Dean M

U.S. Economic Recovery and the Housing Sector Mirage

I don't know about that, I think many of our most valuable lessons in life are forced on us.


On Nov 24 07:01 PM Jeff Nielson wrote:

> Hi Dean.
>
> To begin with, the reduction in credit for most Americans is not
> VOLUNTARY. You can't claim to have "learned " new behavior if it
> is simply forced on you.
>
> Second, "Cash for Clunkers" proves Americans have learned NOTHING.
> A million Americans bought vehicles they didn't NEED - with the automakers
> clawing-back all their "subsidies" through higher sticker prices
> - so that those car-buyers saved NOTHING! Most of the rest of the
> country cheered-on this idiocy.
>
> Again: not the slightest sign of Americans "learning" anything.<br/>
>
> Third, to believe that the U.S. economy is currently "growing" implies
> believing that an economy which became hopelessly insolvent through
> excessive borrowing-and-spending has been FIXED by even MORE-excessive
> borrowing-and-spending.
>
> Obviously anyone who believes this fantasy has clearly not learned
> the lesson of "buying things they can't pay for".
>
> The fact that Americans are not DEMANDING the resignation of their
> entire government for CREATING a NEW subprime sector (100%-backed
> by taxpayer dollars) - while the U.S. housing sector is STILL plummeting
> downward from the collapse of the original bubble - shows that most
> Americans have learned nothing.

U.S. Economic Recovery and the Housing Sector Mirage

How can you make that claim when the graph you presented shows that Americans are reducing their debt levels for the first time in 40 years?

"Sadly, Americans apparently have still not learned the lesson that buying things, but not paying for them cannot possibly be the basis for a solvent economy, let alone a healthy one. "

The Twenty Year Stock Bubble Is Still Inflated

This type of argument would appear to be based on the premise that potential profit growth for companies is based on the strength of 'our' underlying economy. But really all the growth potential is in developing markets now. Not to say that we're not in a bubble but we need an analysis that will factor this in.

Are Stocks Making a Major Top?

as many people have been calling a top on the way up as had called the bottom on the way down. I'm sure someone will be correct and it will be due entirely to dumb luck.

On Bubbles and the Market Recovery

Interesting how all these heavyweights are coordinating their efforts to jawbone the market down all of a sudden. Maybe they are trying to cover up their own meager performance by year end.

World Recovery Is in the Hands of OPEC

I wish oil would go to $1000 so we would stop using it, we have plenty of energy sources right here, the domestic energy producers just don't own politicians like big oil. Lets see Iran and Venezuela try to compete in the world economy on innovation instead of the dumb luck of sitting on massive oil reserves, that would be fun.

Break-out or Fake-out?

I guess you missed the runup completely. I jumped in the market when the length of this rally exceeded 106 days (the length of the 1929 bear market rally). You think the market rally is happening in spite of the dollar collapse? That is the cause.


On Oct 14 04:27 PM market ace wrote:

> The whole financial world and the US economy are riding the gov't
> and medias giant FAKE OUT
>
> The FED is destroying interest earnings for millions of retirees
> and therefore destroying income necessary for recovery just so they
> can pimp for their failed banks. Bottom line: Right now, $1,000 invested
> in a 3-month Treasury bill yields a meager $1.20 in yearly interest.
> At that rate, just to match the 5 percent interest you could have
> earned on T-bills in early 2007, you’d have to leave your money sitting
> there for 42 years! U.S. savers are obviously getting shafted. <br/>
>
> The U.S. Treasury Gobbling Up Available Credit, Crowding Out Nearly
> All U.S. Businesses!
>
> Due to giant bailouts and out-of-control federal deficits, the U.S.
> Treasury is now borrowing money at the fastest rate of all time,
> hogging nearly all available supplies of credit. Meanwhile, American
> businesses and average consumers are getting shut out or even shoved
> out of the credit markets.
>
> In the first half of this year, the Treasury has stepped up its pace
> of borrowing to annual rates of $1.4 trillion in the first quarter
> and $1.9 trillion in the second quarter. That’s 3.5 times and six
> times more than last year’s pace, respectively.
>
> Meanwhile, businesses are getting crumbs: Last year, banks provided
> new credit at the annual pace of $472.4 billion in the first quarter
> and $86.7 billion in the second. This year, on a net basis, they’re
> not providing any credit whatsoever. In fact, they’re actually liquidating
> loans at the rate of $857.2 billion in the first quarter and $931.3
> billion in the second.
>
> Ditto for mortgages. Last year, mortgages were being created at the
> annual clip of $522.5 billion and $124 billion in the first and second
> quarters, respectively. This year, they’ve been liquidated at an
> annual pace of $39.3 billion in the first quarter and $239.5 billion
> in the second. WIth a foreclosure every 13 seconds this will only
> get much worse.
>
> For consumers to borrow on credit cards and with other consumer loans
> is even tougher. Last year, people were able to add to their consumer
> credit at annual rates of $115 billion and $105 billion in the first
> two quarters. This year, in contrast, they’ve been forced to cut
> down their credit balances at annual rates of $95.3 billion in the
> first quarter and $166.8 billion in the second quarter.
>
> Clearly, consumers, small businesses, and even larger businesses
> are also getting shafted.
>
> But Wall Street Traders Reap Gigantic Rewards While Average Workers
> Face Worst U.S. Job Market Ever Recorded!
>
> So it should come as no surprise that, with the U.S. Federal Reserve
> virtually guaranteeing a fantasy land financial environment for banks,
> GS has hit the jackpot this year: The bank has accumulated a bonus
> pool of an estimated $16 billion to dish out to an exclusive group
> of its heavy hitters as part of Wall Streets pool of an estimated
> $140 billion. That’s enough to cover a $50,000 bonus check for each
> and every household living in Los Angeles, Chicago, San Francisco,
> and Detroit.
>
> Meanwhile, all across the USA, with small and medium-sized businesses
> unable to get credit or hire Long-term joblessness has hit the highest
> level in at least a half century: The share of the unemployed who
> were out of work for at least six months reached 35.6 percent in
> September, the most since the U.S. Labor Department began keeping
> statistics in 1948.
>
> More than 5.4 million people have been unemployed for at least 27
> weeks, with 1.3 million expected to exhaust their benefits by the
> end of this year. 15 million unemployed Americans are competing for
> 3 million available jobs, the worst on record, while 35 million remain
> on food stamps.
>
> More than 7.2 million jobs have been lost in the past 21 months.
> In contrast, in the 30 months of the past recession, only 2.7 million
> jobs were lost. The official unemployment rate, at 9.8 percent, is
> just the tip of the iceberg. The true unemployment rate, including
> part-time workers who can’t find full-time jobs and workers who have
> given up looking, is 17 percent according to the U.S. Labor Department
> and 21.4 percent according to Shadow Government Statistics.
>
> Anyone thinking that this Stock Market miracle reaching over 10,000
> today while the US dollar is getting crushed is not a head fake will
> soon learn a lot ablout false hope.

Bonds Outperform Stocks: What's Next for Markets?

Great data point

Jim Rogers on the Next 10 Years

This might be an interesting anectdote, I'm correpsonding via Skype with a 30 year old, out of work engineer in Xi'An (he is helping me with Chinese and I'm helping him with English). He is trying to emigrate at all costs, he doesn't feel there is any opportunity in China unless you are in government and a Party member and that poverty in CHina is beyond anything we could imagine. I made all the arguments that are popular in postings such as this and told him I had put a large portion of my savings into Chinese stocks and he seemed quite shocked. He thinks that the government will stand in the way of any standard of living improvements and will indefinitely maintain a tight grip on the country's economic resources. I wasn't completely put off but I think there is a risk of growing too sanguine about the China growth story.

Jim Rogers on the Next 10 Years

If you think so poorly of him why did you read all his books?


On Oct 12 11:13 AM bobbobwhite wrote:

> I have read all of Jim Roger's books and wrtings and can say that
> all of what he says is founded in self absorbtion and is thus self
> serving. Not to say that he is totally wrong here or in anything
> he writes, but always know that he writes for his own benefit, not
> yours, even though the two may intertwine. But certainly not always,
> so be careful and do your own homework. He is a media star with quirky
> personal gimmicks in the general mold of Jim Cramer, and those types
> should ALWAYS be suspect.

Stretching Out the Bear Market Rally

So to recap

fundamental logic = your point of view

"I am not altering my longer-term bearish view, but showing the divergences as the convoluted bullish consensus continues to defy fundamental logic."

Faber, Rogers, Dent and Celente: Collapse Dead Ahead

I thought Dent was calling for DOW 30,000

"Dent was also bullish on the Dow, calling for it to reach between 9450 and 10,500"

Trying to predict the turn is a suckers game, you could be right 9/10 times but the time you're wrong will wipe you out. Better to be a fast follower.

Ten Reasons for an Imminent Stock Market Crash

Another useless stock market prediction

Beware the Ides of October

Sorry Rich, you already called the market top, I think it was back in July. You only get one bite at that apple.

Liz Ann Sonders: Job Gains Possible by Year-End

Interesting insight how we've never still been in recession when initial jobless claims have moderated to the degree we've seen. I'd love to see a chart illustrating that. I do find it hard to believe that there's a significant risk of the economy being 'too strong'.