TomF75

When Will the Market Turn Negative Again?

Oil hasn't doubled?!?!? Dude maybe you need to take 4th grade math again:
12/30 spot price: 33.97
6/4 spot price: 68.45

looks like a 2 bagger to me


On Jun 06 01:22 AM IronBob wrote:

> Please post facts. Oil has not doubled. In fact, it's not even close
> to double. Steady and sporadic increases in oil prices usually don't
> have that much of an impact.
>
> It's the clear and present jumps of $3-$5 a day over a course of
> a week or two that hugely impacts the economy. If that occurs then
> you are correct, all bets are off because inflation is waiting around
> the corner.

Doug Casey: What to Do in 'The Greater Depression'

Not to play Devil's advocate here, but in the last paragraph where it mentions the authors previous books:

Crisis Investing: Opportunities and Profits in the Coming Great Depression in 1979...in 1993, with Crisis Investing for the Rest of the Nineties. In between, his Strategic Investing: How to Profit from the Coming Inflationary Depression (Simon & Shuster, 1982) broke records for the largest advance ever paid for a financial book.

It seems to me that whenever this guy comes out with a book about "crisis investing" the crisis is pretty much over.

Great Depression in 1979...umm don't think I recall that one?

Crisis investing for the 90's...yeah with the exception of that LTC/Asian blip in '98 I think that was a pretty good decade for equity investors

Coming Inflationary Depression in 1982...Does it count if the author is 28 years to early?!?!? I mean a broken clock is right two times a day after all.

I don't deny that the US and Western Europe have some serious structural deficiencies to deal with, but it seems like if you followed this guys investing advice you would've had to hawk your possessions at the nearest pawn shop a long time ago.

Was Subprime Lending Just as Dishonest as Madoff?

Good article, with many great comments. I think another thing to touch one is outright misuse of products. Many have said Subprime lending existed for years, why did it suddenly become a problem. I recall hearing one of the founders of Golden West talking about the Pick-A-Pay mortgage.

He described this mortgage as being created for sales people who had high, but fluctuating incomes. Those products obvisouly didn't cause a problem when they were marketed to the person they were intended for. It was only when those products began being marketed as a way to get yourself in too a bigger house than you could normally afford that they became a problem.

Ditto to a previous poster on the 80/20 loan, ridiculous how these things were allowed to pass muster by the main mortgage bank.

Was Subprime Lending Just as Dishonest as Madoff?

I suspect what the poster meant by "Conventional" was simply non-subprime. I have a 5/1 ARM from ING that was signed with all conforming docs, 75% LTV, and a proper income:debt ratio. I am not an expert, but I think this mortage could be considered Conventional.


On Dec 26 12:05 PM BerkeleyBob wrote:

> I don't understand the poster's final comment that 2009 will be bad
> because conventional mortgages will reset and interest rates reset
> will cause large scale loan failures. Isn't a conventional mortgage
> fixed? Isn't a conventional mortgage not an Alt-A, not a no Doc?
> If interest rates remain low and stable, maybe some re-financing
> activity but a re-finance is not feasible with less than a .5% interest
> reduction and is expensive in terms of taxes, fees, etc.

The Coming Depression: See It Clearly Through Historical Eyes

"...People fail to read and apparently never learned in school how to
actually analyze data or analyze an argument for correctness. If
they had much misery would have been averted..."

No, unfortunately my wife is too busy being forced by the Fed's to teach anti-bullying lessons (god forbid their feelings get hurt), and AIDS education to 8 year olds (important, but to 8 year olds? Difficult to teach kids about an STD when you can't mention sex...Duh!).

Not too mention the Every Child Left Behind Act forces teachers to teach kids to pass a test, not too actually learn the subject matter (b/c losing funding is the primary concern, not teaching the kids). Then, when you get to college you get indoctrinated by a host of whacko hippie crackpot professors that can't cut it outside the Ivory Towers.

Unfortunately, if we want our children to have common sense they aren't going to learn it in school. But, then again how many Americans possess anything resembling common sense (e.g. I make $60K so if I take out a $2000 mortgage and a $500 car lease theirs plenty left over for vacation & fun...oops did I forget I have to eat, fill gas in the car to go to work, pay the electric, cable & phone bill).

That's my rant for today, thanks and happy investing!!


On Feb 23 09:10 AM kelm wrote:

> A truly well written article and one which I have to say "amen" to.
>
>
> We have evolved a culture that is sound bite based and in which the
> most vocal majority constantly shouts down those who disagree with
> them. We have a financial media focused on selling people stocks
> rather than providing them with information. All of this conspires
> to keep people buying into myths. I heard these myths recited time
> and time again as the markets declined, like a Gregorian chant or
> a prayer "stay in for the long term, too late to sell, long term
> perspective, must stay in the market, diversified - I'll be saved".
> People fail to read and apparently never learned in school how to
> actually analyze data or analyze an argument for correctness. If
> they had much misery would have been averted.
>
> I agree with your conclusion. Perhaps against the odds the US pulls
> a miracle out but I doubt it. I think the crisis has occurred at
> a point coincident with a fundamental shift in the center of world
> commerce occurring. When we emerge from the crisis we will be a major
> but not the major player in the world. The center of gravity will
> have shifted to Asia.

Currency ETFs: One Area Where There’s Always a Bull

I'd like if possible to know the authors opinion if FXA. Australia's economy seems to be stemming the tide and holding its own (for how long is the $64,000 question). The 7+% yield has had my eye for sometime know, just can't get to pull the trigger during a dollar rally.

Santelli's Chicago Tea Party: The Quest for Our Nation's Soul

Well based on that Cramer link...If Jimmy boy is ready to jump out the window, that must be a good sign we are approaching the end of this mess!

Can Pontiac Turn Back the Wheel?

The only problem I have with your statement is you label the GTO an Aussie ripoff...Take a look at the window sticker on a G8 my friend! The G8 is actually the Holden Commodore (much like the goat was a Monaro).

www.holden.com.au/www-...

That being said, I think using Pontiac as a niche brand to distribute its exciting vehicles from Holden and Vauxhall is actually a great idea.


On Feb 20 09:36 AM oilcan821 wrote:

> if gm had made a retro gto instead of an aussie ripoff, i think pontiac
> would make it in today's world. it wouldn't be rocket science to
> take a g-8 platform, and put a '69 style front and rear end on it.
> with the cool hideaway headlights, judge striping, and things like
> hood scoops and tach. the drivelines are alot more peppy and reliable
> which in a retro body would sell as long as the price is affordable
> (start at low $20,000).

S&P 500 Earnings: 'The Pain of Mean Reversion'

Couldn't agree more...think about it, deflation is good for the saver, dreadful for the borrower. Since our government hasn't been a saver for 20-30 years, they will do whatever they can to induce inflation for their own self interest...regardless of whether that is good for you or I.


On Feb 19 12:11 PM constructe wrote:

> The vaporization of equity, goodwill, real estate, etc. is already
> taking place. The consumer is already deleveraging. Corporations
> are already pulling back. All as they should. It is normal in a cyclical
> downturn. The only one encouraging people, banks, and companies to
> stay overextended is the government for its own self interest. <br/>
>
> Deleveraging is fine as long as it ends in a timely fashion. Prolonging
> the downturn only risks a persistent downturn and the doldums that
> ensue from a multi-year down cycle.

The Great Inflation Moderation That Wasn't

I have, can't remember where (probably on SA). If memory serves correct trend was generally around 3x (ranging from 2.7 to 3.2) until around 2000 when things went parabolic topping out in the neighborhood of about 4.5. Basically what that means is real estate needs to fall about 40% from top to come back to trend.


On Feb 19 09:57 AM Steve Pasq wrote:

> Very interesting charts. Has anyone seen an historic chart of the
> relationship between income and housing prices?

Obama's Housing Plan: Elegant and Costly

I've been supporting a Swedish style bailout from the beginning. If anybody saw CNBC's "House of Cards" over the weekend they profiled a gentleman who earned $47K and bought a $584K condo by lying on his app claiming he made about $200K.

I'm sorry, but no f'ing way should an idiot like this received a DIME of my money!! I'm stuck in the middle of the boondocks b/c I felt it was irresponsible to buy the $190K condo I wanted on my $60K income so I settled for the $130K model 35 minutes up the road. Here this guy makes less than me and buys a house nearly 3x's!!! Gimmie a break!!

And I don't want to hear the "Its Calfornia" excuse b/c I am sure you can get a 3/4 Bdr apartment for less than the mortgage on this place was.


On Feb 18 04:41 PM Chris B wrote:

> It seems like most commenters on this site got a degree from the
> Andrew Mellon school of classical economics at Herbert Hoover University,
> where pointing fingers and simplistic slogans are more respected
> than the lessons and experience of history.
>
> The ideology of "do nothing and let the free market correct " is
> what led to the great depression. There are also consequences to
> weak, mostly symbolic responses such as Japan's in the 90's. At least
> their wimpy response was enough to prevent a depression there. Those
> attempts by governments to save a buck and not overwhelmingly confront
> the crisis cost them a lot more in the long run.
>
> If anyone is interested in the right way to deal with a housing bubble
> - bank crisis, look here.
>
> en.wikipedia.org/wiki/...
>
> The fact that almost nobody has even heard of the Swedish bank crisis
> is testament to the success of its solution. Yes, it was initially
> expensive. Their standard of living is still among the highest in
> the world too.
>
> For those of you who are unconcerned with boring subjects such as
> facts and history, carry on with the politicized banter and bitching.

Obama's Housing Plan: Elegant and Costly

The only thing that makes me feel good about this program is that in reality it will help no one, but its a feel good measure so the government can claim they are doing something.

By capping the program at 105% LTV the biggest dip$hit$ have already been eliminated...e.g. I bought a $600K condo in Bubbleville with a No Money Option ARM in 2006. That $600k home is now probably worth about $400K MAX, and no way the principle value is below the 550-575 range at this juncture, hence this example is automatically eliminated.

Not too mention, I think the most irresponsible people have already walked away or been foreclosed on by now. Just MHO. No doubt it'll cost me more money though. Bermuda, Canada, Australia, and New Zealand are starting to look better by the day.

For Your Amusement: General Motors' Restructuring Plan

Is it really any surprise to anyone, that both of these zombies have their hands out already for more money. The govt should create one large company, call it Zombie Automotive & Finance, and throw C, GM, and Chrysler in it.

Then the govt can throw the finance wing TARP money, which can then be used to finance the cars sales, and the inventory that doesn't sell can be bought back by the government, and sent overseas as "Economic Aid" to some underpoverished 3rd world countries, or used as fleet vehicles for the Feds, then everyones happy...Best of all the taxpayer gets stiffed coming and going, its amazing no one on Capitol Hill has thought of this one already.

How the States Are (Barely) Coping

Actually, it looks like not even 1/2 dozen states use any calculation of federal taxes in your state tax burden:

www.taxfoundation.org/...

I found 4, and 6 others don't have income tax.

As many other posters have stated their problems have to do with over spending during the boom, and ridiculously generous pension payouts to employees (my Moth-in-Law worked for 36 yrs, and retired @ 58 on 85% salary + COLA...if she lives to 84 [which according to SS Mortuary Tables she has a 50% chance of doing] she will have spent 2/3 of her working life in retirement, earning near her full salary), its an unfortunate fact that most state & municipal workers today have their heads in the sand if they think their benefits will be anywhere near as generous.

Barring any major demographic or economic shift to the positive, I suspect within 10-15 years the state & muni pension will go the way of the private industry pension.

I didn't do any research, but I find it hard to believe in this area PA, NJ, NY and DE have NOT seen expenditures grow at a significantly higher rate than CPI and Pop growth.


On Feb 17 01:44 PM Just Say Whoa! wrote:

> "The simple fact is that the states overspent during the boom..."
>
>
> That's not a fact!
>
> Actually, the states all tax people as a % of Federal. Federal taxes
> go down, state taxes go down. That's the "simple fact" you were looking
> for.
>
> The Fed over taxcut the states.
>
> If you look at actual spending, after inflation, adjusted for population
> growth, you won't one state that substantially increased it's spending.
>
>
> Not one.
>

How the Crash Will Reshape America

Actually, everything I'm reading says that Gen Y will be the generation that moves back into the cities. They are looking for a less ostentatious lifestyle than their spoiled boomer parents, and want the benefits of living close to the city center. Urban gentrification in many small to mid size cities will probably be the next wave in the real estate boom. As a person living in the Exurbs of NYC, I'm actually a little scared that 20 years from this place will be a ghost town...be it high gas prices, lower real estate in the city...whatever the catalyst will be, doing a 50-60 mile commute at some point just becomes ridiculous.


On Feb 14 12:22 PM henarl wrote:

> The current generations will not easily give up their suburban McMansions
> and fancy automobiles as they have grown up with the belief that
> such material wealth is the badge of success and self esteem. It
> will take a lot of pain and several generations for a new less ostentatious
> lifestyle to become acceptable, let alone desireable, to the majority
> of adult Americans.