tomcat1945

Our Steroid Pumped Economy

Yes...check out Atlas Shrugged to see what happens when non-producers outnumber producers and the producers are FORCED to subsidize those who choose to not produce and sit back and take ever increasing entitlements. When the scale tips against the producers the game is over. We are moving toward that point at an increasing rate. Yes...the light at the end of the tunnel IS an oncoming train!


On Nov 19 09:19 AM Duude wrote:

> We've actually been on steroids for decades now. Certainly, nothing
> like today, but a true free economy hasn't existed in the US since.............well
> a long time anyway. Consider alone the way we securitized mortgages
> before the government takeover. While Fannie and Freddie's guarantee
> was officially 'implied', everyone worldwide knew the US government
> would step in if they had to. They were right. Otherwise, how could
> Fannie and Freddie achieve AAA ratings with the type of leverage
> that would make a commodity trader blush? Add to that the hard court
> press from government spreading the wealth through home ownership.
> We can even get the Fed chipping in by keeping interest rates very
> low, but first lets rework the formula for figuring inflation (as
> done in the 1990s) that way the Fed will get a pass for reckless
> management.
> But I believe our greatest sickness is our drug-like dependence on
> entitlement. Its not about just social programs, its a frame of mind
> that says, "You owe me, I have my rights".

Why the Stock Market Should Crash

Exactly...It is REVERSION TO THE MEAN. Or...for every action there is an equal to or greater REACTION. This is reality. Those who believe otherwise are doomed to get crushed again...maybe even worse. I'm selling into rallies and hedging my bets that we'll see a LARGE correction...possibly soon. Time will prove who is correct.


On Nov 16 12:58 PM Donald Ingram wrote:

> Charles - excellent article. Agree. House values will recede a further
> 24% - 42% before they find a bottom. With the Feds artificially propping
> up the real estate market and banks holding foreclosed properties
> off the market, or refusing to foreclose so as to not have to recognize
> a failed loan, the housing recovery will endure much more pain before
> a long, slow recovery can take place.
>
> Unfortunately, the tragic part of this, as with most inflated prices
> that fall back to a long term trend line, the price tends to over
> shoot and bottom below the long term trend line, taking that much
> longer to return to normal. This is but one nail in the markets coffin.
> It will crash.

First Call of the Crisis: Peter Schiff Could Be Video of the Year

Maybe CNBC as well...especially Sir Larry. Where did Goldilocks go? How could so many "experts" be SO WRONG??? Most of these pundits were dead wrong and any future "advice" from them should be avoided. And these guys still have jobs...


On Nov 14 12:58 PM Schweizer wrote:

> I wish FOX would replay this on Saturday and ask each pundent to
> publically apologize to Mr. Shiff and to the American people.

Retail Heading Towards Biggest Wreck in 17 Years

Gee...could it be that Goldilocks is losing to the nasty old bear? Some have known this was coming for quite some time...but many have refused to believe it. Are you listening Sir Larry?

Housing Slump Continues: Are Economists Ready For Reality?

I've been a real estate investor since the late 1970's and have witnessed several up/down market cycles. Eventually everything reverts to the historical mean. When prices increase too much...they correct downward and when prices decrease too much it leads to the next up cycle. Not rocket science...just common sense. Those who buy in at the top get hurt and either lose money, or must hang on until the next up cycle to bail out.

The problem with the latest boom is that in many ways it was artificially created...with massive liquidity because of extremely low rates. The current correction may be worse than those in the past. Once liquidity is reduced demand stalls and prices drop. It will likely take longer to revert to the mean this time because prices increased so much in a short period of time. It shouldn't require an economist to figure this out. Just ask anyone who bought at the peak(s). They'll tell you more truths than most economists. It boils down to street smarts rather than book smarts!