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How Will This Depression Differ from Previous Ones?

Baloney... this is a deflationary depression. How can we have any inflation with the value of real estate falling? We can't... I just read that the NBA had to borrow money for some of it's weaker teams. That means that player salaries are next on the chopping block. See... DEFLATION. By the way, the "safety net" you refer to as wasted money actually helps the economy. People spend that money...

A Whiff of Reflation in the Air, Part II

Baloney... the CPI is worthless- it includes only rental costs not home prices. Write this down so you don't forget it- deflation will continue until real estate bottoms. Commercial real estate is just starting to collapse. The Fed can print money will the cows come home and if it is not being spent their is no inflation. Unless the Fed starts handing out dedit cards no one is going start spending so their will be deflation and more deflation. This has to happen to remove the worthless credit and it's effects from the monetary system.

In Praise of Suze Orman

SUZE ORMAN GIVES GENERAL ADVICE THAT IS OFTEN DANGEROUS. FOR EXAMPLE SHE TELLS PEOPLE TO NEVER USE A HOME EQUITY LOAN TO PAY OFF CREDIT CARDS BECASUE THEY CAN WALK AWAY FROM CREDIT CARD DEBT. THAT IS FINE UNLESS YOU DEPEND ON A CLEAN CREDIT REPORT FOR EMPLOYMENT. THAT IS MORE PEOPLE THAN YOU MIGHT THINK, EG NURSES THAT WORK AROUND NARCOTICS. SHE NEVER TEMPERS HER ADVICE, SHE LEAVES THAT FOR THE LISTENER TO FIGURE OUT AND AS YOU POINT OUT THOSE LISTENERS ARE NOT THE SMARTEST.
ALL YOU HAVE TO HEAR FROM OL' SUZE IS THE INTERVIEW SHE GAVE TO CNN MONEY 6/19/2008. SHE RECCOMENDS EEM USO AND XME. THAT IS EMERGING MARKETS, OIL AND MINING ETFs. SHE IS THEN ASKED IF THOSE ARE BUBBLES. SHE GIVES AN UNQUALIFIED "NO, I THINK IT ABSOLUTELY POSSIBLE THAT YOU COULD SEE OIL GO TO $150 OR $160." THAT IS DIRECT QUOTE, I HAVE THE ARTICLE IN FRONT OF ME. THAT IS VERY IRRESPONSIBLE ADVICE. THE SHAME OF IT IS NO ONE HOLDS HER FEET TO THE FIRE ON IT. SHE HAS NO ACCOUNTABILITY. IF YOU LIKE SUZE YOU MUST BE AS STUPID AS SHE.

Has the Economic Crisis Wrought a Permanent Change in Consumers?

Finally someone with some perception of reality. This article is spot on, the American consumer will never be the same. You did forget to mention one important fact- the housing bust and the soon to be credit card bust have created millions with sub par credit that will not to be able to borrow at good rates (if at all) for a long period of time. This will also create a drag on consumer spending. The average American is about to get exactly what they deserve. After years of inane spending and credit the bill has come due. Me? I am 95% cash (day trading ONLY!!! in small short positions) and debt free. This is the greatest thing that hase ever happened to me. I love America!!!!!!!!

U.S. Government vs. the Stock Market

This week is the first week the new administration has a chance to implement plans to fix the economy. I agree with you that it is a titantic struggle between the "let me fix your problem" gov and the actual news. Last week was a great example of the market being irrational. The worst employment report since 1974 and the market goes up based on the hope the US Gov is going to fix things. That is a joke. I try not to trade trends that buck reality so stayed out of it. There is no question that the only way to play the market is go short, the only question worth asking is when to get in.... For now my bet is to trade the ultra short ETFs and time my trades in hours and minutes. Buy and hold? Good luck with that... unless you are Warren Buffet and have Goldman calling you with a special deal you better learn to hit and quit it or get out while you have the shirt on your back.

The Inflation / Deflation Debate

Does it really matter how much money is in the system if people are not spending it? Of course, the anwser is NO. I am glad that you acknowledge that the gold market is just a casino and not the final solution to our monetary woes. But until the US consumer returns all assets will continue to decrease in value. Is this not deflation???

The End of the U.S. As We Know It: Tracking the Dollar Downward

How can we have inflation without the real estate market moving forward? The Fed can print until we run out of trees but without consumers spending there will NOT be inflation. Therefore NO price increases, NO collapse of the dollar, just more and more deflation. Your stocks are not going to worth as much as they were, your home is not going to be worth what it once was and you will make less money than you did in the past. China and Russia are going bust and will fall into civil strife within 3 years. Latin America and the rest of Asia (except Japan) will be OK but not great. Canada and Europe follows the US into a prolonged recession that makes every thing but the Great Depression look like boom times. But it still looks like the good life to the rest of the world. When the history of the Great Moderation is written it will all come down to one word- deflation. If you listen you can hear the air leaking out...

On Buffett and Derivatives: A Review of Janet Tavakoli’s 'Dear Mr. Buffett'

Buffet has not recently invested in the common stock of a large company but rather has purchased preffered convertible shares under terms John Q. Public could even dream of getting. If everything is cheap as Buffet indicated in his NY Times article then why is he not buying? The "special" preffered shares do not count. What should we buy Mr. Buffet?

Sentiment Overview: Good Odds for a Rally?

The average American is more wary than ever of the stock market so I don't look for in flow from funds any time in the near future. Recognize this time for what it is- a seminal period for American economics. The recession is just getting started for real, the market has another 20% to decline and the recovery will be anemic in comparison to other recoveries. Nothing will more forward until real estate recovers. Is there anyone that sees that happening in the next 6 months? Hold your cash, don't take on any debt, don't invest, and pray.

WSJ Weighs in on Peter Schiff

Saying the real estate market is going to tank 4 years before it does means nothing. What if you took a short position in real estate 4 years ago? Every time there is an economic crisis the few poeple who predicited it at some point look smart for a short period of time. If Schiff is so smart why are his funds down so much? Because like the rest of us he has no idea what twists and turns the future holds. Quit wasting our time with his drivel.

Exclusive Interview with Jim Rogers: Inflation Is Coming

Please stop printing what this idioit says... all he ever does is try to pump up his bets on markets and currency. Where is the $200/barrell oil? What happened to the dollar collapse? Any moron can say oil is going to go through the roof and at some point in the next 20 years they will be right. Mr. Rogers didn't call the fall of oil this summer or the current strength of the US Dollar. How 'bout the China Market these days? He said 10 years ago China was going to boom and you want to call him a genius? Just another minion of that bastard Soros.

Let's Have Inflation

I don't think we will see inflation any time in the near future. The US consumer has to come back to the table in a big way to start us on the path to inflation. That is not happening because the consumers that want/need credit can't get it as the banks have turned off the faucet for anyone but prime borrowers. I know- I work at a bank and we are not loaning money to consumers with lower than a 720 FICA score. The consumers that can get credit don't want any... they want to pay off existing debt. Americans have layers of debt they can pay down. Every day Americans pay down debt and spend less than they earn deepens the deflationary conditions as residential real estate LOSES value. Residential real estate is the key driver of deflationary conditions. The American home owner is the real driver of the economy. For years the home owner has borrowed on the equity of their home and inflated the economy with funny money. Funny money is money not created from actual value but rather from the idea that an asset is worth something and will be worth more in the future. That funny money is gone as is much of the value of the assets from which it was created. Most experts are not predicitng the residdental real estate market to recover until 2010 and that is not written in stone. What if it is 2011 until recovery and what if 2011 is just the start of the bottom? How can you have inflation without appreciation in residential real estate? Don't apply what has happened in previous situations. We are now going down a different road.

Banks Not Lending Anymore? Simply Untrue

Thank you for telling people the truth. One thing that is a constant drag on our economy are the talking heads that all too often use fear mongering to drive their rating and readership.

The Banker: Not a Clue

I wish that everyone would stop their moaning about "where are the TARP funds". The banks are using the money for 1 of 2 things. Either they are suring up their balance sheet (keeping them out of trouble) or they are buing another bank (keeping that bank out of trouble). The US Goverment knew the money would be used this way from the start. Brcasue they knew the FDIC could in no way handle the number of bank failures in the pipeline. Take for instance Wachovia, they were bound to fail. Wachovia had about $170 billion of insured deposits. The FDIC has about $40 billion of reserve. That dog won't hunt.
The FDIC has over 120 banks on it's watch list. Remember IndyMac was never on their watch list. So rather than admit the banking system was failing to the public and casue a panic the Fed and the Tresuary came up with TARP. Why else would they give complete control to Paulson? Why else would there be so little acounting of the use of the funds? I don't really like it myself but there was little choice in the matter. By the way, things are only going to get worse for banks as the recession takes hold and their commercial loans start to go belly up.

The New Normal

I think you are on the right track Tom. But I don't think the big push from the US gov is going to reinflate the ballon this time. Consumers are done. Look at the retail numbers for Christmas, for once the American people shunned the idea that the only way to show someone you care is to pump up your credit card balance. Christmas is hallowed ground for consumerism but for the first time in a long time the American consumer passed. Historically this will be known as the great moderation as people choose to live a frugal lifestyle. American society will look very different just 3 years from today.