4eyedbuzzard

I Have a Bad Feeling About This Market

Just FWIW, for those who keep harping on the "qualifications" of the author, 98% of those deemed "qualified" by the silver lining permabulls, "qualified" by having either academic, government, or business "credentials", failed to both see and prevent this crisis.

Amazingly though, a lot unqualified Joe 6 pack idiots bailed out of equities into cash between Q4 '07 and Q2 '08, especially when events at Wamu and Bear started foretelling what was to come because, as this author titled his article, they had a "bad feeling about this market."

Just who is "qualified" anymore? Remember, all the supposedly "qualified" gurus called Roubini a Dr. Doom nutcase and dismissed his analysis.

U.S. Debt Default, Dollar Collapse Altogether Likely

Just some thoughts...
Unless currency markets completely fail or shutdown, what is the intrinsic value of gold? Now, we could peg all currencies to gold, but there is no need to do so provided currencies all trade against each other. Gold is only worth what we agree upon as a price, and I don't honestly see how if a complete collapse occurs that gold, even in bullion/coin form, will be a particularly easy substitute for exchange, especially if the smallest coins will be worth $200 to $300 US or so if gold doubles or triples.

What is the new safe haven? I'm really trying to figure this one out. I have enough land to raise my own food and heat exclusively with wood if necessary. Now I seriously doubt it will get this bad, but the fact that I can imagine it kind of scares me.

What I more likely see is more massive inefficient spending and then maintaining the ability to pay the debt service by inflation/devaluation of debt tied to the dollar. That itself is a pretty bleak future, but it seems to be the reality.

So fellow readers, what is the "new gold"? Because metals themselves have very little use in "survival mode". What is inflation resistant and inherently valuable?

Apollo Group's Strong Earnings Are Misleading

So, er, ah, exactly why are all the big insiders selling big positions(@$48M total) if the stock isn't overvalued and the company so healthy?

Thinking the Impossible: Could Bank of America Go to Zero?

Posted by GRS >>>"...The real problem now is "mark to market" accounting...."<<...

I would comment that it is precisely mark to market accounting in the real estate sector, coupled with Fed interest rate policy, that fueled the hyperinfaltion in RE prices and the resultant mortgages that were securitized by them. People profited by cashing out on inflated RE, as did the mortgage originators and banks. And everybody was very happy with mark to market as long as prices kept going up. But that bubble has now burst, and both RE and business equity values are falling to a more realistic valuation. But you can't have mark to market accounting only on the way up when prices are appreciating--when you want it. You have to deal with it on the way down too. The pain from the excessess of both private individuals, corporations, banks, and government will be severe. But we will not move forward out of this crisis until the market sorts out the winners and losers. And no amount of government intervention will do anything other than delay and/or soften the landing.

And then when this is all over, we can look forward to the legacy of additional massive public debt that will have been created, add it to that little SS debt we've been ignoring, and either raise taxes through the roof or print money hand over fist to pay it off with worthless dollars. It just ain't gonna be pretty anyway you look at it.

Wall Street Breakfast: Must-Know News

Of greater importance than Kuwait needing oil prices over $55/bbl, or the US wanting cheap oil, is the price Russia needs to break even or realistically, at least to bleed less profusely. Estimates are that they need $60 to $70/bbl oil. I would expect that to occur sooner than later, as neither the US nor Europe really wants to deal with the world's 2nd biggest nuclear power going belly up in a global depression.

<$40/bbl oil is just as unsustainable geopolitically as is $140/bbl oil. Starving a powerfully armed economic adversary isn't particularly thoughtful policy...

2009: Expecting a Massive Rally

All the technical analysis in the world doesn't change the underlying fundamental problems, the biggest being the massive overleveraging of all the players: individuals, corporations, and government. There are a lot of Pollyanna Permabulls out there calling market bottoms and telling us "Wall St. is on sale". Of course, these are the same people that can only make their livings in bull markets. Unemployment and losing their home is a real fear for over half the population. They've seen a large portion of their life's equity in their homes and investments destroyed under an unsustainable fiscal model and are now in capital preservation mode--as well they should be.

Charts and tech analysis are meaningless when you are forced to consider REAL future needs such as shelter and food. People don't gamble(aka invest) with that money.

Not to worry though, as we see with GMAC/GM/Cerberus, if Joe six pack won't continue to overleverage himself to support the unsustainable fiscal model, Uncle Sam will print it, spend it, and tax him for it later.

Current Economic Outlook: Reasons to Be Positive

I'm also very optimistic--that short ETF's will profit in 2009. :p

What a moronic article. Well over 50% of the population lives paycheck to paycheck, and half the remainder isn't more than a few months from living in their cars as well. The average working person has lost most (if not all in many cases) of their home equity, seen their IRA's / 401(k)'s devasted, and face the spectre of unemployment with only marginal unemployment insurance. The only thing moving quickly upward in 2009 will be unemployment rates, foreclosures, and bankruptcies.

The Pollyanna Permabulls are smokin' some primo stuff lately.

Estimated Earnings Growth for the S&P 500

90 percent of the media is trying way too hard to put a positive spin on the reality of the situation. Note that most all of the bullish "now is the time to buy Wall St at a discount" pundits are money managers who have their financial futures tied to a resumation of a bull market--the only kind of market they have ever experienced from a long term perspective. The problem is that most stocks cannot be valued on past earnings given the current multitude of problems--corporate and individual debt to equity ratios, consumer and corporate bankruptcy, deflation, trade deficit, national debt, etc. Forward earnings forecasts are not to be taken at face value given the negative nature of the future economic climate. The Fed rate could go(and technically has gone) negative and it won't matter. No one will chase yield in a deflationary cycle, even if dumb Joe 6 packs like me don't know what that is ;). Society is hunkering down--which is exactly what it should be doing, albeit 10 years too late. Capital preservation is the only game in town right now. Hedging against hyperinflation will likely be the next to come in perhaps late 2009, early 2010.

What are the major indices really "worth"? No where close to the current valuations. Take away the taxpayer bailouts and let nature/markets take their course and Dow 6000 is probably a more realistic value of where we truly are.

I wish it all weren't so. As I told my kids the other day, I'd gladly trade this mess for $8/gal gasoline. That situation we could address and mitigate. This one is beyond control.

GMAC: Why the Bond-Exchange Silence?

Perhaps some bond houses that are holding out(like PIMCO et al) also hold CDS's that would pay them more in the event of a default than GM is currently offering? Just wondering...

Stupid Is as Stupid Does: The SEC and CFTC Legalize Electronic 'Gambling'

As opposed to say ownership of stocks, which largely fits the same description(speculativ... no direct connection, mongering for profits)?

There's a simple solution to the CDS problem: if you don't want to insure 'em, don't write 'em.