Sunday, March 15, 2009

Not Even Close


People have been asking about a bottom. We aren't even had the spanking yet. Then comes the crying and the pain but no doubt in time the lesson will be learnt and subsequently forgotten.

What do we need to see? A return of honest corporate earnings. An end to government plans. No more of these 10% monthly changes in economic indicators. That means oil prices, port activity, auto sales. That means plus and minus. That means foreclosures, home prices, jobless claims. We are still digging the hole. By mid summer the fine folks in Washington D.C. will be discovering a new concept. New to them that is. There are limits to government. That will be a good first sign.

31 comments:

Akira said...

Murst!

Rob Dawg said...

Leave it to Ak to be murst on a spanking thread.

soem dood said...

I don't know sh*t from shinola about the economy or finance, so I'm gonna stake out some unclaimed turf here:

Most downturns I can remember some wag eventually bellied up to the bar and started talkin' about a 'soft landing' -- upon which the economy promptly dropped precipitously off a cliff...

So I am gonna be a contrarian here both to what EVERYONE thinks, and also my own rather cynical nature and predict a "Soft landing" for our own little depression here.

Bernanke just escaped an encounter with 60 Minutes suffering nary a bruise, last week was a bear market rally, and they are finally coming up with a plan for the toxic assets. Ponzi schemers are goin' to jail, Lehman and all that is a distant memory, and they are disclosing AIG counterparties -- It's the French? BWHahahahaha -- I say screw 'em, leave 'em holding the bag... Surrender monkey bahstoods.

Everyone says we have more pain to endure, some say 50%, some say we will never come out, some say we need to shave off another 25%... etc.

I say outside of a few 5% zigs and zags we have already passed the bottom and it is gently up from here over the next three years -- with fits and starts as some of this unwinds and home market stabilizes, and we SLOWLY recover from double digit unemployment.

Akubi said...

Yeah, Happiness is a warm AK.

Akubi said...

There always seems to be a certain point in which poetry, economics, politics, philosophy, Super Markets, whatever merge to the point of The Ongoing Insanity of Everything(tm).
While I was asleep last night, Mr. Serling reminded me that this is just another silly rehearsal.
Hopefully, he isn't a Scientologist.

Akubi said...

It's the French?
Isn't that Lou M's ongoing theory of Texan sillyness?
Yeah, we're pretty screwed, but Mr. Serling says I have another chance in the next life.

w said...

soem dude, there will be no bottom until state and federal governments deal with their deficits. They are still in the discovery mode.

serinitis said...

@W

Government running deficits is key to getting out of this. It worked for Ronnie, FDR, and just about any other president that had a downturn to deal with

segfault said...

serinitis,

Government running deficits is fine until no one will buy the notes issued by the government.

Rob Dawg said...

Serinitis,
This is just another case of "this time is different." Spending, even deficit spending softens recessions. This time is different because this isn't just a recession, the spending being done is maintaining the status quo not being stimulative and we don't have the necessary credit to borrow enough.

w said...

I do not feel stimulated by the State of CA running a deficit.

serinitis said...

I agree with you on this time it is different. Unfortunately, I believe we will solve the credit issue by printing enough to inflate our way out.

w said...

serenitis, I respectfully disagree.

There is a lot of debate as to whether FDR achieved much with his spending.

I think Reagan benefited more from taming inflation (maybe he was lucky and it just happened on his watch, but who cares) and getting to ride interest rates down. As rates drop the economy heats up. Also, didn't he run deficits to allow oppressive tax rates to drop?

Everything is aligned against us now.

Interest rates
Immigration
Demographics
Retirement losses
Home price to income ratio

I think you are right that inflation is the only solution as bad as that is.

Bill in NC said...

Oh, I think a few bondholders are going to be SOL as well.

That's another way to shed an unmanageable debt load.

Quite a few munis are going to be down-rated, to say the least.

Rob Dawg said...

Whatever you do don't own any callable munis above par. Actually most double tax free munis aren't looking very attractive.

Lou Minatti said...

I just think it's cool that the government of California continues to add state workers to the payroll, even during this budget crisis. Your elected representative are the best!

tj and the bear said...

Rob,

Everyone's oohing and aahing over the latest earthquakes and yet fail to see that they're all foreshocks. "The Day the T-Bill Died" will be one for the ages, no doubt. The only question is, of course, when that happens.

Rob Dawg said...

TJ,
Saw you post on CR. Will do if it comes over.

Yes, Bills, notes and bonds. When the long bond explodes all tthat short paper wil come due right on schedule and won't roll over. Chaos.

tj and the bear said...

Catch that comment on CR about Vallejo's BK? If that's true than all hell's going to break loose in CA. Another question of "when".

tj and the bear said...

ARGH!!! Make that "then".

tj and the bear said...

p.s.: Loved the "mass transit" exchange documented on the earlier thread.

sm_landlord said...

Rob, it's all good for TJ. Check your mail. Thanks!

cedarpine said...

Did you ever post your ideas for Phase IV?


Did I miss it?

Junior said...

ZOMG you mean the Dow up .00000001% in 3 days doesn't equal a rally?! That wasn't the bottom? What trickery doth thou possess??

I can't believe people even had the audacity to imply that was a bottom.

Bottom is going to hurt. We won't need to ask "are we there yet?" - certainly our asses hitting the ground at full velocity will be a good indicator.

Tav said...

I'm not really dead, bitches. I'm alive and well.

Unlike what was posted at Rumors of Tav's death have been greatly exaggerated, I do not work for or never worked for Burger King (no disrespect meant to those that do work there).

It looks like caseyhaterz and caseypedia are down. Good riddance.

Tavington always wins in the end!

serinitis said...

@Tav

Caseypedia is still up.


P.S. Keep trying. Burger King has a lot of turnover and eventually they will hire you :)

Tav said...

@serinitis:

The 'pedia was down the other day, I just forgot to check again. But the 'haterz are still gone.

I bet you thought I had really killed myself, didn't you?

I fooled you all!

Property Flopper said...

File this one under "Wow... just wow!". I'm not sure what else to say.

Found on Craigslist:
Homeowner seeks partnership with my property

Times are tough right now. I've owned my home since 1989 and now my idea is to find a friend to invest something 100K, get on the deed, and share my home and expenses and lower the mortgage. I'm a wonderful person and I never want to lose this home, as I've put a lot of energy and love into it! I owe 330K and the values have gone down so much, and bought it for $147.9. So if you need a tax deduction, I'll give it to you. I cannot use the deduction right now and my loan is interest only until 2018. Thanks a bunch.

Link:
http://sfbay.craigslist.org/nby/stp/1070600060.html


Prime example of using the home as an ATM - owned the home since 1989 and they owe more than twice what they bought it for. They are having a hard time funding the interest, not even touching the principal.

Yeah, I want to dump $100k into a property that would STILL have negative equity. What a great investment!!!

lawnmower man said...

I bet you thought I had really killed myself, didn't you?

No, Tav. We just hoped you had.

Rob Dawg said...

TJ,
Your email bounced. I probably screwed up.
Again please; techscan (little at thingy) yahoo com.

Tav said...

@lawnmower man:

Thanks for the compliment. It's heartening to know that I've created a character that people online have wished death upon.

:)