NoFate

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    • Wed Jan 9th 04:26 AM | Rating: 0 0
      Commented on:
      8 Predictions for 2008
      If it was just a single shock to Financials I would agree with you Dan, but there are long term effects that will continue to drag them down:
      1. ARM resets - Take ~6 months to migrate to forclosures. The worst is still coming.
      2. Housing prices are expected to drop 20-30% over the next several years. More and more home owners will become underwater (debt > house value). Many will walk away.

      With a 10+ month supply this is going to take a few years to unwind. In the meantime bank margins get slimmer and slimmer ...and credit becomes harder and harder to get.

      Yes, 2007 was a terrible year for financials. But guess what? 2000 was a terrible year for tech ...and so was 2001 ...and so was 2002. Financials will likely play out the same way.

      At least wait for something that looks like a bottom ...IYF just looks like a falling knife right now.
      View article »
    • Wed Jan 9th 04:01 AM | Rating: 0 0
      Commented on:
      There's a Sale in the Stock Department
      "In fact, in a recent Lehman Brothers report, the firm calculated that the stock market is now at its most attractive valuation since 1974 based on P/E ratios in the mid teens and 10 year bond yields at the very low historical level of about 3.8%."

      Yes, and how is Lehman doing these days? Oh that's right, they are DOWN OVER 40% from their peak.

      Every light is flashing red at this stage ...every indication is that we are going down, down, down. Technicals, fundamentals, earnings estimates, government numbers ...fricken EVERYTHING! For Christ sakes, Bush is even talking about a stimulation package!

      And for some reason you think this is a great buying opportunity? Sure, if you are going to sell again at the top of the next fools rally ...but not if you are the fool.

      When you get a double bottom in 2 years and PEs are 6 or 7 ...then you buy. And that is a real 6 or 7, not ones based on bogus inflated future earnings estimates.
      View article »
    • Wed Jan 9th 03:31 AM | Rating: 0 0
      Commented on:
      Bill Gross: Our 'Shadow' Banking System Needs a Fed Bailout
      Two words Bill ...Moral Hazard.

      Why should the taxpayers pay someone else's mortgage?

      The entire mortgage industry made horribly bad decisions for 5 years ...let them pay.

      Wall Street packaged this garbage and sold it to unknowing buyers as AAA ...let them pay.

      Subprime renters got a great 2% deal for a few years ...now let them rent.

      Let the free markets do their job. Everyone is a capitalist until there is a recession in their industry and then suddenly they want the government to bail them out.

      You are a brilliant CEO and I greatly enjoy your articles ...I know deep down you are not a communist.
      View article »
    • Sun Jan 6th 03:19 AM | Rating: 0 0
      Commented on:
      2008 Bespoke Market Poll: Chance of Recession 50/50
      Thoreau: "A man more right than his neighbors, constitutes a majority of one."

      My majority includes Hussman, Shiller, Roubini and as of last night John Mauldin.

      If someone is to perform open heart surgery on you do you want a caucus of average citizens or the expert?

      Someone was performing open heart surgery on you portfolio these last 3 days ...I hope you picked the expert.
      View article »
    • Fri Jan 4th 16:01 PM | Rating: 0 0
      Commented on:
      Why Stocks Will Struggle in 2008
      Aw c'mon ...you know the Fed will ride in on a silver stallion and save the day!

      And we will still get the 14% earnings growth promised!

      Finally, I've got some bridges to sell if anyone's in the market...
      View article »
    • Tue Jan 1st 22:06 PM | Rating: 0 0
      Commented on:
      No End in Sight to Banking Crisis
      Bottom line ...US houses inflated in value about $6 trillion in the past 6 years (nearly double):
      - Much of this money was withdrawn and spent.
      - Many houses will end up underwater (debt > house value).
      - Much of this debt was handed out to people who can't pay ...so the banks and investors will eat it.
      - All historical fundamental comparisons such as rent, median income, building cost indicate it is too high.
      - The Case-Shiller CME futures market currently indicates a bottom in 2010 or 2011.
      - The ARM resets for the next 6 months are far greater than the last 6 months.

      Further, Commercial Real Estate usually follows Residential by 12-18 months ...and sure enough that shoe is starting to drop.

      This is far far from over people. We might be in the 2nd inning.
      View article »
    • Tue Jan 1st 21:37 PM | Rating: 0 0
      Commented on:
      Pick Up Undervalued Financials - Barron's Interview
      There has not been a recent deal that didn't dilute stock price. Either there were additional incentives or the stock was just sold below market price. When big players start picking financials at market price with no side deals I might believe its a bottom. They are just trying to stay solvent at the moment.

      The other thing to watch is the ARM resets. The worst 6 months just started ...after more foreclosures we will see how bad their mark to model calculations really are. Until then you are bottom fishing in the dark (...don't grab a shark!).

      Three words if you believe this article ..."Sold to YOU!"
      View article »
    • Tue Jan 1st 13:49 PM | Rating: 0 0
      Commented on:
      Where's the Recession?
      After the NASDAQ crash only a third of economists predicted recession. They are notoriously bad predictions for whatever reason.

      Here is one of many good articles:

      www.hussman.net/wmc/wm...
      View article »
    • Tue Jan 1st 13:29 PM | Rating: 0 0
      Commented on:
      Existing Home Sales: Trying To Make A Bottom
      How can you tell if NAR Chief Economist Lawrence Yun is lying?

      His lips are moving...
      View article »
    • Mon Dec 31st 17:06 PM | Rating: 0 0
      Commented on:
      5 Tactics for 2008
      I think this is a good article, but am confused why you would hold IYR and SRS, since the latter is simply a double short. Why not just hold less IYR (if you were bullish) or less SRS (if you were bearish)?
      View article »
    • Mon Dec 31st 16:57 PM | Rating: 0 0
      Commented on:
      Despite a Mixed Bag, Expect Economic Growth in 2008
      I am simply amazed at the amount of bull $hit crammed into such a short article. They have rewritten history in the most "creative" bullish manner imaginable ...and their crystal ball provides no evidence for such a bright future.

      I will pick out a few examples:
      - They expect the Fed to get aggressive, but think the economy will not be too bad. This is a contradiction.
      - They say that the market is discounting the worst case scenario, but the S&P is only 5% from it's historic high.
      - Valuations are attractive since they grew slower than profits? This is comparing apples to oranges. The PE on the S&P is over 18, which is historically high. The earnings are also inflated, since they have not been downgraded. Q4 earnings growth was supposed to be >12% REMEMBER? Anyway PEs should be much higher than they are ...and they are already high!
      - "If consumer spending doesn't collapse" ...I just bought 3 pairs of shoes on Amazon and all of them were 70% off. The consumer has collapsed ...I have not seen sales like this in years.
      - CRE is down. UE is going up. Durables are down. Credit card defaults are up. Housing and auto are in a depression. I could continue, but I've made my point.

      Anyway, go back to CNBC were people believe these fairly tales.
      View article »
    • Tue Dec 25th 23:55 PM | Rating: 0 0
      Commented on:
      Why I'm Not 100% Convinced That We've Entered A Bear Market
      1) A 17 or 18 PE is historically high for the US. Instead of 10 year, which averages in your 45 PE in the tech bubble, why don't you go back 50 years?

      2) PEs are still estimated using forward view ...both Q3 and Q4 earnings growth were cut substantially ...as I am sure 2008 will be as well.

      3) Emerging markets have higher earnings growth expectations because their GDP growth is MUCH higher than developed countries. BRIC probably averages 8-10% GDP growth versus the US growth of 1-2% on average. I think EM are also over valued, but not at much as the S&P.

      If you are still a bull it is because you choose to be. As they say, "Sold to YOU!"
      View article »
    • Tue Dec 25th 23:26 PM | Rating: 0 0
      Commented on:
      Refreshingly Simple Commercial Real Estate Implosion
      Can you say SRS? I know that you can...
      View article »
    • Sun Dec 23rd 17:34 PM | Rating: 0 0
      Commented on:
      Are You an Investor or Gambler?
      Investing involves knowledge and experience. Pure gambling does not.

      On average a gambler loses money over time and an investor accumulates money.

      I would argue that a world class poker player is more of an investor than the average stock speculator.

      Anyway, the rest of this discussion is a red herring in my opinion.
      View article »
    • Sun Dec 23rd 17:06 PM | Rating: 0 0
      Commented on:
      Consumer Spending Continues to Fuel the Economy
      Good article, but I think there is too much optimism for one good month of data.
      - If you remove Nov and look at the PCE trend it is definitely down.
      - Anecdotal data suggests that retailers fired all their rounds in November already.

      When stores open at 3AM and everything is marked at 50% off, sure people are going to spend money. The question is did they already spend most of December's money in November? Guess we will find out soon enough...
      View article »
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