sleepless_on_wall_street

Housing Is Moving Towards Disaster

JL, thanks for a good article and adding to the comment stream discussion. I thought the comments on this article were excellent and brought out a lot of additional details.

Pay to Play

I am not surprised that the club members (or board members) had the reaction they did. If they were politicians, it would be a sure thing.

100,000 Homes Worthless?

Some of these homes may be so far below original cost that the economics are not supportive of extensive renovation. It mat be better to write them off and move on, rather than throw good money after bad.

Speculator Money Still Pervades Shipping Stocks

Ricard - - -

I think you are being too critical of the use of technical tools. For those like me, who invest primarily on fundamental analysis of individual businesses and economic outlook, I use those tools to decide what I want to own and what I am ready to sell. I use technical tools to help me decide WHEN to buy or sell. I find this process has often helped me to get into positions that are ready to move in my favor. It makes it easier to establish stop loss protection that does not get me quickly stopped out with a double digit (percentage) loss.

The State of the Construction Sector

Isn't construction activity one of the areas of the economy that tends to most lag in the economic cycle? Lead times on commercial construction and infrastructure are quite long and so construction activity tends to continue into the downturn and new projects not to pick up until the recovery is well underway. Housing tends to respond quicker. That is what appears to be happening in the current cycle, as well.

A Tale of Two Banking Worlds

Does anyone want to offer some analysis (or even opinion) about why I should consider buying C? I have read some commentary the past couple of weeks recommending C as good investment, but I didn't bookmark anything so I don't where these comments might have been. I don't understand how a bank that appears to be undercapitalized (if you believe the stress tests) and is losing many billions quarter after quarter from operations can have any prospects other than selling off assets until it goes out of business.

Anybody want to enlighten me?

Why Isn't the Dollar Falling?

nobby73, you make some very good points, but don't many of the countries on the list have bigger unfunded liability problems than the U.S.?

Goldman Sachs: Not So Confident After All?

Agree with what the commenters had to say, but the author points out that the most recent year saw much above the normal stock sales by insiders. Was that just a coincidence?

No One Saw This Coming?

Wow! I am going to have to read this a few times. The first time through just swept me away with the common sense arguments that Bezemer presents, helped by the author's connective commentary.

Are Financiers Overpaid?

The topic of this research paper and its conclusions are intuitively obvious. I got a better feel about compensation in the finance sector from your earlier article and from an article in the Atlantic Monthly by Simon Johnson. On the other hand, this paper was published well before the other two, so maybe this work has guided the intuition.

Thanks for reporting on this.

True Unemployment Numbers

This article displays some great thinking outside the box. This shows what can be done with the data that is collected by Dept. of Labor if some original thinking is done.

Florida Home Sales Increase for the 9th Straight Month

There is more useful information in the two preceding comments than in the article, although the data presented is useful. The commenters did something worthwhile with the data, something that author did not do so well.

More Doom and Gloom From Overseas

So many things are outside the realm of "normal" for this recession, it is difficult to understand how so many are so optimistic that everything will return to something like the conditions of the last couple of decades. I especially appreciate the reference to Goldilocks cheerleaders - sometimes that is what the optimists seem like. I am thinking of people like Kudlow, Cramer and SA's own Mark Perry.

Animal Spirits, by Shiller and Akerlof: Questioning Economic Motives

John Mason,

Excellent review. I have two comments to add.

1. The motives you describe are "confidence, fairness, corruption and bad faith, money illusion, and stories". Governments and markets are both composed of people and therefore both have motives, as well as animal spirits. Sometimes government is in conflict with market participants and sometimes reinforcing. The reinforcement can be, at times, in unintended ways. Your review suggests that the authors have not developed this idea completely. (See the final paragraph of your review.)

2. You wrote: "Furthermore, the models that we use are relatively adequate and not absolutely adequate. That is, the models we use need to be logically consistent and be able to predict at least as well as any other logically consistent model. By definition, irrational behavior can produce contradictory predictions and, hence, are not logically consistent."

I think you should have mentioned the possibility of false premises based on modelling to historical data. The ability to predict the future based on the past is fraught with peril. How can we know if models are "logically consistent and ... able to predict at least as well as any other logically consistent model?" The future has not happened yet. Models can not be overly depended on to predict the future, but, in reality, only best be used to understand how out of sample situations differ from the in sample model data. Models are only be evaluated for logical consistency when looking at what has already happened. When making projections about the future, they fall in the category of educated guesses.

Can the Banks Work It Out?

Very interesting article and discussion (comments). I liked Tom Armistead's labelling this type of analysis as a "reality test for the stress tests".

There seems to be a vocal group advocating for some structural changes in the financial system. What are some of the change options? This is something for which I would like to see some specific options discussed.