Four Takes on a Broken Economy

Insane bullishness. There is a panic to buy equities. Bearishness and the depression were forgotten in a week! Look at the equity put/call ratio. It is at a level recently associated with short term tops.

Astonishing - scenes from the recession:

• I have seen residential lots like this sell for $1000. They cost 10x that to create. Loss severity.
• See this picture? It is really expensive to get rid of those weeds. Loss severity.
• The future of car dealerships: auctions being held in these car storage spaces at ports.
• Is this bullish for Best Buy (BBY)? Bigger piece of much smaller pie.

What do these four pictures have in common: they describe completely broken sectors of the economy - housing, autos, and retail.

Have you heard any plans to fix the auto industry? Not prop it up, but figure out how many cars a non-bubble economy needs annually, and then figure out an economical way to produce that quantity?

Comments

[Allan Frain:]

When we stop printing money and diverting wealth from productive to non-performing THE MARKET will determine how many cars we need.

Mar 20 01:10 PM

[drbob66:]

"It is really expensive to get rid of those weeds"

Try Roundup.

Mar 20 03:38 PM