For the rest of us, the stock market is cheap on a price-earnings basis, profits are fabulous, Mrs. Clinton and Mr. Giuliani are far from being socialists and in the long run, both here and abroad, stocks are a lovely place to be.Even the gods get one wrong from time to time.
Update: Wierd truncation. Here is the linky thingy:
http://money.cnn.com/galleries/2007/fortune/0708/gallery.crisiscounsel.fortune/13.html
60 comments:
First!
First! It is a great place to be, for them. They are privy to when the money maggot truck will arrive.
Damn you slmg, I'll get you back for this. Murst!
SLC,
Long time and certainly unexpected.
RD,
I keep my eye over here from time to time. Certainly not as interesting and crazy without Casey talk though. Oh well, he was too much of a distraction.
NS
I couldn't resist the first. It was out there calling to me...
Don't you have some koi to feed, or some pleather to dress?
Edgar, thanks for taking the extra time necessary to think up such a witty, original comment.
Frankly I'm surprised seeing as the last thing Casey had to say on the matter was that SLC was involved in the RCS criminality. I have tons of circumstantial evidence. IP traffic SLC to San Franscisco. Inquiries from then current employers of his concerning questionable traffic. Many, many anon tips. I knew the very accusation could ruin someone so I was keeping quiet. That's why I'm surprised.
Are you saying what I think you are saying Rob?
So eh...how much is it gonna cost to buy a tell all ebook? Hell just give me some juicy insider information? you know I have the money to spare!!!!!!!!!!!!!! C'mon Rob!!!
@Ben Stein (I know he doesn't read this blog, but bear with me): "What he does not see is that the Fed is always either adding or subtracting liquidity and that recent moves are tiny in the context of a nation with a money supply in the range of $12 trillion."
And what the virtually all the analysts have not seen--Doug Noland excepted--is that the credit market has been creating money-like instruments which have dramatically increased the virtual "money" supply. The problem is that that dynamic works in reverse, and just as the credit market has created enormous amounts of virtual "money" out of thin air, it is now destroying it just as quickly.
Quite simply, the Fed is no longer in control of the process. The Fed is like Maggie from the opening sequence to "The Simpsons", turning the play wheel and honking the play horn, but the credit crisis is now driving the markets.
"The first three of these were times of seriously flawed monetary policy that allowed stagflation"
Seriously flawed monetary policy? Check.
"The subprime and private equity and hedge fund dogs may bark, but the stock market caravan moves on."
Subprime and private equity and hedge funds aren't dogs lining the side of the road; they're the oxen that have been pulling the stock market caravan, and they are on the verge of collapsing.
Ben Stein, who is otherwise very intelligent, does not get it, but he can take comfort in the fact that he's not alone. The economy has fundamentally changed, from a productive economy to a consumption economy, headed up by financial leadership whose only objective is to expropriate its wealth. Until the U.S. economy returns to productive use of its capital and until its leadership is replaced, there is the very real likelihood of a financial meltdown which will ruin those who have trusted the markets with their wealth.
Wow, a Friday, but just like old times. With ciminal accusations, character destruction, threats of career decimation. So what time is the 2 minutes of hate/the 120 minutess of hatecast?
One general comment on the markets, I think we're at a "breathing point", where the markets will collectively catch their breath for a few days. My expectations are for lower volatility and a slight bias to the upside for the next week.
This will likely develop in stages; the action over the last few months has focused on the most leveraged, speculative players. Next up the focus will be on the effects on the core financial companies; I see that as developing over the next couple of months. Third stage will be the effects on retail and consumption, but that may not unfold until later this year, early next year.
Let's just say that this is far from over.
Ben Stein's article was one of thirteen articles. Some of the other articles were pretty good. I thought his was a nice touch of comic relief at the end.
@Peripheral
I agree it is far from over. I suspect the volatility will pick up again next options close (the week prior to 9/21)
When the bubble burst in early 2000, the optimists said not to worry. After all, Internet stocks accounted for only about 6% of total U.S. equity-market capitalization at the end of 1999. Unfortunately, the broad S&P 500 index tumbled some 49% over the ensuing 2 1/2 years, and an overextended corporate America led the U.S. and global economy into recession.
Stephen S Roach (Article 9 in the Ben Stien Series)
So...what does one do at times like these?
I'm a typical DYI small fry investor, just a few Gs in a fistful of ETFs. I have a little junk silver and some gold and I'm in about 10% cash. I have about 20% equity in my home and a nice 401k balance (actually, I am sure it's real ugly right now-- I haven't looked in the last week) and I don't know much about puts and calls or other sweet arbitrage moves...
Honestly, I don't have a great idea of where to go right now.
Do I sit on the cash?
Metals?
Sweet house in Sacramento?
I like stocks generally, and I have a 30+ year horizon and good risk tolerance, but jeez...I am uneasy watching "Helicopter" flood the market, cut rates, and bail out the "too big to fail" set.
With all the market manipulation (global manipulation, really), what's the conventional wisdom at a time like this? Do I load up the bunker with food and ammo? I would love to hear what others are doing...
Hey Kidz,
Where did Nigel go?
Well, I've been too busy for sweet new porn finds, but I do have a new 6 Degrees of Casey Serin game to play. Woohoo!
@NHSteph
When the market is this unsettled Cash is not a bad place to be. I might try some gambling with puts in the coming year, but I suspect I will be 100% cash for the next year.
Long term Ben Stein's advice is pretty good. It is just right now where the market obviously has some serious corrections to make that I do not like it.
@serinitis
Thanks...that's where I am right now but only out of paralysis =)
My only fear with cash is that the dollar is going to become the new ruble or lira and I'll be using my whole 401k to buy a gallon of milk.
There is a good chance of the dollar declining. Fortunately for you, your expenses are in dollars as well so milk will cost the same. New electronic toys may cost more but most of us can survive with our current toys just fine.
Oh, true. I guess my "wheelbarrow of money" scenario would involve inflation, which the Fed has vowed to avoid...
Ho Ho Ho - It's Santa Flipper Clause
Santa is off to Tibet for eight weeks.
I just wanted to thank all of you for the fun, ridicule, insightfulness and general debauchery over the last several months.
Thanks Rob Dawg for being a wonderful host.
Santa F. Clause
What, are we havin' an imp-prom-too™ reunion here tonight, or what?
he he he
I actually enjoy (maybe that is too strong a word:) times like these where market volatility is high. I'm an asset allocation type of person, mainly index funds held in my 401k and wife's IRA but some stocks too. To me this is a test of my convictions, it is fine to answer questions about what you think you'll do when the market declines but to actually live through it is a very good test. I'd be interested in what others think.
Holy Mackeral. Nice to have everyone back.
@Santa Flipper Clause,
8 weeks in Tibet? Lucky you (now I can really feel sorry for myself for being stuck in jury duty for a month). What will you be doing?
Ho Ho Ho - It's Santa Flipper Clause
Attempting to summit Cho Oyu
Santa F. Clause
On the put action...becareful with CFC. Word on the Street is that someone over there may have been smart enough to short the ABX in time to offset some of what is going on right now.
That doesn't mean CFC won't shit itself all over the Street even more than it has, just that it might give you a run for your money before it does. LEAPs anyone?
Nice to see the Pound back in action on a Friday.
TGIF
Thank
God
It's NOT
Fliptard Anymore
Miss hanging out with you scoundrels...not so much Swabtard Koi-Boi though...
Top subprime mortgage lenders
Rank Lender Location Q4 2006 originations, in billions
1 HSBC Finance (HSBC) Prospect Heights, IL $12.3
2 New Century Financial Irvine, CA $12.2
3 Countrywide Financial Calabasas, CA $10.1
4 WMC Mortgage (GE) Burbank, CA $9.0
5 First Franklin (Merrill Lynch) San Jose, CA $7.8
6 Wells Fargo Home Mortgage San Francisco, CA $7.4
7 Option One (H&R Block) Irvine, CA $6.1
8 Fremont Investment & Loan* Santa Monica, CA $6.0
9 Washington Mutual* Seattle, WA $5.7
10 CitiFinancial (Citigroup)* Baltimore, MD $5.0
Hmmm, gonna be watching these for potential shorting ops:-)
I love how short people's memory is. In 1999, Tech stocks accounted for 6% of total market cap yet the S&P craterd nearly 50% even though tech firms were a "small portion".
It's all going down the crapper...
good luck Legion, you should make a killing.
Ummm good luck trying to short New Century. ;-)
I'd guess either WaMu or Wells Fargo.
Personally, I think Santa Flipper Clause has his reality framework more in order than the rest of you guyz.
A Cho Oyu summit is a far more inspiring vision than the usual numbers.
@Santa Flipper Clause, hope you'll return with images for the rest of us.
P.S.
I provided some sweet porn updates on the Zillow Book plog.
Personally, I hate John Travolta.
@akubi 9:24, 9:26 and 9:27
Are your posts some kind of long time insider references or a manifestation of bi-polar disorder?
My sense is that they are insider humor but the posts are super confusing to newer readers of RD's blog.
Would you care to inform newer readers or are we eternally doomed to newb hood since nobody seems to respond to your posts?
Confused and curious.
Thanks in advance should you have time to respond.
Well here's an easy way to see which of those lenders are in trouble...each week, I MINE my snail mail to see which one of those guys has sent me golden nuggets asking me to either refinance, open a new platinum credit card with them, or pull out some equity...the more frequent the mailings, the higher they go on my meltdown screen as I figure they are now trying to juice some of the credit worthy people to take out large loans that they CAN pay back, to support the people that can't.
Highest mailing in the last month, or last few months.. WAMU.
Ok, looks like NEWC already beat me to the punch...filing bankruptcy and all, oh, but who agreed to give them some dough..why citgroup who at the time April 2 2007 was around 53 dollars. Where are they now 4 months later...35 dollars...oh yeah..there is money to be made with these guys.
please email me porn.
I really love the term "People are just walking away from their homes and mortgages"
yeah, with like 50 arrows in their ass.....
They make it seem like it's a cakewalk, no long term repurcussions, no taxes being levied on a 1099, and that you can just go out and rent no problem.
[link]
That link is reporting the obvious...
Hey Legion, I'm with you on the snail mail thingy. I've been getting slammed with friggin' WAMU crap for weeks now. It doesn't stop. I already have a platinum card with them with a $16,000 credit line and they're trying to get me to add people, sending me the blank checks etc etc. Crazy bastards.
So yes they do look like future tasty shorts. And when the market starts to shake off all these good feelings and reality begins to set in once again, oh my. Cha-ching.
@Dawg,
There is a sobering study on mortage resets, equity, etc. under this link....
http://www.firstamres.com/MPR2007
Enjoy.
@Curious,
To respond to your questions...
9:24: A simple response to Santa Flipper Clause's trip to Tibet.
9:26: New hot babes seeking Zestimates on Zillow Book (my sweet porn blog).
9:27: John Travolta was on television.
Well, I admit I check out Akubi's Zillow Book blog for the er.....articles and stimulating reads.
At TK, Capital One does the same crap with me, just not with as much intesity as WAMU.
I already have a platinum card with them with a $16,000 credit line...
Wow, I'm impressed. Typical.
@Legion
Ok, looks like NEWC already beat me to the punch...filing bankruptcy and all, oh, but who agreed to give them some dough..why citgroup who at the time April 2 2007 was around 53 dollars. Where are they now 4 months later...35 dollars
I wonder what mechanism that Citigroup used to loan the money. Convertible bond that are in first order of succession?
@Edgar
Well he said he had a credit line of 16K, not that it was used:-)
@BJ
Separately, New Century said CIT Group Inc (up $0.67 to $53.98, Charts). and Greenwich Capital Financial Products have agreed to provide up to $150 million of debtor-in-possession financing to keep the company in business as it reorganizes.
Who knows how they sunk money into em.
At 2:40 PM, Legion said...
Well, I admit I check out Akubi's Zillow Book blog for the er.....articles and stimulating reads.
Thanks for checking out my deep thoughts and stimulating reads ;). Do they have BofA in Montana? I assumed they were everywhere and bought everything, but for whatever reason there are no BofAs in any part of Wyoming I've visited (WFB everywhere). Never been to Montana.
All I know is I've personally requested no junk snail mail, email, telephone calls from all of the stupid ass corporations yet they refuse to listen (if you deal with them on any basis the BS marketing is apparently acceptable). I DO NOT WANT NOR NEED their high percentage credit checks in the f-ing mail (which are a serious identity thefty liability), but NO they don't f-ing listen. I DO NOT WANT stupid ass SNAIL mail. I DO NOT WANT Green Eggs and Ham.
Akubi- www.greendimes.com
they claim to eliminate almost all unwanted snail mail.
Haven't tried it - thinking about it.
@Akubi
No bank of america in montana, but I had problems with them a while back so they can shove it.
And yeah, now that I am living large they are all over me with their damn mail..not as much as Wamu, but I think Wamu is headed for some big trouble. Even that guy on the commercials looks worried...:-)
@Edgar,
Thanks for the link, if the chick in the picture was a bit more emaciated, I would have thought it was Casey with a pony tail.
Good read on how the REST of us are now suffering with credit because of lenders and cretins like Casey.
@Rebecca,
Haven't tried it either, but it looks suspicious.
I generally distrust .COM addresses.
@Legion,
Wamu has never been a financial institution I’ve involved myself with. I started out with WFB and ended up thoroughly pissed off with them in the late ‘90’s so switched to BofA and find their ATMs are everywhere I go except for Wyoming...and apparently Montana too (per your comment). What’s up with that? As I understand it, they were both started in SF, Ca.
Well I closed an account with them like 7 years ago, paid of like 1000 that it was overdrawn by, and three years later on the chex system they said I hadn't paid. Well that took like a day to sort out those douchebags, and I actually had my current bank talk to them to confirm it in front of me. Thank Goodness for my power team of bankers, lawyers, blah blah blah lol...
All other issues aside, BoA has acquired MBNA who are pretty evil. They're notorious for preying on college freshmen. Right now they're setting up shop on campuses across the country.
Maybe things have changed but their routine used to be to wait until the mark built up a healthy balance, then conveniently forget to send a bill. Once a payment was missed the default rate kicked in. I didn't fall for it, but some of my friends did.
I've told my alumni assocation on more than one occasion that I won't donate through them until I pay off my student loans and they drop their association with MBNA.
Hey Dawg
Glad you liked the link so much as to make it a thread onto itself.
As mentioned, it is part of a dozen views from some pretty smart people.
My only issue is they don't have the date they did the interview. A lot has happened in the last month and I don't mean G telling KC to pound sand.
It is important to look at other views so as not to get caught blind by following a herd. Any herd.
Back there all you see is @ssholes...
I have a life filter that says nothing is a good as people say, nor bad as people say. With the reversal starting, we may see some overcompensation because of the media.
Yes the long term trend looks to be a cool off period as bull markets cannot run forever. But with all the SELL SELL SELL screaming going on, it is good to balance with insight from non RE shills.
And while the stock market may take it in the shorts, it does not mean complete meltdown. For the example of the tech blowup in 2000, people still bought gear, just not at the insane volumes before the crash. Yes some companies went under, but in another time, those companies never would have made it out of the starting gate to begin with (buy dogfood via the internet??).
Ditto RE. I can remember in the 90s when they said it would take 30 years to clear the excesses. Boy were they wrong on that one.
Just because we cannot see the next big thing coming does not mean trends stay the same forever.
H.
Oh sorry. In all the things I get tipped or exposed to I must have not realized it was your "find." Good job, thanks, hat tip all that.
Everyone has been warned. There's no excuse for not knowing what is about to happen. Housing, stocks... ASSETS.
Worth a read: Counterfeit Nation - America’s reliance on dubious credit goes all the way back to the country’s founding.
If KC said SLC was involved in RCS, then that must make it true, huh? KC would never BS, lie or talk out of his butt...
@Akubi:
Thanks for the find, very interesting read. A George Washington biography I read indicated fairly clearly that there were serious shenanigans in the credit markets even following the Revolution. It's our core values that have made us great as a nation--hard work, patriotism, family values--and speculation and credit!
@Endgame:
I'm offering no insights on the ugly RCS episode, other than to note that SLMG disappeared rather quickly after the RCS episode was brought up--too quickly for me to ask him what he thought about how the $500k+ real estate business in Utah is doing (150 sales for July vs an inventory in the thousands . . . )
@Peripheral Visionary
I’m glad someone enjoyed it. If it’s anything like the article, the book should be interesting. I particularly like the panic of 1837 quote he chose for the last paragraph:
As he surveyed the wreckage of broken banks and worthless paper, he came to a surprising conclusion. “If all the profits of the years of healthy credit were added up,” he wrote, “and the balance sheet struck between that and the loss at the explosion, the advantage gained by the credit system would still be found to be great. The advancement of America depends wholly upon it. It is by credit alone that she has made such rapid strides, and it is by credit alone that she can continue to flourish.”
The more things change, the more they stay the same...
Post a Comment