MudEngineer

Markets Aren't as Benign as They Look

The E in P/E can and will get worse, so the current stock P/E's are not necessarily cheap. Natural Gas looked cheap to me at $6, not it is half of that level. The optimism created by this quick bear market up move is quite impressive. Memories of recent losses are obviously very short. The consumer is dug in and will not borrow and will not spend on much of anything but food and lodging. We just incentivised many low income people to buy new vehicles using taxpayer borrowed money. We did the same several years ago with houses and look how that turned out! I am thinking that in less than four months, at least half of the Cash for Clunkers loans will be in default. Those people were driving a beater for good reasons. There is no new driver coming dine the pike for the economy and deflation will accelerate from here. Good luck if you stay long this market.


On Aug 21 11:05 PM Deepv wrote:

> I think Q1 was trough earnings. To argue otherwise is to argue for
> the great depression II. I think anyone with brain can see we printing
> and borrowing our way to avoid that pretty nicely. I think we may
> have great inflation II. for that I would rather have stocks than
> hold dead president or fixed income dead pres's. Stocks are interest
> in real biz that can respond to inflation. gold is a rock.

Credit Card Delinquency Wave Reaching Tidal Force

Financial stocks have gone up as much as 400% in 5 months and you read the article above and still want to stay long JPM. You are living in a world of hope just like the people who ran up these stocks! The real world just does not support the banks going even higher from here. Good luck with your JPM purchase and maintain some tight stops. You are going to need them.


On Aug 19 08:28 AM JosephN wrote:

> I have read that credit card defaults in july are actually down across
> the board for Citi, BAC and especially JPM. I believe JPM is actually
> poised for quite a pop up when the good news about 3rd quarter earnings
> are released.
>
> (long JPM)

Recession Roommates Could Offset Shadow Housing Inventory

This trend in consolidating households would indicate that incomes are falling pretty fast as people do not move in with other strangers or even family unless than can no longer afford their own separate housing. These people who share housing will not be supporting our economy much as they have no extra money left to spend and will be buying just the necessities to stay alive. Things are not good and Obama is only trying to make it worse with his Healthcare and the Cap and Tax bills he has proposed and letting tax cuts expire next year. LOOK OUT BELOW!

Let's fight a global warming problem that does not exist, while basically ignoring the housing problem which does exist. Healthcare may need to be revised but does not need to run through a shredder. What a plan!

My pay is down by 50% from last year due to very little work available and may end up being unemployed. Even then, I do not feel that it is your responsibility or duty to pay for my health insurance!

Has the Rally Already Exhausted Itself?

When a market rises over 50% in a 5 month period and is based on still deteriorating fundamentals, that is a huge bubble! The housing prices will still fall further over the next two years as option arms and liar loans begin to adjust payments upwards and housing is what caused the whole mess in the first place. Is the Government going to just extend unemployment compensation indefinitely? The unemployed and those that are afraid to be the next unemployed do not spend much money. There will be no short term recovery, which is what the market was anticipating.


On Aug 19 06:17 AM rick12345 wrote:

> I'm still frustrated at how people can call this a massive bubble;
> We haven't even recoverd back to December levels, which represented
> the absolute peak of the economc crisis. My play on all of this is
> that we see a quick rise to over 10000 in the next few months, once
> the market finally finds its footing, probably over the next day
> or two.

2009 Is Looking an Awful Lot Like 2008

Actually Robert Prechter with Elliott Wave did predict this large run up in stock prices with a target of 1000-1100 in the S&P. We are now in very dangerous territory as the next prediction is a wave down that will be bigger than the first move down from 2007 to the Spring of this year. Get your lifeboats and life preservers in order!


On Aug 12 11:30 AM predictorman1000 wrote:

> I am moving towards cash. My gut (well, a synthesis of a ton of stuff)
> says that things "don't feel right". I like all the technical analysis
> but if you look at a bunch of sources (even within SA) they are all
> over the board. I follow Graham Summers because he makes a good straightforward
> case, and it supports my gut.
>
> No one, and I mean no one, predicted the swoon into March, the big
> run up, the dip in June/July, and then a big run up. NO ONE, so I
> am trusting my gut on this one. I got into cash early September of
> last year for the same reason.

Why Is the Fed Buying Treasuries?

Anyone that is at all fiscally conservative such as Congresswoman Michelle Bachman from Minnesota is being labeled a crazy person or a far right winger. It is so far gone in Washington that anyone with common sense is in the far off fringe of their society and is not acceptable to them. If we make it to 2010, we need to clean house an send at least 98% of those money spending self servers home for good!


On Aug 09 06:01 AM thomdd1959 wrote:

> The only real financial crisis of the U.S.A. is hiding in the audit
> of “The Fed Scam”!
>
> Audit “The Fed Scam” bills HR 1207 must pass in The House and S 604
> must pass in The Senate immediately! Any Representative or Senator
> that does not vote in favor of and support these bills or tries to
> “water-down” or stall these bills is clearly a Traitor and “Sold
> Out” the United States of America!
>
> “Few men have virtue to withstand the highest bidder.” --George Washington
>
>
> Does our government think that we are now here to serve them? Are
> they out of their minds?
>
> Some of our leaders today have acquired a very “twisted” view of
> their roles. Do we now have those who can no longer handle the power
> we entrusted them? Why have they abused and taken advantage of us?
> Do they no longer think they are accountable to us and believe they
> can do whatever they please? Our “public servants” have developed
> a “spirit of insubordination” and have gotten way out of control!
> This has to stop right now! This is ridiculous! If they do not want
> to listen to and serve us wholeheartedly, we no longer need them!
> “We need to do a major house cleaning immediately! Enough is Enough!
>
>
> It’s time for “We the People” of the U. S. A. to get VERY ANGRY!
>
>
> We need to keep a real close eye on all our government “public servant”
> employees. Our government was set up to serve U.S. and we no longer
> want any secrets about our money. We no longer want any misguided
> governmental arrogance directed at us!
>
> This Is A Very Public Matter!
>
> We demand real transparency, with open books and plenty of civilian
> watchdog czars. Government czars are an insult to the intelligence
> of the American people! Many of are entrusted government employees
> are a total disgrace to U.S. They only care about their own best
> interests!
>
> “Congress can revoke central bank’s charter ‘at any time’” --Ron
> Paul
>
> www.tomdavidd.com/blog/
>
> Anybody who supports “The Fed Scam” is clearly a Traitor to “We the
> People” of the United States of America!

Joblessness Drops? Hold the Applause

Unfortunately unlike in Germany and Russia, here we got the Nazi before the revolution and the Nazi is now the major cause of the revolution! History doesn't always repeat exactly the same.


On Aug 08 11:32 AM Fred Linn wrote:

> US Treasury reports that income tax receipts are down 22%. Coporate
> tax receipts are down 57%.
>
> Keep borrowing and printing money, and you get more and more little
> green pieces of paper floating around. The only thing backing
> the value of little green pieces of paper is the idea that it can
> be traded for goods and services. Every job lost means means
> less goods or services flowing into the economy. It takes more
> and more little green pieces of paper to buy fewer and fewer goods
> and services. Pretty soon, people get the idea that little green
> pieces of paper are not worth anything. When that happens, you
> can prattle on and on all you want about economic theories, assetts
> and liabilities, banks, stock markets and anything else you want
> to. When people lose faith in little green pieces of paper to
> buy what they need-------they will find some other way to get what
> they need.
>
> Just hope the some other way they find to get what they need is a
> gun.
>
> It has happened before. Many times, and in many places.
> It happened in Russia, it was called the Bolshevik Revolution.
> Nobody even knows how many people died, somewhere around 20 to 30
> million. It lasted about 40 years, 1905 to 1945. It happened
> in Germany,and led to a nice group of people coming into power----they
> were called Nazis. It happened in Italy. It happended in
> Spain. It happened in China, and everyone got litte red books
> to read. It happened in France and a lot of people got free
> haircuts.
>
> History is on the side of the "doomsayers".
>
> Party on. Let them eat cake.
>

Joblessness Drops? Hold the Applause

Or another way to see it is that you spent so much borrowed money fixing all the holes that you can no longer make the payment on the boat and end up losing it anyway!


On Aug 07 12:11 PM davidbdc wrote:

> Another way to look at it is if your ship had twenty holes in it
> and you had fixed 8 and then you fixed 3 more.....Are you closer
> to getting the ship fixed?
>
> I say yes. So I'm happy that a few more holes were fixed and lets
> keep fixing!!

Second U.S. 'Bank-for-Businesses' Faces Bankruptcy

Just came back to Louisiana from a trip to Phoenix, AZ. According to their newspapers, they now over 300 commercial foreclosures every month and rising. This of course will result in more job losses and also more home foreclosures which are already running at over 2000 new foreclosures each month!

My question is with this taking place and getting worse and option ARMS and liar loans coming up for much higher payments, why are banks like Capitol One and Wells Fargo continuing to go up day after day?


On Aug 06 01:21 PM Jeff Nielson wrote:

> The comparison is obvious: they both focus their businesses on lending
> to U.S. businesses and they both are teetering on bankruptcy.
>
> I hardly think this amounts to comparing "apples and oranges" - ESPECIALLY
> when the theme of the commentary is that U.S. companies will be going
> bankrupt because they can't get financing.

Accelerating Bank Failures Refute Recovery Hype

With States now not even giving out unemployment checks to those that qualify, that makes the unemployed statistics look even better as these people will no longer be counted as unemployed. GEE, look total unemployment is falling, the economy is getting so much better! In reality, it is only an illusion because many are falling through the cracks and no longer be counted. They sure aren't spending any money now that the unemployment checks have stopped coming and will be borrowing as much as possible just to stay afloat and then not paying it back later. More tough luck for the banks!


On Aug 03 09:48 AM TeresaE wrote:

> I look at the exuberant markets and think, "what in the hell are
> people so optimistic about?"
>
> The CARS program is being touted by MSM as running out of money in
> one week, when in reality they only used $112.5 million MAX and have
> around $100 MAX pending (through last Friday). The whole "run out
> of funds" is nothing more than propaganda to keep the sheep buying
> overpriced crap. If you really look at what is happening, it makes
> you wonder if this is yet one more bank bailout program--just touted
> as good for us.
>
> States are suspending extensions on QUALIFYING unemployed for some
> reason (have heard from many people in many states) in July, I believe
> it is to counterbalance the direct increase that raising the minimum
> wage will have. My brother was without a check for a month, then
> magically he was told last week that he was "right" and checks resume
> next week.
>
> We are being LIED to, and the MSM is complicit in pushing out the
> deception.
>
> The government is striving to destroy our small businesses and gift
> their wealth to the mega-nationals.
>
> I don't know how long the lies and deception can continue, all I
> know is that I am fighting my husband daily to keep from pouring
> what little cash we have back into the market.
>
> My belief is that this "up" market is being artificially created
> to remove MORE of the middle class's wealth and savings and gift
> to the campaign contributors and special interests.
>
> Time will tell if I'm right. But, for now, I am not risking anymore
> that I have worked for. I would rather be wrong, wait and buy a
> stock at a higher price, than be right and lose it all by buying
> in now.
>
> The America that most of us grew up in is dead folks. And it isn't
> coming back.

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

This cash for clunkers program "is not a tax rebate". This is taking money from the people who pay taxes and giving it to the people who make so little money that they don't have to pay any taxes and may even get a so called tax refund even though they paid no taxes. That my friend is exactly "socialism".

Your wonderful "cap and trade" will really screw the people who have no or little money as energy in all forms will rise in cost and they can least afford to pay those new taxes. All because of a few idiots who mistake CO2 as the cause of global temperature change when sun spots actually cause this cycles naturally. If cap and trade and the healthcare plan both pass, we will be permenantly in a recession or a depression. THANK YOU LORD OBAMA, OUR NEW DICTATOR!


On Aug 03 08:09 AM YesYesYes wrote:

> When Bush gave a tax rebate (WHAT WHAT WHAT) you all applauded like
> crazy (GIVING ME MY MONEYBACK IS PRAISE WORTHY, THANK YOU JESUS.)
> Now when Obama does it - it is Socialism (seekingalpha.com/symbo...).
> Just like the Cap and trade. I believe that the Reagan admin started
> that with pollution controls and the Bushes followed through with
> the concept. Dems were skeptical at first but admitted that to some
> extent it worked. (STOP SMOKING POT.)
>
> But now - as soon as Obama want to use Cap and trade - the "conservatives"
> are all against it! ("SCARE QUOTES")
>
> It just goes to show that the Republicans have no real point of view
> - they just want to criticize the Dems no matter what. (NO MATTER
> YOU CRANK, paranoia!)
>
> Just Nattering nabobs of negativism! (POSITIVELY DELICIOUS!)

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

All the Government is doing is accelerating auto sales that would have occurred anyway in the short term future. Most very high mileage cars or trucks are close to being worn out and they would have been traded in within two years anyway. What did we gain by this? Remember all the manufacturer rebates that got people to trade in their cars. The sales went all the way up to 16 million and then when everyone who could actually afford a new vehicle had already bought one, sales plummeted to less than 10 million. We are doing the same thing with this clunker program and setting up for even poorer auto sales in the near future. What an incredible waste of my taxpayer money.


On Jul 31 01:43 PM dancingdad wrote:

> His arguments are like the ones Bush made going into Iraq. First
> note he said 200,000 low mileage cars are traded in a normal 3 month
> period. ( I'm willing to bet a large percentage of the clunkers coming
> in are high mileage ones.) He then assumes that all the clunker cars
> replace all the normal trades (bad assumption). His faulty logic
> leads him to conclude that 222,000 clunkers - 200,000 normal trades
> so we get 22,000 additional trade activity for $1B. All wrong, all
> worst case assumptions.

Natural Gas: Another Great Thing from a Lobby Near You

I work in the oil industry and have spoken to one of the Shell people who has worked on oil shale projects. Thus far, the amount of energy spent to get out the oil from the shale exceeds the energy that they get from the oil in the shale. Therefore without new and more efficient technology, oil shale is a no-go. Shell has worked on this for over 20 years with no cost effective solution found yet!


On Aug 02 09:33 AM mc2406 wrote:

> Leave it to our professional politicians and their lobbyist whores.
> The same thing has been going on for years with respect to developing
> oil shale projects (particularly in Western Colorado)-- environmental
> permits, studies, delays, etc. Between natural gas and oil shale
> oil America has enough reserves to be completely independent of foreign
> oil for many generations if they would only let us go for it. FIGURE
> IT OUT- Washington.

Why GDP Stats Are Still Ugly

I want some of what is in your "kool-aid". I work in the oil industry and see things only getting worse with less and less exploration occurring. That is the absolute worst thing that could happen right now when the world's existing oil wells are now depleting at 9% per year. That is twice as bad as it was only 3 years ago. If and when this economy does turn around and that is a big if, it will get knocked on its ass very fast when the oil price far surpasses last years $147 high.

Wait till the option arm and liar loans start to reset later this year and home prices restart their rapid decline. Banks and homeowners will be back in deep trouble and the economy will tank even further down than it has.


On Jul 31 07:42 PM FB5000 wrote:

> "Media lies". "Chinese Recovery Lies". Blah, Blah, Blah.
>
> What a lot of emotional nonsense. You seem to have a real axe to
> grind with CNBC and "mainstream media". You sound like Rush Limbaugh.
> You folks just can't stand to see an improvment. You just want/need
> things to be terrible or to get worse. Sorry. You are wrong.
>
> Forget for a moment that Q2 GDP is ancient history. April/May/June
> is an age past. ALL THE NUMBERS - ALL THE NUMBERS ARE TRENDING BETTER.
> It is a simple fact. The recession moderated drastically in Q2 and
> is now over.
>
> The leading indicators are flashing green. The market is up. Recovery
> is here. The question now is how strong. All the rest is beating
> a dead horse and kind of boring.
>
> That's all.
>
>
>

Citibank's Problems Are Far from Over

I suggest that for number 1, people who have lost their jobs will pay their minimum monthly payment on the credit cards as long as it takes to max out the credit limit on all of them. They will then use the cash saved and accumulated by doing so to make payments on their house. The can't come after you for a bankruptcy on the credit cards and they can't take your house in bankruptcy.


On Jul 20 09:46 AM Ivan Johnson wrote:

> 1.As people continue to lose their jobs, what are they going to pay?
> They are going to pay their mortgage BEFORE they pay their credit
> cards.
> 2.If you've sold off your toxic mortgate derivatives, you're still
> stuck with your credit card division. The alpha of issuing credit
> cards had a much higher beta than they realized. I'm not sure the
> people running these groups even know what I am talking about.<br/>3.The...
> trade away with these comapnies to make money but the economy is
> burning while we are transfixed my what the First LAdy is wearing
> and the latest on M.Jackson.
> 4. All of these government sponsored credit card bailout programs
> are a scam because they reduce your balance 60% but they send you
> a 1099 for the difference. The IRS wants all of the money now. Now
> you have 2 mouths to feed - who has the time? You are in the clutches
> of the IRS - talk about penalties and interest!