Housing Bubble, credit bubble, public planning, land use, zoning and transportation in the exurban environment. Specific criticism of smart growth, neotradtional, forms based, new urbanism and other top down planner schemes to increase urban extent and density. Ventura County, California specific examples.
Thursday, August 16, 2007
Today's Top Story
Brown, J. R. ‘THE MONEY MARKET PANIC IN AMERICA: SCENE AT THE STOCK EXCHANGE, SAN FRANCISCO’
Any Guesses?
I'm not being lazy. We all know what we have to talk about and a clever picture isn't it. Update: Clever picture by demand.
I think the broad indices are already in correction territory, it's only a matter of time before the DJI joins them. The Asian markets got hit with back-to-back drops, 6% drop in Indonesia in *each* of the last two trading sessions. Things are tame here in the U.S. by comparison.
The other developing story is the unwinding of the yen carry trade--the yen is melting up against the dollar at precisely the same time that the securities purchased in the trade (typically MBSs and CDOs) have been melting down. From the Department of Easy Predictions: more losses from hedge funds about to happen.
With respect to market panics, I was interested to read that some of the most serious problems George Washington had to deal with as President were related to rampant speculation in real estate and in the credit markets. It warms the heart to know that speculation and credit go to the very foundations of the U.S. :).
What about investment institutions like ETrade, which has fallen 20% today alone. Are they going to survive? What will happen to the folks that have their money invested in their trading accouts, IRAs, MMs, etc?
I "like" E*trade. I'll like it even more in 3-6 weeks. There's two things going on. There's the business and there's the stock. It will be a while before anything like frozen accounts and liquidation occurs and it won't be in innovators like E*trade. IMO which is not now nor ever investment advice.
I knew the wolves were going after E*trade next. And remember there is a lot of that going on. Bears have been starved for a freakin long time.
I'm also smug about gold. I don't know if I mentioned it but my futures broker tried to get me to buy Oct gold in anticipation of a run up and I told her that I thought gold would tank as people needed to liquidate positions. Gold is anti-cash and right now people need cash to cover and unwind positions.
Oh and how about a big EN howl for my thread subject? Made this last night, put it up first thing. I knew there wasn't going to any ppt or good news.
My reasoning was like Billy Ray Valentine's. The hedgies got 10,000 withdrawl requests last night in their in-box. They only have 45 days and needed to start today. Nobody wants to own stocks going into this weekend and all the retail ants like me didn't want to do the elephant dance on a Friday in August.
I'm laughing. The squawking heads are "explaining." They have no clue. Like I said earlier about Maria B all but calling a bottom at the technical 10%.
Alright. Apple down 7% finally. CFC down 25% That's ANOTHER 25%. Almost exactly 1 year ago I was uncomfortable with 10,800. Who is so fuggin STOOOPID that they think this market one year later is worth 15% more than that? There, I said it. This market won't even have removed the mania for another 1,800 points.
Okay, the close. I have no idea. Up or down or at these levels on exaustion? Wild guess and don't hold me to it because I won't be proud if I guess right down 380 on close.
Holy crap, CFC has lost 50% of it's value in a little over a week! This is sad, really really sad...a lot of people are going to be hurting because of this. Unlike the dot.com implosion which was buoyed with the just sttarting housing bubble, in this case, there is NO other bubble to jump to. This is going to hurt...everyone.
Oh and Rob, like you I cashed out a while ago, the market wasn't making sense...cept for CFC which I had a feeling was gonna crash and burn. I am ALL out as well right now. Gonna wait until there is a little more blood in the streets....
How would you like to be the stockbroker who talked a client into buying CFC last weekend with "It is at bottom & the problems are contained".
Myself, I say -250 at the end of the day. I noticed at 1 pm the prices started to stabilize. I think the pros are back from lunch. Got crazy for an hour there.
On such carnage, the pros will try to stage a late rally and pray it continues tomorrow morning.
Solid stocks are weathering this. Well I don't understand why Boeing is getting hammered. They just got 2 more airlines to commit to buying new yesterday. All I can think of is investors think their interest costs will go up because of the credit market drying up.
You can bet Warren Buffet is sitting in Omaha saying "When will these jack@sses ever learn".
2nd time in 8 years talking heads called him a fool only to find out he was correct all along.
Looks like someone is trying to prop cfc up by bringing it back to 16.90...that won't last long, it's gonna keep falling again soon. Too much momentum.
Boeing won't be able to make enough airplanes to meet demand. How'd you like to AirBus? The dollar is down, energy is down, the new Boeing planes make sense. Boeing is one of the very very few babies in this bathwater.
Rob wins a point on the gold prediction. But I'm still hanging onto my gold position :P. It's up solidly since when I bought it three years ago or so, and when money starts trickling back into the marketplace, I think it'll rebound. I'm not one of those gold@$2000/oz people (though I'd be happy to be wrong on that), but where else am I going to put my money, into a money market account?
Long term I will be looking for an entry point into a diversified overseas fund (possibly a Japanese market fund--I hear they have a real economy over there), but I'm waiting for the aftershocks from the U.S. mortgage meltdown to subside before I do that. Time to be the disciplined "investor" (are you an investor if you're sitting on cash and gold?) and wait until the frenzy has subsided.
PV, 2004 gold was a good call too. And I'm probably going to gamble in a week that gold goes to $710 quickly as the dollar declines.
One more point. If you are a hedge fund or somebody else that needs to raise cash to meet redemptions or reserves then you are selling the Boeings and Apples because you don't want to admit you've bet big on DHOM or HOV. Besides Boeing and Apple are where their money is and they need money.
I don't think it's the PPT as much as it's the SCT (short-covering team.) Too many people short means that upturns can be self-reinforcing, with prices racing upward as the shorts cover and/or get squeezed by margin calls.
This market could turn down again, but it isn't looking like Black Thursday; a lot of stocks have actually been positive through much of the day, even when the broader indices were way down. I therefore dub it, Shade of Gray Thursday.
Smart Dad said... "Looks like the complete collapse of the U.S. financial system has been postponed."
The collapse is a bit further out. My prediction is Q1 of 2009, and it won’t be because of people defaulting on their subprime mortgages. The true cause of the collapse will be people who are NOT defaulting on their ARMs. Instead, they are staying afloat by reducing their spending elsewhere, namely on consumer goods. The retailers will stay afloat in 2008 by balancing their losses with layoffs. But in Q1 of 2009 they will have run out of enough employees to layoff and will have to report horrendous results of the 2008 holiday season.
But...don't take my prediction too seriously. I am often Wrong.
Ad on Craigslist - desperate, underwater with a neg am loan and wants someone to trade... give them a place free and clear and take their sinking debt in exchange. Classic.
Sorry you lost your job, but your post angered me. You realize that what you are asking is utterly absurd? Why won't you negotiate a short sale with your lender? Why do you want someone to assume your crushing debt while you get to walk off with a property free and clear? Who wants to wait 20 years for that "million dollar home" promise, when after this washout is complete, nobody will touch properties like yours for years to come?
Man up, assume your debt. BK, short sale, whatever. But don't ask responsible people to own your mistakes.
Just a friendly reminder that it's everyone's job in society to hold up their end. And when you post stuff like this on Craigslist, you ask for it.
Well, thank goodness the markets rallied. It could have been really ugly there, if we had seen any real selling, like, say, the sort of selling we've seen pretty much every day over the last two weeks.
But now the market's found a floor, and it's on to Dow 14,000! Err, whoops, I mean, it's on to Dow 13,000!
There are five trillion dollars out there in the FCBs, therefore, ergo, a stock market crash is impossible. As soon as prices go down a little someone will step in and start buying. Hyperinflation on the way, after a small bump or two.
In theory it would, but the whole system is corrupt. The FCBs, the fed, and the U.S. gubbermint will not stop profligate spending. The housing crash will only serve to hide the monetary expansion for so long. They spent $400 billion on Katrina, another $400 billion on the war. Do you think that type of spending will ever stop? The game is rigged. Until the powers that be of all the great countries of the world stop conspiring together to stick it to the "population" nothing will change. If there is deflation the people will riot, therefore, ergo, hyperinflation. Bank on it.
Hyperinflation can be contained. The Fed is concerned because deflation has negative ffedback loops that are beyond their influence. Germany 1924 or Japan 1991 and be sure they'll pick the former and crush it. Problem is it won't work this time just like it didn't work in Japan 1991. You think my maturing IndyMac CD isn't able to go into Everbanks Viking CD with a few clicks?
So then I take it you are expecting a deflationary $hit-$torm? A possibility, but my loathing of the U.S. gubbermint and fed knows no bounds. IMO, they have already hyperinflated. If any number of players decides to divest itself of dollars prices will go through the roof. Everything is a conspiracy though, so they very well might sit on that stack o cash until hell freezes over.
62 comments:
First
I rock!
And man o man is the economic world spiraling out of control. I can give you an idea for a picture Rob, how the Four Horsemen?
It's starting to look like blood in the streets..
Alright, added a picture of the stock panic of 1873.
Question of the day:
What 40 banks were stupid enough to lend CFC $11 billion?
40 banks betting on a federal bailout?
Our gubermint is hardly in a position frankly.
In other news, today CFC tapped 11 billion in sweet corporate credit to purchase stock in MYNG and GSPG as well as various gold dubloons...
The squawking heads are wearing seatbelts. Maria may be easy on the eyes but the things she says...
All the Dow needs to do is drop 261 points today and we've got our 10% correction from the highs.
I just shake my head and go back to "Buffy."
I think the broad indices are already in correction territory, it's only a matter of time before the DJI joins them. The Asian markets got hit with back-to-back drops, 6% drop in Indonesia in *each* of the last two trading sessions. Things are tame here in the U.S. by comparison.
The other developing story is the unwinding of the yen carry trade--the yen is melting up against the dollar at precisely the same time that the securities purchased in the trade (typically MBSs and CDOs) have been melting down. From the Department of Easy Predictions: more losses from hedge funds about to happen.
With respect to market panics, I was interested to read that some of the most serious problems George Washington had to deal with as President were related to rampant speculation in real estate and in the credit markets. It warms the heart to know that speculation and credit go to the very foundations of the U.S. :).
So does otherwise intelligent people getting their asses handed to them.
Whoops. Down 200.
and still dropping
Slaughter across the board for anything real estate related, including REITs...
...except for PSA, hmmm...
Panic really setting in on CFC last half hour or so.
SRS dipped earlier for NO good reason. Even looks like that one's being manipulated...
@Dawg et al,
What about investment institutions like ETrade, which has fallen 20% today alone. Are they going to survive? What will happen to the folks that have their money invested in their trading accouts, IRAs, MMs, etc?
Rob
just went -304 and change.
Glad I cashed out 2 weeks ago.
OMG, dropping with every browser refresh.....
I "like" E*trade. I'll like it even more in 3-6 weeks. There's two things going on. There's the business and there's the stock. It will be a while before anything like frozen accounts and liquidation occurs and it won't be in innovators like E*trade. IMO which is not now nor ever investment advice.
I knew the wolves were going after E*trade next. And remember there is a lot of that going on. Bears have been starved for a freakin long time.
I'm also smug about gold. I don't know if I mentioned it but my futures broker tried to get me to buy Oct gold in anticipation of a run up and I told her that I thought gold would tank as people needed to liquidate positions. Gold is anti-cash and right now people need cash to cover and unwind positions.
Next shoe; market maker imbalances.
the herd's clamoring to beat each other over the cliff.
TIMBERRRRRRRRRRRRRRRRRRRRRRRRRRRRRR!!!
Oh and how about a big EN howl for my thread subject? Made this last night, put it up first thing. I knew there wasn't going to any ppt or good news.
My reasoning was like Billy Ray Valentine's. The hedgies got 10,000 withdrawl requests last night in their in-box. They only have 45 days and needed to start today. Nobody wants to own stocks going into this weekend and all the retail ants like me didn't want to do the elephant dance on a Friday in August.
I'm laughing. The squawking heads are "explaining." They have no clue. Like I said earlier about Maria B all but calling a bottom at the technical 10%.
Alright. Apple down 7% finally. CFC down 25% That's ANOTHER 25%. Almost exactly 1 year ago I was uncomfortable with 10,800. Who is so fuggin STOOOPID that they think this market one year later is worth 15% more than that? There, I said it. This market won't even have removed the mania for another 1,800 points.
Okay, the close. I have no idea. Up or down or at these levels on exaustion? Wild guess and don't hold me to it because I won't be proud if I guess right down 380 on close.
Holy crap, CFC has lost 50% of it's value in a little over a week!
This is sad, really really sad...a lot of people are going to be hurting because of this. Unlike the dot.com implosion which was buoyed with the just sttarting housing bubble, in this case, there is NO other bubble to jump to. This is going to hurt...everyone.
My guess is down 410
Oh and Rob, like you I cashed out a while ago, the market wasn't making sense...cept for CFC which I had a feeling was gonna crash and burn. I am ALL out as well right now.
Gonna wait until there is a little more blood in the streets....
All levered assest classes are swimming naked.
Yen carry trade has been carried out in a body bag...
OMG things look terrible for CFC. Total freefall. About time. Something tells me Tanface is still enjoying a little summertime R&R.
How would you like to be the stockbroker who talked a client into buying CFC last weekend with "It is at bottom & the problems are contained".
Myself, I say -250 at the end of the day.
I noticed at 1 pm the prices started to stabilize. I think the pros are back from lunch. Got crazy for an hour there.
On such carnage, the pros will try to stage a late rally and pray it continues tomorrow morning.
Solid stocks are weathering this. Well I don't understand why Boeing is getting hammered. They just got 2 more airlines to commit to buying new yesterday. All I can think of is investors think their interest costs will go up because of the credit market drying up.
You can bet Warren Buffet is sitting in Omaha saying "When will these jack@sses ever learn".
2nd time in 8 years talking heads called him a fool only to find out he was correct all along.
"Sell Mortimer, sell sell sell!"
Looks like someone is trying to prop cfc up by bringing it back to 16.90...that won't last long, it's gonna keep falling again soon. Too much momentum.
Boeing won't be able to make enough airplanes to meet demand. How'd you like to AirBus? The dollar is down, energy is down, the new Boeing planes make sense. Boeing is one of the very very few babies in this bathwater.
Legion the CFC ledge in the cliff is probably just the shorts and puts cashing out.
Rob Dawg said...
Legion the CFC ledge in the cliff is probably just the shorts and puts cashing out.
Why what scum !!!!! :-)
Could the CFC demise have to do with those 40 banks?
Maybe they have a deal where the banks get first dibs on the prime body parts and the pros are seeing there is nothing left worth fighting for.
Man thank God I cashed out yesterday, 120 million shares being traded and prices ALL over the place!
Rob wins a point on the gold prediction. But I'm still hanging onto my gold position :P. It's up solidly since when I bought it three years ago or so, and when money starts trickling back into the marketplace, I think it'll rebound. I'm not one of those gold@$2000/oz people (though I'd be happy to be wrong on that), but where else am I going to put my money, into a money market account?
Long term I will be looking for an entry point into a diversified overseas fund (possibly a Japanese market fund--I hear they have a real economy over there), but I'm waiting for the aftershocks from the U.S. mortgage meltdown to subside before I do that. Time to be the disciplined "investor" (are you an investor if you're sitting on cash and gold?) and wait until the frenzy has subsided.
"Man thank God I cashed out yesterday"
Methinks another classic quote from Trading Places is appropriate here:
"What is ya, ignorant!?"
BZH, DHI, and RDN are now up for the day.
Looks like the complete collapse of the U.S. financial system has been postponed.
PV, 2004 gold was a good call too. And I'm probably going to gamble in a week that gold goes to $710 quickly as the dollar declines.
One more point. If you are a hedge fund or somebody else that needs to raise cash to meet redemptions or reserves then you are selling the Boeings and Apples because you don't want to admit you've bet big on DHOM or HOV. Besides Boeing and Apple are where their money is and they need money.
PPT to the rescue!
Thank God I live in Russia!
I don't think it's the PPT as much as it's the SCT (short-covering team.) Too many people short means that upturns can be self-reinforcing, with prices racing upward as the shorts cover and/or get squeezed by margin calls.
This market could turn down again, but it isn't looking like Black Thursday; a lot of stocks have actually been positive through much of the day, even when the broader indices were way down. I therefore dub it, Shade of Gray Thursday.
Smart Dad said...
"Looks like the complete collapse of the U.S. financial system has been postponed."
The collapse is a bit further out. My prediction is Q1 of 2009, and it won’t be because of people defaulting on their subprime mortgages. The true cause of the collapse will be people who are NOT defaulting on their ARMs. Instead, they are staying afloat by reducing their spending elsewhere, namely on consumer goods. The retailers will stay afloat in 2008 by balancing their losses with layoffs. But in Q1 of 2009 they will have run out of enough employees to layoff and will have to report horrendous results of the 2008 holiday season.
But...don't take my prediction too seriously. I am often Wrong.
This is "Retail Risk Aversion Thursday." Tomorrow will be "Wholesale Unwinding Friday." Monday will be cancelled.
Slightly off topic, but too funny not to share:
http://sfbay.craigslist.org/sfc/swp/393348572.html
Ad on Craigslist - desperate, underwater with a neg am loan and wants someone to trade... give them a place free and clear and take their sinking debt in exchange. Classic.
I like how the credit rating agencies lowered CFC's rating after CFC borrowed $11.5B from the banks.
It would have been just that much more expensive for CFC had the ratings been adjusted yesterday or before.
http://biz.yahoo.com/ap/070816/countrywide_ratings.html?.v=2
DJIA back in the black with a couple of minutes left in the session. Short covering gone wild?
Property Flopper:
Had to fire off this missive:
"FB,
Sorry you lost your job, but your post angered me. You realize that what you are asking is utterly absurd? Why won't you negotiate a short sale with your lender? Why do you want someone to assume your crushing debt while you get to walk off with a property free and clear? Who wants to wait 20 years for that "million dollar home" promise, when after this washout is complete, nobody will touch properties like yours for years to come?
Man up, assume your debt. BK, short sale, whatever. But don't ask responsible people to own your mistakes.
Just a friendly reminder that it's everyone's job in society to hold up their end. And when you post stuff like this on Craigslist, you ask for it.
Sincerely,
"Bitter, Debt-Free Renter"
TK -
Nicely put. It will be interesting to see if they respond.
Huzzah!
Well, thank goodness the markets rallied. It could have been really ugly there, if we had seen any real selling, like, say, the sort of selling we've seen pretty much every day over the last two weeks.
But now the market's found a floor, and it's on to Dow 14,000! Err, whoops, I mean, it's on to Dow 13,000!
The CL find was too good to pass up. new thread just to make comments. Thanks to Prop Flop for the story.
So much for the 300 drop in the DOW.
There are five trillion dollars out there in the FCBs, therefore, ergo, a stock market crash is impossible. As soon as prices go down a little someone will step in and start buying. Hyperinflation on the way, after a small bump or two.
Why is hyper-inflation coming if people will begin to not spend money when the banks stop lending?
If free spending money is no more and people dont buy/spend, wont that cause inflation to go down?
Honest question.
In theory it would, but the whole system is corrupt. The FCBs, the fed, and the U.S. gubbermint will not stop profligate spending. The housing crash will only serve to hide the monetary expansion for so long. They spent $400 billion on Katrina, another $400 billion on the war. Do you think that type of spending will ever stop? The game is rigged. Until the powers that be of all the great countries of the world stop conspiring together to stick it to the "population" nothing will change. If there is deflation the people will riot, therefore, ergo, hyperinflation. Bank on it.
Ah, translation please.
Translation: Buy food and ammo.
Hyperinflation can be contained. The Fed is concerned because deflation has negative ffedback loops that are beyond their influence. Germany 1924 or Japan 1991 and be sure they'll pick the former and crush it. Problem is it won't work this time just like it didn't work in Japan 1991. You think my maturing IndyMac CD isn't able to go into Everbanks Viking CD with a few clicks?
So then I take it you are expecting a deflationary $hit-$torm? A possibility, but my loathing of the U.S. gubbermint and fed knows no bounds. IMO, they have already hyperinflated. If any number of players decides to divest itself of dollars prices will go through the roof. Everything is a conspiracy though, so they very well might sit on that stack o cash until hell freezes over.
My bad, I meant hyper-stagflation. Especially if oil supplies become constrained. Low wages + rising prices for necessities.
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