rsen01

Searching for the Bottom: The Valuation Question

Quantitative finance is just not the issue here. The issue is credit cycle implosion, and if you run your business with short-term debt to finance long-term debt...well, you could be out of luck.

Buffett (back in the day) said that "debt is a dagger aimed directly at the heart of a company." Some said "DEBT DOESN'T MATTER." Apparently, it does.

So focus on credit (the US has 50 Trillion or so out there) and remember that throwing a Trillion at it (or even 5-10) is miniscule. Or actually read something like Warburton's DEBT AND DELUSION the seminal work (1998) of what would and did happen.

Things Aren't as Bad as They Seem - Barron's

This is sort of the Barrons' version of Don Luskin's WashPost Sep 14th op-ed piece, just before the market collapsed.

I'm seeing a lot of people losing their jobs, store fronts closing, and real estate prices sinking, and I live in an area (Boston) that supposedly hasn't been hit as hard as many.

Sure, the market can do anything, particular with the likelihood of a few TRILLION dollars of stimulus. But arguing that things aren't that bad in the face of debt deflation of epic proportions seems shallow. Of course, maybe we should put Mr. Happy Face on after a 40 percent SPX drop...unless the monthly charts put us where no man has gone before.

36 Opportunities for the Beginning of the Bull

I have the highest respect for Bill's analysis, yet also respect the possibility for DEBT DEFLATION on an unprecedented scale. Presumably, as many corporations have limited access to credit they will need to either offer debt at unreasonable cost, issue more equity, or sell assets. Yes, we have extremely oversold conditions, but still, the number of bullish/opportunity articles this weekend is staggering. The risk is BINARY, with both upside and downside potential, IMO.

Fannie, Freddie: What Paulson Learned From the Pentagon

"There's nothing cheaper than free advice...and nothing easier than spending someone else's money." The only question is how much the taxpayers will pay to support an egregious policy to "privatize profits and socialize losses." Nauseating stuff.