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.

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.?

A History of Market Violence

Chris B, outstanding comment.

I have been thinking about the differences between 1928-1931 and 2006-09. You have been very thorough in suggesting some of the differences. This could be worth a lot more discussion.

For example, had Roosevelt been elected two years earlier and the New Deal was started in 1931 instead of 1933, would the depression have been shortened or made worse? I don't know the answer, but I'd sure like to hear a discussion from more knowledgable people. (Or even from more opinionated people.)

Again, Chris, thanks for opening a subject I have been wondering about. Your comment definitely adds to the value of this good article.

Do Equities Want to Rally?

morph366 - - -

I also would like Jason Laurent's views on what he envisions with "sooner or later the market will offer the best entry points in a lifetime".

Does he envision a further steep market decline a la 1929 - 32? That would be the best entry point in two lifetimes, except for those over 100 who were old enough to invest in 1932.

Does he envision a soon to come market bottom followed by the second half recovery being predicted by the same people who one year ago were predicting the same thing for 2008? If these prognosticators are right this time, buying at a soon to come bottom would be one of the best entry points of the current generation (like 1974-75) but not really the best of a lifetime.

Maybe Jason has something else in mind. If you read this, Jason, please consider re-entering the discussion.

Do Equities Want to Rally?

How many people have you heard predicting a recovery starting in the second half of 2009? Including Helicopter Ben? Are these the same people who predicted a recovery in the second half of 2008?

This article shows what is really happening. So, is it more likely that the best we can hope for in the second half of 2009 is that the collapse slows? That is what I hope for. Recovery? Who knows. But, maybe, we will have a bottom by sometime in 2010, and, although a recovery may not be noticable, at least do no worse than go sideways.

Invest for dividends? Good luck not buying a dividend cut.

Macro Man, thanks for the solid data. Good article.

Reversion to the Mean for Equities

sabre_jenn - - -

Sorry, I hit publish too soon. John is a neighbor of mine and as far as I know has no relationship to SA except as a contributor and commenter.

Reversion to the Mean for Equities

sabre_jenn - - -

No.

One Scary Unemployment Chart

If we have two more months of 500,000 job losses we will be in territory not charted in the past 50 years. The second chart is scarier than the first because it shows that potentiality.

Wall Street Breakfast: Must-Know News

I can't find fault with most of the complaints made by commenters. But I would like to think there is something better than having a "French style revolution". Can we have some proposals on what to do going forward? I would concentrate on defining how to prevent "too big too fail" from happening in the future:

1 Determining what was done by the "titans of Wall Street" that was counterproductive to proper functioning of the free enterprise system, prosecuting anything that was criminal;

2. Legislating to assure that which was technically legal, but hindered free markets from functioning efficiently, will not happen again;

3. Putting controls on those accepting government assistance that will assure the money is not abused and repaid promptly with interest.

We are where we are and we need to go forward in a positive way.

New Bear Growls

I have to agree with The hand, the market seems overvalued now. The only argument for not being overvalued would be that PE ratios are not seriously out of line for the current very low interest rates. For the first time in decades, dividends are larger than treasury interest rates. This was the norm in first half of the 20th century, but hasn't been the case most of the time since the 1950's.

To invest on this basis, though, requires the belief that interest rates will remainat extreme lows. I feel that can only happen if we remain in deflation and that would likely only happen in depression. In depression the E in PE would likely continue to shrink and prices would have to drop just to maintain the current PE.

Therefore, I feel the The hand has the right thinking for almost any scenario except for the situation of being close to the bottom of this business cycle (3-6 months), and I don't anticipate that until at least the end of 2009, probably later.

Will There Be an Obama Bounce?

So many people are looking for the Obama bounce that I won't be surprised to see the opposite. All too often the majority are wrong when it comes to investment markets.

Trillions and Trillions: The National Debt and Where It Is Going

IMO, the most optimistic outcome is inflation. That is a terrible way to be optimistic.

'The Change We Need' Is in Economic Direction

This is a paraphrase of a comment I just wrote in another comment stream.

The old religion was the use of credit (debt) to produce more credit.

The new religion should be the use of credit (debt) to produce the means of production of goods and services.

The old religion is related to Ponzi.

The new religion is related to economic growth.

Airline Rescue, Obama Inauguration Provide Hope for Troubled Economic Market

One comment: The title represents one of the most extreme cases of grasping at straws I have ever seen.

ECRI: Economic Recovery Not on the Horizon

Mr. Hansen, you recently made a comment that you felt the NBER could have called the start of the recession in 3Q/2008 (rather than December, 2007). Since WLI was already negative in January, 2008, I wonder how this indicator relates to the start of a recession. Can you comment on this?