Since Were Talking Economy Here:
First of all, I have no long positions except the gold etf GLD. I have been short housing,
financials, nasdaq, sp500, china for the past 4 months and my previous posts will reflect this...
I have no hidden agenda so I really dont care if you buy or sell this mkt.
What I am commenting on is this...I totally disagree with anyone that thinks this is your run of
What I am commenting on is this...I totally disagree with anyone that thinks this is your run of
the mill mild recession...ultimately this might turn out to be the case since I dont have a crystal
ball(a reliable one anyway) but odds are favoring something that we wont recover from in a
quarter or two...here is my reasoning....ok, if youre looking beyond 2 yrs Im sure we will recover
at some point but I think the mkt will be in general be very choppy but down for rest of the yr
Why has the mkt gone up the past 5-10 yrs???...to me the overwhelming evidence points to the
Why has the mkt gone up the past 5-10 yrs???...to me the overwhelming evidence points to the
american consumer taking on debt and removing money from a grossly inflated housing mkt...
money they didnt have...the numbers show credit card debt at historic highs...people took billions
of dollars out of their homes with refi's, helocs and etc...this is a fact that cannot be denied...are we
really making any more money?...dont think so...so where is all the money coming from?...
think about it.
So where is credit right now???...credit is tighter than ever!..while the Feds bring down rates it
So where is credit right now???...credit is tighter than ever!..while the Feds bring down rates it
isnt being translated to the avg american...the banks are keeping the spread...banks are lowering
credit card limits and raising rates even for people who pay on time and have excellent credit
scores.
I hear pretty much everyday now how professional traders and finance people saying "in the
I hear pretty much everyday now how professional traders and finance people saying "in the
past 30 yrs I have never seen anything like it"...ARS auctions are failing...ARS's have been
sold as money mkts...many people cant get their money out of ARS's because the investment
banks wont support them...this is very significant....did you know muni's are paying 5.5%??...
since there isnt tax implications with munis its like handing out 8-9%!...why would anyone invest
in the stock mkt when safe munis are paying this much...even Bill Gross of PIMCO buying up
munis right now...cities and states paying huge rates to get money right now..
And I dont have to go into the bond insurers because everyone should know this story...
And I dont have to go into the bond insurers because everyone should know this story...
yes if they get downgraded all the munis they have underwritten in the past get downgraded
too...what does this do to the cities and states that have to pay more to refinance?...and
you really think with the exposure ambac and mbia has with CDO's that they are deserving
of a AAA rating that S/P and Moodys just handed out???...that is a joke...what other company
whose stock price goes down by 90% in 6 months can you keep a AAA rating?...the govt and
financial institutions are artifically elevating these ratings because if they dont, they will take
another 50-100B in more writedowns.
And what about the FED...since they dropped .75 and .5 in Jan the mkt is down...the FED is
And what about the FED...since they dropped .75 and .5 in Jan the mkt is down...the FED is
printing fictitious money for wall street and not for you and me...they will do anything to maintain
the charade(ie-false growth)...printing more money WILL bring on inflation as we have seen...
CPI and PPI are rising very quickly...even Larry Kudlow the Bush cronie is concerned and thats
saying something!...how can wheat be up 170% and oil 65% in the past yr without inflation?...
((roughly)) in the past 4 yrs, copper up 400%, gold, 300%, corn 300%, soy 300%,,...get the
picture???...only thing thats down is products from China ...the govt is printing money and
weakening the dollar so fortune 500 and global co's can make more profits due to the
weakening dollar from overseas sales...I dont think lowering interest rates will help the avg
person...why is it that big successful co's are sitting on billions is cash right now???..they
are only buying back their stock, thats saying something...are they developing plants in the
US???...nope, they are pouring money into foreign mkts...they are taking jobs out of the US
...we are eliminating the middle class in the US and this will ultimately hurt us because imho
in order to have sustainable growth in the US we need more and better paying jobs...our
fortune 500 co's are taking mid paying jobs away from us...the ones making 150K plus and
30K and less not affected as much...its the 40-80K people getting hurt...why pay a US steel
worker 20-30 dollars/hr when someone in china or mexico will do it for 2.00???...look at
Ohio as an example...thats why Hillary and Obama want to take another look at NAFTA.
Anyone see the equity of top financial institutions in relation to their exposure to complex
Anyone see the equity of top financial institutions in relation to their exposure to complex
derivitives and etc??...they tried to hedge but when the co's that they hedged with have
imploded their hedge no longer exists...why else would they sell out to foreigners at such
a furious pace?...they are desperate...we are coupled to a housing mkt way beyond we can
imagine imho...and people saying that prices havent gone down in my neighborhood are
kidding themselves...I live in an area that is 1 of only 4 cities where prices have supposedly
have not gone down yet...but there are houses(20 in my neighborhood) that havent sold in
1-2 yrs ..they are marked down 20-25% from the high now...thats reality....the NAR numbers
put out by realtors.
But bottom line is this, over past decade, where did the money come from to fuel our economy?
But bottom line is this, over past decade, where did the money come from to fuel our economy?
..and does this money still exist?...I say no...I think we will have new standards with respect to
lending/borrowing, how we handle accounting and risk...I dont think the fincial system will
ever be the same imho.
