John Pseudonym

U.S. Household Sector Not as Bad Off as Commonly Believed

"We have all watched that spectacular collapse of leverage on Wall Street and are now in the process of rebuilding a sounder financial system"

Are we?

Is pumping a TRILLION(s) DOLLARS into failed institutions a method for building a "Sounder Financial System"?

From my perspective, that's an attempt to keep the old system alive; or to bring it back from the dead...

If we were really building a sound system, we would let the worst institutions fail and hand their assets over to best run banks.

Instead, we are propping up the losers with imaginary taxpayer money.

In doing so, we're building a bigger mess that will end with the world questioning the solvency of the US Government itself.

10 Contrarian Reasons for a Bottom

When the market rallies on bad news, it's a bottom; but is it the final bottom?

I say no, It's a temporary technical bottom.

8000 and 9000 are big technical numbers.

The closer we get to 9000, the more you want to be in a short position.

This is not your fathers recession. This is the beginning of a new era and things will not be "as they were" 3 months from now.

The government is doing everything it can to re-inflate the housing balloon. But the hole is too big and all efforts will fail.

Deficits will explode

The economy will contract and then become stagnant.

Unemployment will be at least 9% and then some type of bottom may be in.

But the era of the "borrow and spend" economy as it was is over.

6.5% Rallies Only Occur in Bear Markets

The new bubble is bonds.

What a predicament we are in...

If the economy turns for the better, the bond market will collapse. Interest rates will jump and the value of the dollar will sink.

Oil and commodities will spike too...

Everything is just so bad...stick with cash for now.

Investors React to the Markets Like Deer in Headlights

The bottom will be in when unemployment holds steady or declines for 3 months in a row. At that point I would feel comfortable that the worst has passed as employment is a lagging indicator.

Banks Are Yet Again Under Pressure

"The SEC should impose moratorium on "shorts" immediately."

That's ridiculous. If a company is healthy and "shorts" go after them, the shorts are going to get their heads handed to them.

Shorting is only successful when you short bad companies and bad companies are doomed to fail no matter if their stock is being shorted or not.

Investors React to the Markets Like Deer in Headlights

"especially if the world's growth areas start looking away from Wall St.’s headlights and focus on their own better short term prospects and potential."

That's why everything is tanking! People are focusing on short term prospects/potential and they don't see any.

The collapse is mostly rational; anyone with a brain can look out and see the world economy grinding to a halt. How is that good for future profits?

The real headlight induced panic is yet to come. That will be the average Joe yanking his 401K money en mass. January will be interesting at that is when a lot of people are allowed to change their 401k allocations.

If the 401k heard heads for the door in January, that will sink the DOW like never before. Bond yields will tank as the money rushes in and people head for "safety".

At that point you will have a mega bubble in the bond/treasury market.

When that bubble breaks interest rates will explode and the US's ability to pay it's debt will come into question....

Currency/bond crisis dead ahead as the Democrats are steering us directly into the berg.

Banks Are Yet Again Under Pressure

The CEO of Ford made (or showed what) a fool of himself whining about not getting any money.

First he's says it's not his fault the economy tanked. That's true, but it's his job to at least have a plan for/if/when the economy tanks. What the heck are you being paid for? To stand their in good times and collect big checks and then whine when times turn bad and your company is instantly bankrupt?

Then he whines about people not getting loans (that they can't pay back) to go out and buy those $50,000 SUV's. Apparently he thinks the good old days of loaning money to people that can't pay it back are just a few months away and with this government bridge loan he can survive until the banks start giving away money again.

Not only did these fools not see it coming, they don't even understand what it is that has bankrupted them!

It's over GM, FORD and Dodge. The credit bubble has burst and it will be a long time (after you're gone) before we start loaning trillions to people that will never pay it back.

Here's how to save your company.

1. Go into CH11

2. Dump all of those ridiculous union contracts.

3. Fire 50% of your employees.

4. Hire a new design/engineering staff.

5. Build good cars people want to buy.

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

1. All wages in bankrupt companies should be cut; hence the term bankrupt and no money, as in on the way to zero pay...

2. I am not anti-union. I believe unions can be a good thing. Workers should organize to get their fair share of the profits. But that payment should not be written in stone.

If the company becomes unprofitable, then the unions should step up and do what's necessary to save the golden goose; NOT COOK IT!

CEO pay is broken and this is another thing the unions should tackle. Insist CEO pay is no more than 10x the average worker pay and falls at the same percentage as the workers pay in tough times.

What I've described above is not the UAW and that's the problem!

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

"The article makes it sound like these people are making 150 grand a year, when it is closer to 60 or 70. To me that is a wage they deserve"

Well...THERE'S YOUR PROBLEM>>>

$65,000 a year per worker to build cars? That's insane!

If the auto makers were rolling in dough due to the productivity of those $6k workers I wouldn't have a problem; but they're NOT!

Pay should be cut in half for all employees as a first step and then >>>MAYBE>&... a government handout MIGHT be considered.

Welcome to Wall Street, Barack Obama

"However, for confidence to return, sustained moves above 10,000 for the Dow and 1,000 for the S&P 500 are required."

Remember how we reached 14,000...the world bought stocks with imaginary money.

The imaginary money still exits, but the bankrupt publics' access to it is shrinking by the day.

I've said for years that the final blow will be the direction of cash flow for the average investor and his/her 401K plan.

A mountain of money poured into stocks through 401k's. As the inflow reverts to an outflow, the market will have no where to go but down...

When Will the Recession End?

This is a new era folks and new "norms" are going to be established.

We have not simply slowed down on our way to picking up speed again in a few months. The dynamics of the entire system have changed and are still evolving.

Keep your money safe and wait for the dust to clear. Don't try to buy the bottom; instead wait until it's clear that it's past as there's plenty of money to be made between the bottom and top without timing both perfectly.

New York Times: Revenue Plummets, Debt Is Junk

Craigslists...

It's killing ebay too. Years back I was an ebay addict; now I rarely visit let alone buy anything.

Totally hate ebay's new system, that Best Match search is so annoying! When I do find what I'm looking for (if I find it's for sale) the price is crazy!

Selection at ebay also sucks...

Last week is was in the market for a tube TV for the kids. I go to ebay and search local as I don't want to pay shipping on a 30" TV.

eBay results: ZERO!

Craiglists: about 10 results and I managed to net a 36" tube TV in perfect working shape for $20!

Now you know why ebay and NYT are dying! Sell that worthless stock!

Bank Safety: The Hidden America That's Not in Crisis

You may overlooking one thing here...

A small town banker I know participated in the risky loans.

He made a fortune on the business, but dumped all of the junk on the big banks.

Now his bank is in great shape to swoop in after the great deflation and pick up the stuff he sold to the big banks for pennies on the dollar...LOL

Justice can bee sweet...

How'd We Get Into This Mess?

"“How on Earth did we get into this mess in the first place?” The answer, plain and simple, is greed."

You forgot political corruption...

The roots of this mess have 3 names attached: Bill Clinton, Robert Reuben and PHill Gramm.

The repeal of the Glass Act in 1999 and ceremoniously signed by Clinton is where this started.

Wall Street purchased our Government which dutifully passed the laws to meet the demands of their owners.

If you want to understand the Glass Act and why it's repeal is at the root of this mess, do some research on the subject. By the time you're done, you understand that (D)Clinton and (R)Gramm sold us out to Wall Street.

There were plenty of opportunities to stop the madness, but the corruption of both parties runs too deep for common sense and the thought of our well being to take precedence.

----------------------...

The "solutions" are coming from the people that caused the problem and amount to nothing more than making sure they get a refund on their loss.

The likely outcome will be a serious devaluation of the US dollar and a crushing wave of inflation through our economy and our worthless dollars struggle to buy everything that's imported.

This isn't going to end well folks...

There Are No Simple Paths to Prosperity

The government is saving the banks as it's all they can do for without the banks we are finished.

However, the trillions of $$$ it will take to save the banks will come from thin air.

Here's what's happened and what I believe will happen.

1. Inflation in hard commodities.

2. Deflation of everything that was overvalued due to too much easy credit.

3. Creating wealth from the thin air to save the banks.

4. Rising inflation which will be the final blow to the American consumption economy.

5. Worldwide economic recession/depression