protectionist country wherin the US could hardly sell a bushel of cucumber at that time.

Regardless of how each country was protectionist, both have acted as such. Japan as you noted imposed actual trade barriers. China does strictly "regulate" imports but most of all, they manipulate the Yuan. We know that China surpassed the U.S. this year in foreign investment. The massive demand to invest in China should be creating massive demand for the Yuan which in turn should cause a return to balance with regard to the dollar and relative worth. Instead China manipulates the Yuan, especially by purchasing U.S. Securities. This manipulation will correct. You do end up riding a dead horse.

Quote:
China and their 1.5 trillion in hard currency reserves can not get enough of our goods and services.

What a misnomer! Hard currency reserves are dollar denominated investments. The dollar sinks as it must relative to other currencies that are generated more demand, and the value of those reserves sinks as well.

Quote:
They are building up and cleaning up their infrastructure at break neck speed to show themselves off to the world in August of 2008. Cummins for example is supplying more than half of the natural gas and clean diesel engines to redo completely the Beijing Transport Bus System. FWLT, JEC, FLR and MDR have construction contracts with the Chinese to rebuild their roads, factories, plants, etc. Money is pouring into the these companies as a result of this infrastructure modernization. Many tech comapnies like DELL (MSFT too) for example are about to sell hand over fist in India , a country that is just now increasing its abysmally low per capita computer ownership.

Rapid internal growth leading to speculative bubbles that pop. I believe I've covered this. I'm also dealing with matters of demography and currency. It is a long view. I'm not talking about what Cummins is going to do next quarter.

Quote:
Your posts also ignore the tidal wave of liquidity poised to flood into the US thanks to the weakness of the dollar. The Euros in particular are just waiting for a bottom against the Euro before they jump in with both feet. Signs of that are already evident if one looks at the booming pent house/5th avenue buys in the NYC real estate market by Euro millionaires (including Russian and other eastern europeans). I would not be surprised if Vodaphone buys all or a bigger stake in VZ beacuse of the cheap dollar.

So you preach Greenspan doom & glloom, I preach "what a great time to be long in this booming global economy.Long to me is August of 2008. After that, we'll see.

I find it hilarious that you swear we are not repeating Japan and yet almost everyone can remember the Japanese buying up all sorts of U.S. investments when the yen appreciated against the dollar. That is part of the realization about the problem.

Why don't you read here because everything you are claiming for BRIC and ROW sounds a little familiar.

Also I'm not saying this is tomorrow. I've stated my view is recession in Spring of 2008. In otherwords that is when it will start, but of course they won't be able to "officially" declare recession until the second quarter of contraction. Since that is six months later, I'm talking end of September-ish is when the word becomes official versus whispered.

I like your view on Vodaphone. I've had that thought myself.

Take care,
Nick

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

Reply

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

Reply
post #60 of 77
Are you Alan Greenspan posting under a pseeudonym?

With all due respect (really, no ad hominem intended), except for your predection of a recession circa Spring,2008 and asking folks to save more, I find the rest of your writing a series of obfuscating, disjointed non-sequiturs. Let's just agree to disagree. I'll go my way in NYC, USA, you go your way in Galt's Gulch, Randland.
post #61 of 77
Thread Starter 
I find it hilarious that the parties on here who insult me call me a disjointed idiot and the fed chairman at the same time.

I suppose that means I'm only stupid enough to run the entire banking system.

We can agree to disgree. I've asked you to lay your case and actions out there. You prefer to believe that you are right in a vacuum or by insulting/disproving me. (You seem to think an insult is a bit of logic that disproves someone)

It is easy for me to ignore. The sheep get sheared as the saying goes and I've been making money as a contrarian for quite a while now. If everyone could see the opportunities ahead of time, everyone would be rich. You were just like those baaahhh'ing that I'm an idiot to buy so much real estate in early 2000. Everyone knows real estate is dead and gee... look at that NASDAQ.

How long as this bull been running? So long that the rules must have changed right? They don't apply anymore. It is a new age with different limits. We've got a magic bullet (BRIC ROW) that is changing the rules.

Everytime you hear that it is time to exit the bus. It is time to watch the pigs get slaughtered. It is time to apply the word "correction." Of course none of the bubble issues will truly manifest themselves until the U.S. goes into recession. Then the dominos will really fall.

Nick

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

Reply

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #62 of 77
Quote:
Originally Posted by trumptman View Post

I find it hilarious that the parties on here who insult me call me a disjointed idiot and the fed chairman at the same time.

I don't agree with all your points but I don't think you're an idiot either. I think the Fed will cave in this Fall and start lowering rates. Time will tell, you've made some interesting and provocative points, IMO.
post #63 of 77
"You were just like those baaahhh'ing that I'm an idiot to buy so much real estate in early 2000. Everyone knows real estate is dead and gee... look at that NASDAQ."

Oi vey. Groan. Why me? I sold my house on the south shore of LI in July, 2005 at the market peak for twice the price I payed in 2002. Don't presume that you know anything about what I do or don't do, know or don't know.

I've layed out my bullish global infrastructure plays in great detail with references to actual companies I've bought over the last 15 months (as opposed to your Wiki references, bubble kaka and piddling PVX play). My inviolate strict sell rules are to get out of stocks on the way up at 2x, 2.5x and (oh joy) 3x as the situation dictates (AAPl included).

There, you 've gone and done it--you made me angry enough to make unverifiable claims on a freakin' computer internet site--happy? Please, leave me alone and peddle your bullshit elsewhere.
post #64 of 77
Thread Starter 
NY Times

Quote:
Only two months ago, it seemed as if almost any company could borrow money at low interest rates. Now loans seem to be drying up everywhere.

What had seemed like a contained problem, involving home loans to people with poor credit, has suddenly mushroomed into a rout that threatens to make life difficult for everyone who needs to borrow money.

MoneyCNN

Quote:
Turbulence in the credit markets has already claimed several casualties - from highly leveraged hedge funds to mortgage providers whose lenders have cut them off.

But the fallout could get worse. Some experts say the debt crunch could squeeze underperforming companies that have, until now, been able to finance their way out of trouble - and trigger a wave of corporate bankruptcies.

"There have been a lot of operational problems and other problems within some companies that have been masked by liquidity in the marketplace and the ability to refinance their debt," said Jeff Marwil, a partner in Winston and Strawn's restructuring and insolvency practice in Chicago.

Economist.com

Quote:
The biggest risk to the global economy probably lies with debt-laden American consumers. They have been battered by falling house prices and expensive petrol, and their spending growth has already slowed sharply. A credit squeeze will aggravate the housing bust and falling house prices could drag spending down further. But the rest of the world is growing strongly and unemployment in America remains low, so a recession there is by no means inevitable. What's more, if the economy were to head downhill fast, the Fed, despite its public worries about inflation, has plenty of scope for cutting interest rates.

All told, the credit wobbles so far are likely to have only modest economic consequences. But what if they prompt a broader market meltdown? After all, many of the newfangled instruments that dominate today's debt markets have never been tested in a serious panic. Credit derivatives have probably improved the stability of the global economy by dispersing risk, but it is no longer clear where that risk is being held. And many of the new risk-dispersing instruments are so illiquid that trouble may not emerge for some time. It was several months after the subprime mortgage market turned sour before the scale of the losses at two Bear Stearns hedge funds became clear.

Marketwatch

Quote:
Could the turmoil in the markets in the past few weeks be the precursor of a full-blown credit crunch that could force the U.S. and global economies into a recession?
Some observers think that the markets are exhibiting classic signs of a so-called "Minsky moment," when overleveraged borrowers must finally pay the piper for their euphoria. The result, they say, will be a credit shortage that could bring down even innocent bystanders in their wake.
Academics, economists and money managers are all sounding the alarm. Financial markets are counting on the Federal Reserve to drop interest rates to cushion the fall, and yet senior officials at the central bank have insisted that the markets must discipline themselves.
'I think the market wants to believe that we're pretty much done with the shakeout.'
— Paul Nolte, Hinsdale Associates
Market professionals seem resigned that the fallout is inevitable, and has already begun with losses in several rocky sessions on Wall Street.
"The feeling I have today is that of watching a very slow motion train wreck," wrote Jeremy Grantham, chairman of GMO LLC, which manages about $150 billion in assets.
The S&P 500 index is now pricing in a recession starting in late 2007 and lasting for most of 2008, led by the financial sector, said David Bianco, chief equity strategist at UBS. "We believe the market expects this recession to slash S&P 500 [earnings per share] by about 10%," Bianco said.

Not an absolute consensus, but people are writing about it because liquidity is coming up more and more. Form your own views, take your own actions, I'm simply posting what I see happening and information related to it.

I leave you with this.

Quote:
That is the core of a financial crisis, when too many people head to the exits simultaneously,” said Robert Bruner, the dean of the business school at the University of Virginia.

Mr. Bruner is the co-author of a book on the Panic of 1907, to be published next month, and he sees similarities between then and now. “It was a time marked by the rise of new financial institutions and new financial instruments,” he said. “It marked the end of a period of extraordinary growth, from 1895 to 1907.”

The credit market has changed drastically in recent years, as banks grew far less important and credit rating agencies like Standard & Poor’s and Moody’s became the essential players in the new financial architecture.

Many loans, whether mortgages or loans to corporations, were financed by selling securities. It was the credit agency ratings that determined if those securities could be sold, and deals were structured to meet the criteria set by the agencies.

Those criteria turned out to be very generous. The agencies figured that even very risky loans were unlikely to cause big losses, and so most of the securities backed by loans to poor credit risks could get AAA ratings — the highest available — as long as those securities had first claim on loan payments. Investors bought the securities thinking they were completely safe, and some did so with borrowed money.

Now, however, there is fear even about those securities. The rating agencies are changing their criteria for the loans, and many investors no longer trust the ratings.

And this sage advice...

Quote:
“Financial panics don’t happen during depressions,” said James Grant, the editor of Grant’s Interest Rate Observer. “They happen on the brink of depressions. The claim the world is prosperous is beside the point.”

Nick

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #65 of 77
Thread Starter 
YouTube

That is about all I have to say about that.

Nick

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #66 of 77
Quote:
Originally Posted by trumptman View Post

YouTube

That is about all I have to say about that.

Nick

Makes me glad I don't watch that show.
post #67 of 77
When Alan Greenspan talks, I listen.
post #68 of 77
Thread Starter 
Some crazy guy named Jim Cramer makes the same point as some crazy poster around here.

A few of the best ones...

Quote:
What do the woes of these folks have to do with you? Can a housing fire sale in Phoenix or Fort Myers really affect your Hamptons beach house or your newly purchased Upper West Side classic six? Well, yes, and in even bigger ways than you might think. That’s because the people who ultimately bought the bonds backed by what now look to be billions in bogus mortgages are those who run most of the big pension-, hedge-, and stock-and-bond-market mutual funds in this country. These suckers bought such bonds because bonds backed by mortgage-payment streams paid a tiny bit more than United States Treasuries, a comparable low-risk, if low-return, vehicle, and were supposed to have very little or no risk themselves. Some managers, however, borrowed huge sums to buy tons of these mortgages to turbocharge their results. And the most aggressive managers bought billions in mortgages given to less creditworthy individuals, the so-called subprime loans you keep hearing about.

And...

Quote:
Now these funds, which were supposed to be brimming with cash—the “liquidity” you hear about all of the time—turn out to have not much at all, and there are virtually no buyers anywhere for these mortgage-backed bonds, because who knows if the mortgages that are in them are worth anything? We only know that each day they are worth less than the day before, because every week, thousands of borrowers are being foreclosed.

Another good point...

Quote:
Which brings us back to your money and why you’re losing it. Unless you keep your money in cash or Treasuries or CDs or the First National Bank of Sealy, there’s a pretty good chance that you’re in a fund or funds that are mismarked and worth less than they and you think. If you own a home, you’re in the financial crosshairs, too. It’s not just that the lending crisis is causing interest rates to rise, jacking up your monthly nut if you have an ARM. It’s that the value of your home is endangered because of the hit Wall Street—the industry, if not the stock market—is set to take.

Finally...

Quote:
Thousands of miles from where the walls began tumbling down, New York, the town where the architects of card houses live, will soon feel the full force of the storm. So much of our economy depends on these financial builders and their minions who buy and sell the products that the pain may actually end up being felt worse here than in the epicenters of the problem. You just don’t know it or feel it yet. It’s all happened too fast, in just a few weeks of another sweltering summer, with the worst, much worse, yet to come. Which is why I bet that in the time it took for you to read this article, the Tom Joad effect just took another few bucks out of your pocket. Get ready, many more dollars will soon vanish before you discover you’ve been robbed.

Give them a few months. Everyone is NOW writing about the liquidity crisis. Perhaps now they will move on to the... insolvency crisis.

Nick

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #69 of 77
Quote:
Originally Posted by Fellowship View Post

I don't doubt that for a second...

This is why I try to build wealth in my own ways.

The corporate world is really sad these days.

Fellows

Oooh! Something sinister, I hope.

Fellowship: Christian internet poster by day, ruthless syndicate boss by night!
They spoke of the sayings and doings of their commander, the grand duke, and told stories of his kindness and irascibility.
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They spoke of the sayings and doings of their commander, the grand duke, and told stories of his kindness and irascibility.
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post #70 of 77
Quote:
Originally Posted by trumptman View Post

Some crazy guy named Jim Cramer makes the same point as some crazy poster around here.

A few of the best ones...


And...



Another good point...



Finally...



Give them a few months. Everyone is NOW writing about the liquidity crisis. Perhaps now they will move on to the... insolvency crisis.

Nick


Well, far be it for me to dispute people like Cramer. But, suffice it to say I don't think this credit crunch will lead to massive numbers of foreclosures and the "house of cards" coming down as he says. That is, unless he and others panic so much that they create....panic.

The vast majority of mortgages are secure. Yes, as Cramer says there are 7,000,000 teaser rates from 2005-ish coming due. But that doesn't mean those people cannot refinance and/or suck up the payment. One can't assume that "7,000,000 people are going to lose their homes." That's simply not going to happen.

And while the Fed may "know nothing" as he says, they'll know plenty if there is a TRUE credit crunch. Rates will go down, and more liquidity will be put into the system. Right now, the reality is someone like me...middle income....can get a mortgage no problem. Now I see what you're saying...if the backers of those loans lose confidence and divest en masse, we could have an issue. But somehow I don't see the major banks losing their shirts here. They have very deep pockets.

One other point: You're unlikely to see a 70's style credit market with 20% interest rates and no credit out there to be had. For one, we're not dealing inflation as we were then, so it will be easy enough to slash the Fed Rate to combat the problem. My feeling is the Fed is going to slash 50 basis points come September, perhaps before then if things get worse.

Actually...last point: As a person that's going to be in the housing market next Spring, I am loving the Real Estate market right now. Burn baby, burn.
I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
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I can only please one person per day.  Today is not your day.  Tomorrow doesn't look good either.  
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post #71 of 77
Quote:
Originally Posted by SDW2001 View Post

Actually...last point: As a person that's going to be in the housing market next Spring, I am loving the Real Estate market right now. Burn baby, burn.

That's Buffet style thinking.
post #72 of 77
Thread Starter 
Quote:
Originally Posted by SDW2001 View Post

Well, far be it for me to dispute people like Cramer. But, suffice it to say I don't think this credit crunch will lead to massive numbers of foreclosures and the "house of cards" coming down as he says. That is, unless he and others panic so much that they create....panic.

Well first it is a lot more than Cramer, but I like tossing out people who basically repeat points I noted after I've said them especially since I(and you) get accused of parroting others so often. Cramer is noting what I mentioned several months ago so I'm sure Jimmac or someone else will accuse me of just reading him on Free Republic and repeating his points here any second now.

Now let me get a bit into why you are not fully comprehending the issues surrounding the credit crunch. First there is the origination side. Through a process called securitization, these mortgages did not have to be held by the parties originating them. They could easily sell them off. Additionally this process which takes several different types and grade of debt and mixes them together was often taking riskier debt and using mortgage debt to help it gain a higher rating.

Take this and apply it to yourself rationally. You are agreeing to buy a bond with a mix of debt. The good debt, that makes the bad debt more easy to stomach is mortgage debt, because housing never goes down. I mean sure it has regional issues, but as a whole it never goes down.

That maxim was just proven wrong. It just did go down nationally. Now again consider this within the securitization process, the mortgage debt and the income stream from it was what made more readily available other debt of lower grades.

So as a buyer of debt, what do you do when the "safe" debt is not longer secure, yet it was what was making it easier to issue and keep the rates down on "risky" debt that was bundled with it?

I'll tell you what you do, you stop buying the debt and that is what has happened. When no one buys, new debt cannot be created and issued.At the fed or market rate which is why when the rate jumped to 6%, the fed jumped in with enough liquidity (fed lending) to defend the rate

Also about the panic, your (or any) home has no more intrinsic value than the "comps" around it. Even if the majority are safe it only takes a few bad "comps" or comparable apples to ruin the entire real estate market. If three of the condos in the building sell for $75k because they are foreclosures, are you really going to buy the non-foreclosures for $125k even if that was a good value relative to their bubble value? You won't because the comps show you could be flipped $50k very quickly.

Quote:
The vast majority of mortgages are secure. Yes, as Cramer says there are 7,000,000 teaser rates from 2005-ish coming due. But that doesn't mean those people cannot refinance and/or suck up the payment. One can't assume that "7,000,000 people are going to lose their homes." That's simply not going to happen.

The reason those mortgages are so risky, even if they are secured by people who have good jobs, can afford the payment, and won't lose their homes is because many of them were structured so that the buyers have "no skin in the game." They have no down payment, or they did a 80% first with a 20% second, rebated back, etc or worse still have a HELOC on top of all that.

Again think about what you would do yourself. You own a home that you bought with 0%, an 80/20 loan and it had an $1800 a month teaser negative am payment which is now going to reset to a $3200 a month payment. You can refinance to get it down to say $2900 using a new 30 year conventional loan with zero down a product that no longer exists because it was subprime or perhaps $24-2600 if you have a large down payment.

The problems, well first of all the home was worth say $350k when you bought it, you owe say $370k to on it now. Real estate was appreciating at 10-20% a year and you thought you would be ahead because it would be worth $425k-$450k by now. You never saved a down payment, you just thought a few years later you would have one by virtue of price appreciation.

Now lets add to that the fact that the home is no longer worth $350k, but is now would not move even at $325k. You are flipped from the purchase price. This would be strike one, the most conventional loans with no negative am. The second strike, well you did negative am and as such, you own $370 on a $325k home. Finally strike three, you have nothing in the game in terms of skin (money) or if you want to get into the game now you need a down payment of 20% or so so over $60k.

Now think about this for a second. You are smart. Even if everything is perfect for you job and downpayment-wise, why would you toss all that into a loser deal? Why would you drop all this money to be upside down on your current home when you could start right-side up and purchase another home, probably better even for cheaper with more conventional loan terms. You do it and then walk away from the previous home, take the hit on your credit score, but you don't live in your credit score. You live in your home.

Understand that is the best scenario. Most people have no down payment. They cannot afford the new payments. They have no incentive to stay in a flipped home because they have nothing to lose with regard to down payment. All they lose is some points on their credit score and they can make tens of thousands of badly originated debt on terrible terms for them disappear.

These people aren't just going to walk, they are going to run away from their homes. Some of them will rent. Some of them will buy on much better terms while defaulting on their other terms. However the original loans are bad and their holders will be screwed.

Quote:
And while the Fed may "know nothing" as he says, they'll know plenty if there is a TRUE credit crunch. Rates will go down, and more liquidity will be put into the system. Right now, the reality is someone like me...middle income....can get a mortgage no problem. Now I see what you're saying...if the backers of those loans lose confidence and divest en masse, we could have an issue. But somehow I don't see the major banks losing their shirts here. They have very deep pockets.

This has been the great debate among economic types. You can't solve an insolvency problem with more fed "liquidity" and keep inflation and interest rates low. I could type ten paragraphs explaining it, but you can't. It is akin to having your cake without the calories.

Quote:
One other point: You're unlikely to see a 70's style credit market with 20% interest rates and no credit out there to be had. For one, we're not dealing inflation as we were then, so it will be easy enough to slash the Fed Rate to combat the problem. My feeling is the Fed is going to slash 50 basis points come September, perhaps before then if things get worse.

The fed can slash rates and if they do, people will know they have given up the inflation fight and the actions that go with such expectations will follow. In my view the rate cut is still a fantasy because the fed has not stopped talking at all about inflation. Many like myself believe the inflation measurement is still too low because the fed has taken out too many items they don't like that happen to show... you guessed it, higher inflation.

Do some reading on securitization. This thing is a house of cards with a firecracker in the middle.

Nick

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #73 of 77
The jobs number has contracted for the first time in 4 years. Credit crunch in action. Dollar lower against the Euro and Gold over $700 an ounce.

Roger Nightingale of Millennium Asset Management says that the overall global economy is not as strong as many like to think. He says Europe just had a horrible quarter in general and that in the two economies China and India which are growing that they are simply taking away marketshare from North American and European economic parties which he suggests will lead to a global economic meltdown in light of a perceived weaker American consumer. He said 50 basis points is neither here nor there that the US economy in his view has been slowing for between 18 to 24 months and it will take more like 150 basis points to catch up with the lagging response of the Fed. He also said many have no business having their jobs at the fed after their failed management of the rates.

http://www.consensus-inc.com/biograp...lenniumbio.htm

Other than my mutual funds I am not in the market (for trading purposes) for the rest of September. I am not quite sure where the bottom will be but I am making a list of things to buy.

Fellows
May the peace of the Lord be with you always

Share your smile, Have respect for others, and be loving to all peoples

Paul in Athens: Acts 17 : 16-34
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May the peace of the Lord be with you always

Share your smile, Have respect for others, and be loving to all peoples

Paul in Athens: Acts 17 : 16-34
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post #74 of 77
Thread Starter 
03-19-2007, 01:16 AM

Quote:
Originally Posted by trumptman View Post

Well you never can be sure if Bernarke might throw dollars from helicopters, but I'm of the firm view that this recession will be here by Spring 2008.

My mental timeline goes like this, the housing slowdown began this year. Many people have finally gotten the fact that the Spring selling season has arrived and amid record inventory, there is no rebound in prices. (When housing is at a normal level, not a red hot market, your home normally sells for more in Spring than trying to sell in December and the first denial claim was, "well now we are just returning to a regular cycle where you have to wait until Spring for further price appreciation)

The truly deluded will hold onto their homes through the entire spring and through the end of the summer and note that they haven't sold. These are the hottest times of the selling season and so when the fall gets here, and the mix of patience, prep, and prayer haven't worked, you will get panic. By this I mean you will finally start getting real price drops instead of the nominal priced drops we have seen.

Most people have been "dropping" their prices from an already overinflated sense of appreciation. They anticipated 10% appreciation, priced that in, it didn't move so they dropped it back down to the non-appreciation price and think they have done everyone a favor. The fall season is when we will see the first set of price cuts.

This sets off a whole series of economic issues. For example if you are flipped on your home, sure you aren't being tossed in the street as long as you hold on and make the payment, but are you also going to drop big money on Christmas without a HELOC? Are you going to drop big money on Christmas when a reverse wealth affect has you feeling $40-50k dollars poorer or mentally tolerating being flipped $25-30k on your home?

This is why you have seen Wall Street not just kick the hell out of certain subprime mortgage companies, you have started to see them kick the hell out of retailers. Again we already see slow down, but not negative growth. People are currently holding on just fine and hoping some good card turn on the river but the rest of us know the odds.

So Spring 2008, Christmas is officially declared to have sucked, we will have the second year of no buyers returning, people will have clamped those wallets shut and recession will be here.

Laugh away,

Nick

So...how did I do?

Buffett, economy in recession

Quote:
Billionaire Warren Buffett said Monday that the U.S. economy is essentially in a recession even if it hasn't met the technical definition of one yet.

Buffett said in an interview with cable network CNBC the reports he gets from the retail businesses his holding company owns show a significant slowdown in purchases.

The chairman and CEO of Omaha-based Berkshire Hathaway Inc. said millions of people have also lost equity in their homes because home prices have dropped.

The technical definition of a recession most economists use is two consecutive quarters of negative growth in the nation's gross domestic product.

"I would say, by any commonsense definition, we are in a recession," Buffett said on CNBC.

I think I did pretty well.

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #75 of 77
Thread Starter 
So now how did I really do?

Nice list of previous recessions there too.

"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell

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post #76 of 77
Quote:
Originally Posted by trumptman View Post

So now how did I really do?

Nice list of previous recessions there too.

You did well.
post #77 of 77
Quote:
Originally Posted by vinea View Post

You did well.

I feel good about getting completely out when I did in all cash (i totally forgot about this thread)

Some of my friends are down 40-50% ish.

No one listened to me and Peter Schiff. \
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