mrbill

Why the U.S. Recovery Will Lag

"One of the many reasons is that banks and their willingness to lend will remain under pressure for quite a while."

Never mind the unwillingness to lend, how about the unwillingness to borrow?

Obama (Should Say) to California: Drop Dead

Here's part of the problem:

www.youtube.com/watch?...

On May 30 02:49 PM Market Sniper wrote:

> Spot on! I have lived in California since 1957 and watched as this
> state has, with increasing speed, swirled around the toilet bowl.
> For a long time now, basically a one party state (if that really
> makes much difference!) that is the TOTAL control of government worker's
> unions of various stripes. From teachers, state employeed janitors
> to state employeed scientists. They ALL have unions. Bloated salaries,
> phenomenal benefit packages and unbelievable retirement benefits
> have been just part of the problem. The state will have to go bankrupt
> to clear out the dead wood as well as break these union's backs.
> Basic question: since when do government workers, whose ENTIRE paychecks
> come from the taxpayers, have the right to even unionize or collectively
> bargin? This has been taken to the most bizarre level in the Netherlands
> where the Dutch Army is unionized! Peter, again you point out the
> abysmal absurdity of the situation.

Obama (Should Say) to California: Drop Dead

"Federal backing of California bonds would effectively turn them into Treasury bonds, with the added appeal of being exempt from California state income tax. Therefore, the Treasury will be at a competitive disadvantage when it looks to issue its own debt to Californians. If it then has to guarantee the bonds of all the other 50 states, why would any Americans buy Treasuries when they can get identical credit quality on better terms from the states? The only real buyers left would be foreigners, who are already queasy about the Treasuries they own."

Great point. Which is why I've been saying, look out for a new muni bond tax. This will be the perfect reason to do it.

Is This (Finally) the Bottom? Part II

“They simply have no idea of the power of the free market and the law of supply and demand.”

Oh, but the law of supply and demand can be fixed with funny money.

“If this is the bottom in housing unit sales, it has come the old fashioned way: by prices falling to a point where the buyers were waiting, and the same goes for stocks.”

The old fashioned way? HELL NO. If it's bottoming it's due to artificially low interest rates and the purchase of toxic assets using funny money.

No free market in sight.

Are Stocks Actually Cheap Now?

It's a traders market.

The Financial Crisis Is Escalating Out of Control

“so many people who formally owned their own homes are forced to rent and those who can afford to own rental properties grow their wealth dramatically”

Don't count on it. As home values plummet, so do rents, and more foreclosures on the part of landlords. Lot's of flippers and investors were buying all through 2008. They are in deep s#%t right now.

We need another 20% drop to be inline with inflation. In a depression the value of homes could fall 50% from where they are today. At least, that's what happened in the great depression.

It is very tempting to rush out and buy investment properties. But I can assure you, it's much too early for that:

www.newfinancialwisdom...

And if inflation kicks in and interest rates rise, that will put even more downward pressure on home prices. For many years to come prices will stay down. I'd say a decade at least.

Death of Equities: Part of a Never Ending Series

For the lowest possible risk be highly diversified: stocks (US and abroad), bonds of all types, soft and hard commodities, cash and foreign currencies, even real estate, etc. You probably won't lose any money, but you won't make a killing either. Maybe we need a Total Market (r) ETF?

The Search for a Bottom

This is one of the most sensible articles I've read in a long time. Congrats.

Why I'm Still Comfortable Buying Stocks Despite the Market Lows

"And I certainly have been taking a hit the past few months."

Us bears appreciate your honesty. It's no wonder why permabulls are constantly screaming CHEAP & BOTTOM IS IN.

"I cannot help myself. Stocks are becoming mouth-wateringly attractive!"

Maybe you have a gambling addition.

"Ignore those arguing that stocks are expensive because GAAP earnings on the S&P 500 are going to be $25 in 2008 and expected to be $32 in 2009. That is foolish."

Hmmm... Looks like we should ignore you. What's that saying again, the market can stay irrational longer than you can stay solvent?

Here's what you said:

"I have some cash left, but not much."

You see the point, who's being being foolish in the end?

Nevertheless, good luck.

Orwellian Finance: Is 1984 Happening in 2009?

When you have lots of debt, you need MORE DEBT

Bad banks are really GOOD BANKS, and thus, worth saving

The worst corporations are THE BEST corporations

Inflation is a GOOD thing

Slavery is FREEDOM

And lets not forget, War is PEACE

Basically, ALL LIES ARE TRUTHS and ALL TRUTHS ARE LIES.

Besides "the government", there is a religion that practices this form of deception.

Now consider this:

Good always prevails Evil.

Now reverse the phrase. Thank you and have a nice day.

Consumer Spending: Last Bastion of U.S. Economy in Full Retreat

"There's some hope, however: beauty and health stores bucked the trend and saw December spending increases. So at least the nation's women will continue looking beautiful even as we grimace at our reduced ability to buy them flowers and fancy dinners"

This makes sense. I suppose with all the job losses, lots of women are working the streets and need to look good.

2009 Predictions I Hope Are Dead Wrong

The free market sorts things out when you remove the false sense of security provided by (all) the government safety nets. Implied or real.

On Jan 02 03:28 PM skagitvalleyboy wrote:

> I agree with all of your comments until I read "The governement should
> just step aside, let the house of cards collapse. the free market
> will take care of itself...."
>
> If you still believe we have a "free market system", you must be
> following the herd instead of leading. With all the corporate scandal,
> greed and corruption, not to mention an unlevel playing field for
> American companies, we are NOT a free market system anymore. Was
> WorldCom, AIG and Enron playing in the free market system? I think
> not..... We need to eliminate the inequity of CEO pay, get rid of
> the lobbyists in Washington and get back to some real manufacturing
> in the USA.

2009 Predictions I Hope Are Dead Wrong

I suppose it's no different than real estate agents being "experts" in their fields.

On Jan 02 08:41 AM prudentinvestor wrote:

> Interesting perspective after one looks at Craig's bio. He does not
> claim to be a financial expert, just an educated observer. Given
> how wrong many experts have been, it may be worthwhile to listen
> more to the astute observers than to the "financial experts".

Market and Economy Predictions for 2009

What makes him predict a housing bottom is what makes most people predict bottoms. Wishful thinking:

"I bought my home at/around the peak for $1.5 million, it's now worth $800K... it can't go lower, because near half off is cheap enough already! the bottom is in, the bottom is in!"

And...

"Interest rates are at an all time low ! (broken record realtard mentality), surely THAT will motivate ppl to buy !"

Notice how he says, "housing prices are rapidly approaching a bottom, which should come well before June '09".

Before June, right. Only because that's when housing is strongest. I'm sure it was really difficult to make that call. Next year do expect him to say, "Before June of '10", then Before June of '11, and so on. Eventually he'll be right.

When you make a call based on cyclic observations, you should at least state it. Otherwise you're being mildly deceptive. Everyone wants to be a Messiah nowadays. What a cheap prediction. I'll buy that for... 50 cents on the dollar!

This guy is making the same mistake everyone else is: he believes once the technical problems are resolved (frozen credit markets, you know the rest) everything will go back to normal. It will not happen. We are on the verge of a huge shift in consumer behavior. If you want to make wise investments for the next 30 years. Stop looking at the macro economic picture, and start looking at the micro side of things. There may be thousands of financial advisers, but there are hundreds of millions of common folk that have been spooked by what has happened, and frankly, don't care for all the pork in the end. Hint: sometimes the simplest things in life are the best.

What made perfect sense in '06 through '07 might make no sense at all in '09 and into the next several decades. Start with a clean sheet.