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Wasn't there a report last week that vacant homes on 12/31/08 stood at 17 million? (Actually, I thought they said 19 million homes). This was due to, per the report: foreclosure, abandonment of home, forced sales, and regular sales.
Even if we see an uptick in home mortgage apps, a portion of those apps will be refinancing and the other portion will be current purchases. How long will it take to buy up 17 (or 19) million vacant homes????
Mike... I know I'm trying to catch up, but this is a comment from a New Yorker today right after the initial jobless claims 'Marketwatch' bulletin hit the internet:
"Here in NYC "pink slip parties" are all the rage. It is an opportunity for unemployed people across all industries to network and pass out resumes. They are depressing as hell. By the end of the night everyone is extremely unhappy and very drunk because they all know its just gonna get worse. "
Gulp....Gulp....
Anything you saw on national television about the state emergency in Kentucky is absolutely accurate!!!
We have been without power for eight zero-to-22-degree days. The power runs the pump for water via the cistern... so... no running water!
I was the designated water-girl & brought water over the ice/snow to the house in 5-gallon buckets. JW ran the buck stove, temp lights, & cooked right along side of me. The farm looked like a winter wonderland (exactly the scene in Zhivago) but with far more ice. My labs could not keep footing & slid everywhere!
I have no idea how the cattle or horses made it except that JW fired up the John Deere & fed them twice a day with huge roll-bales. Without power, his diesel F-350 wouldn't start... my Outback couldn't even navigate. For the first time in either of our lives, we were stranded & no one could get to us. It was quiet... no lights anywhere... and we both exchanged another round of fever & sickness while going through all that mess. We are terribly lucky!
But alas! I made it to work yesterday after a week, spoke with Richard (who was rightfully concerned I might add) & today I can post. Granted, without power the world & its news goes by without notice & I feel sooooooooo disadvantaged with regard to markets or what's happening in the world. I'm sure I'll catch up, but it will be a while.
I DID, however, get the news that we finally have two official back-to-back quarters of negetive GDP and, therefore, we have a true-and-legally-recognized recession! We now know that it is 'worse than a muddle-through'. This should give us the warm & fuzzies, no??
I have to get back to the house. JW called & said the electice crew is there!!!! Happy days are here again!
Talk to you all later,
Elena
If they keep the "bad" receivable on their books, and have a corresponding "owed to the Treasury", the effect is nada. If they collect the debt, then they must repay the central bank for the monetary injection they received for it. Alot of sweat to tread to nowheresville.
This is the apathy created in the banking system there--> no incentive to collect or write off because it just means that they pay it to the central bank. So, the drudgery just keeps occurring year after year.
Say! Do you think our super capitalistic & energetic bankers want to aggresssively go after profits so that they can pay back all those tarp funds?? Those BILLIONS and BILLIONS of TARP funds???? Do you think they might become apathetic too??? Oh dear.... not in today's world!!! Surely not!!
And, should he have said "DOW: 4,000"... just drop a digit... then would we have remembered him??? Who'd believe that the most pessimistic of all investors are, in the year 2009, actually letting the possibility of DOW 4,000 be a subject of journalism.
My, how times change!
On gold--> the theory is that it is a 'store of value' (as you wrote). Therefore, if a handful of gold will buy a refrigerator (now), then (regardless of currency value changes worldwide) a handful of gold should still be able to buy a refrigerator in the future. So, theoretically, no gain-- just a 'store of value'
Now then... if currencies are bombarded via overprinting, then it is possible (in today's environment) that we will be able to buy TWO refrigerators with the same handful of gold if deflation brings down the price of refrigerators while, at the same time, the gold price remains level or increases. It would be an enormous gain in the rare economic occurance of deflation. This is the first time (that I know of) that the free market sets the price of gold DURING a deflationary period. Not much written about how that environment might affect holders of coin or bullion.
I think it can preserve value and provide PROFIT in deflationary times...
What are your thoughts? If so, then the question would be to hold bullion? stock in unhedged miners? CD's tied to gold price? ETF's?
Hey, can George use this post for his "2009 Predictions" ?
Well, maybe not.... we need 5 predictions & if I stretch it, there are only 3 here. Can you make a post with 5 on it so that we can save it & see how we did?
Actually, it doesn't sound crazy. Bloomberg reported (this morning) that the financials are close to a retest of their November lows. They may possibly be the first there, & might be the first out.
I'm not so sure your ETF's wouldn't squeeze out that move (should it happen).
I understand & agree with most of what you just posted.
Except one thing: the taxpayer IS a holder of equity in these firms via the 'new & improved' use of tarp funds. I've read 'warrants', 'preferred', etc (which all equates to the equity section, no?). If the FDIC takes over the bank, sells off the assets, & leaves the equity holders holding the bag (TARP fund issuer being an equity holder), then isn't the taxpayer going to eat the loss? How could it not? This comes from your statement:
"By foreclosing and processing each insolvent bank through the FDIC, the loss can be contained to less than 10% of the $2 trillion in missing capital, or even create a profit for the taxpayer. The loss belongs to current bank shareholders and bondholders, and real estate speculators - not the taxpayer."
That was a very, very powerful message. I also envisioned an unsaid comment "you will be judged by the things you fix, not what you gripe about". That came from his references to changing our politics to more constructive means, community service, and other subjects.
It's nice to have you back. We wondered where you went!!! Whereever it was, you're still with us (and that is great!)
Your post yesterday made me wonder what (specifically) you thought might be a good move... not the "red ink" move you said would happen to those jumping in early. What are your thoughts?
Yes, for a foreigner. "Not necessarily" for an American.
Hey, I edited that last post. Can you give it a 're-read'?
Phewww... it's taken me a long time to catch up! I've been sick (fever, cough, all sort of YIKEY) since last Tuesday. Whatever it was, a Z-Pak almost didn't get it! I'm on the upside now....
I've been following your signals about T-Bills. You are talking the two-to-ten year instruments, no? On one hand, they say there is a bubble & that folks will bail. On the other hand, the Central Bank will be buying those instruments to influence the price of the 10 & 30 year -- mortgage rate pointers -- and that a 'flight' from the bubble will be absorbed by that Central Bank activity. What are your thoughts? Would it then become a bubble that does not break but rather is orchestrated to fizzle?
And, on short term treasuries, they will benefit most if the interest rates actually move higher, no? If they do not move higher, then a short term treasury only brings about a 'ho-hum' return. The issue of 'safety' comes up to me as an attractive lure in short term treasuries as there is 'no breaking the buck' and there is no reason for FDIC insurance or limits. The new 'raised limits' for money markets only protects the value of the money market level invested as of Sept. Any additions since Sept are NOT covered. If a new & improved downturn would happen... akin to the Sep/Nov '08 downturn... then wouldn't the question of bondholder & common stock holder capital preservation be a big issue? It's hard to read that 75,000 businesses are anticipated to fail this year without also considering that bond/preferred stock/common stock blow-ups of those businesses will also blow up--- and that brings about another whole series of ripple effects.
So, wouldn't you think that short term treasuries are not such a bad place to park money? They have outperformed the market for 7 years (or so they report) without one penny of losses. I know that Nick likes CD's as they bring a higher return rate. What are your thoughts?
If the banking system collapses, then the economy collapses. Iceland is a prime example & the Feds k-n-o-w that a solvent banking system is the core focus before anything (whatsoever) can turn around.
They are focusing on 'solvency' right now; the handslaps & handcuffs will come later. I trully believe that they must get this solvency issue past us 'now' and deal with the source/responsibility issues later.
The problem then can become a 'shift' in solvency away from the banking system & firmly set upon the solvency of the rescuing country. How could it be otherwise? I can't help but feel that someone who was the 'last sucker to buy high' (and, who bought a $10 million home now valued at $4 million) wouldn't be pleased if the government came in & bought the house from him for $10 million--- making the seller solvent and making the government become the 'last sucker to buy high'-- & shift the insolvency issue to the government.
Then, again, should the gov't back off of the 'buy high' plan (as it actually did), then investing in the homeowner -- providing him with liquidity -- doesn't necessarily remove his solvency question as he still has a $4 million dollar home which he bought for $10 million. If he finally sells the home & takes the loss, then the loss is tranferred to the investor, no? Either way, this intervention into a 'bad deal' yields the same outcome--> another 'bad deal'.
Not necessarily a 'nice lesson'... it's more like having to swallow a bitter pill.
Actually, the 'little guy' doesn't just take it on the chin & keep silent. He bitterly feels that the 'big boys' are stealing from him.
Take a market that is heading down & giving signs that a uptick will not occur anytime soon. Given all available info, the Little Guy sells. Moments later, the stock goes higher... into orbit... and the Little Guy feels like he just got fleeced.
He can only take sooooooo many robberies before he builds his fortress & refuses to let the Big Boys have a stab at his money again. He realizes that the odds are NOT in his favor.
What he doesn't necessarily realize is that the Big Boys are vanishing after decades of Prime Time Robbery. In 2008, the market bit back the Big Boys & put them out of business. This might be a turning point in market trading as the salivating Big Boys are not manning the keyboards anymore.
Possibly, the Little Guy might have a chance in a trading world that is definately changing. I just hope it's a "good" chance.
Then, we should publish "Survival for Dumbies"... or "Survival for Dumbies, Fatties, and Couch Potatoes"?
Yeah... must be in the model...
And the model, which he states (paraphrased) 'levels' out points of extremity, that 'leveling' smoothes several years of reported income. 2008 was a 'jolt' year which compares only with periods d-e-c-a-d-e-s ago. The estimate for 2009 must, if he is telling folks that the real value is Dow 15000, be FAR lower because... hrummppphhhh (throat clearing!)... the smoothed out earnings are actually reporting value sometime in 2010-2014. That really doesn't help folks who might pull the trigger in 2009.
This is not to steal his thunder for optimism, but it's just trying to signal that it's 'not just optimism in the right time period'.
JMHO
I do NOT understand how he can value today's market (and the upcoming 2009 performance) on prior "filed Tax Return Income" -- which he states is the only true income -- when the 2008 taxes are, for the most part, not yet filed!
How does THAT work???? If the 2008 'filed tax return income' shows that it's a bomb (or close to it), then the projected market valuation numbers are all very, very wrong.
Actually, I remember them too! Those are some of the conversations that I am referring to.
But, to read the papers, no one who is 'accountable' saw it coming?? I guess only the 'unaccountable' saw it coming??? (well now... I'm glad that I am in the ranks of the unaccountable!)
On the speed which it happened: Elliottwave nailed it. They called for a 3rd wave down (the most destructive of all waves) and, to boot, a "3rd wave WITHIN the 3rd wave". Let's just say that it's a Wave 3 of 3. I can give you oodles of references to their writings saying that the wave 3 damage will be d-e-e-p, wholley destructive, and will be furious (as a fight to the death with a grizzley). Frankly, I didn't think they were right about the quickness... usually things seem to play out longer (with FOMC intervention). But, alas, they nailed it.
Now then... THEY are accountable to their 'unaccountable' subscribers, and they get high marks from me.
Or the Little Red Hen who worked & baked... no one would help... but everyone wanted it because they needed it?
Gaaads! That is sooooooo funny!!!
Next to need stimulus money: Cockroach Research Institutes of America! Who needs to fund small planes when we're busy keeping down the cockroach population??
Kind Sir: We need to focus on what's important to people.... cockroaches can not be tolerated.
No joke. They'll lower the excludable Estate ceiling & take the motherload in taxes at death; they'll raise the pension/profit sharing distribution taxable rates; they'll change the rule on ROTHS & make the income taxable; and they'll consider raising (yet again) the retirement age for full benefits. Can you come up with more innovative ways to seize wealth to pay debts?
The boomers will have no where to go... their wealth is higher than that of their children & it is only a 'pen-stroke' or a 'passed legislation' from being seized via new taxation or change of rules.
Murphy's law.
How much bunk could a woodchuck chuck if a woodchuck could chuck bunk?
And roads use asphalt.. RS2 oil... hmmmmmmmmmmm...
I am sooooooo tired of everyone claiming they just "couldn't see this coming". They were PAID to see this coming. Yet, the media broadcasts the whine & wants us to swallow it.
Simply put, the posts on this thread (alone) saw it coming. We posted a massive amount of links to authors who ALSO saw it coming. So why, if all he had to do for 40 hours a week, was keep a pulse on 'things to come', didn't he 'recognize the serious possibility of the extreme circumstances that the financial system faces today' ????
If all I had to do was buy into the (sic) theories 'buy & hold'... 'markets always go up'.... 'there will be a better tomorrow, ignore the contrarians no matter how valid their argument'... 'remain positive & bullish'... then.. with a staff that gives a positive feed-back loop... I could do the job better than they did. At what point did all the indicators of debt, risk, leverage, manufacturing/service industry transition did they NOT recognize as 'extreme'??
Gaaaaaaads, this really ticks me off.
It's always easier to write that $500 check to accompany a return, but "withholding" from paychecks is considered to be "deposited timely". What I mean by that is that if the taxpayer gets the $500 onto his W-2 (even if he had the entire amount withheld on the last payroll of the year), it might help them avoid the penalty imposed for 'not having enough withheld'.
It just removes the risk of gov't assessment. That's all. And, for alot of taxpayers in the 'first time homeowner' category, it's not always easy to cough up the cash at tax time. I'm always siding with the 'cash strapped' & "how to beat the system" crowd... thus my recommendation.
Otherwise, you are absolutely right!
It is pathetically predictable that advanatage would be taken of the risk-adverse, fixed income investor as it is the polar opposite of the (Bernie Madoff) high risk, wealthy investor.
It should get top billing on the headlines. Additionally, it is only speculative as to 'what lies between' these two polar opposites.
This is a disgusting, blatant failure of Oppenheimer to monitor their funds & to keep their fund investments within the constraints of the prospectus.
I hope the retirees/fixed income investors take a chunk out of Oppenheimers' hide.
Oh god! That was funnnnnnnnny !!! LOL!
Here's a good link that tells it all. An excited homebuyer might read everything here EXCEPT #16 - #18. Actuallly, #16-#18 are the most important questions! I thought some of your employees might be interested in the facts just in case they qualify for the credit...
http://www.federalhousingtaxcredit.com/faq.php
Gaaaaaads... it looks like a piddly 'less than one percent' return on savings might be a good deal, no? I can understand (now) why you bought 5 yr cd's for some of your clients!
Thought you might want to be enlightened by how the $7500 tax credit for first time home buyers 'stimulus package' works.
The tax credit for purchase of a new home after April 1, 2008 & before it expires in 2009, will be a maximum of $7500 if the income thresholds are met, etc. For taxpayer(s) which qualify through all the requirement hoops, this is how it would work for them:
The $7500 will be PAID to the taxpayer via the April 15th tax return. If the return shows a refund (of let’s say $1200), then the IRS will send a check for the $1200 PLUS the $7500 stimulus money (or a total of $8,700). If, however, the tax return calculation shows that the taxpayer OWES (let's say $300), then the IRS will send a check for $7,200 ($7500 less the $300 owed).
Basically, the stimulus money is added to the normal tax return.
Now then, the big surprise to most folks:
This is really not a ‘gift’ but rather an interest free loan which must be repaid over 15 years ($500/year) beginning with the 2010 tax return which is filed on April 15, 2011. If the house is sold before the 15 years is up, then whatever balance is left owing on the stimulus money will be immediately due. If the house is held during the entire 15 years, then only $500/yr is due with each tax return.
For any of your employees which qualify for this program, it would be a good idea if they kicked in an extra $10/week on their federal withholding beginning in 2010 to fund the re-payment. I hope all of the participants in the stimulus plan understand the debt due back to the government and, should they sell early, prepare to make full repayment immediately.
Nothing is free to the public. Maybe if we were banks or brokerages we could get Paulson to subsidize our losses. In that respect, something WOULD be free. So, if we believe in the afterlife, we need to come back as unsuccessful bankers.
Okay, here goes.. not sure what a 33.93 net loss for the five trading days means....
Close on 12/31 for the Dow: 8776.39
Close today (5th trading day) for Dow: 8742.46 (net change: 33.93 points)
But... if you take the close on the first trading day (up 292.23 pts) at 9034.69, then todays close is 292.23 pts lower which indicates a downward trend.
So, do they measure a strick point value from the 31st of Dec or do they measure the trend at the end of the 5 days?
I'm confused but terribly curious!
The close on 12/31/2007 was 13264.82; the close on the 5th trading day of January in 2008 was 12589.07 (a clear loss of 675.75 points). Hmmmmmmmm.
Has anyone heard from Mike (Dimension) ? He hasn't posted since after Thanksgiving...
I was looking forward to his 5 predictions.
I hope he's okay... this is just really unusual...
If half of their 2008 production of 200MW is in warehouses, then how could they possibly produce an additional 350MW in 2009 without solid contracts on their books? Won't that cause severe price erosion?
I like your gold price. I like it v-e-r-y much!
Eric:
Today, my son locked into 4.6% 30-yr fixed. We're almost there!
Not that I'm after that 'Circuit City' share, but I dooooooo love a mystery!
Here's my predictions:
Corporations will face a severe pension/profit sharing 'underfunding crisis' which will adversely affect the markets and the individual corporations.
We will retest the November '08 lows in Quarter 1 of this year.
Steel will rebound to a healthier level this year (to watch: Nucor & AK Steel)
Water plays will be profitable (Potable, infrastructure, etc) for 2009 globally possibly by 10%-20%. This should be reflected by PHO.
TARP targeted financials will rise in share price this year. The ETF's for upside momentum in financials should close the year up 15%+.
I'm not sure what your investment goal is, but take a good look at where URE stands in this line-up:
http://moneycentral.msn.com/investor/partsub/funds/etfperformancetracker.aspx?fam=all&cat=Specialty+-+Real+Estate&s=&o=&tab=&show=all
What is your investment goal in this area?
Yeah, and while they are focused on 'herding', look how they are getting ripped off & don't even know it:
~~~~~~~~~~~~~~~~~~~
From Matt Insley, Associate Editor @ Resource Trader, Jan 5:
"Sometimes, we get inflation that you don’t see. It just sneaks up on you when you aren’t looking and just trying to start your day with the usual bowl of oat wheat sugar flakes cereal and, “Hey, either my hands have grown larger or this box is thinner than just a few weeks ago!”
This downsizing of packages is one way for food manufacturers to avoid raising prices. At first, it was to offset higher fuel and commodity prices, but now it has turned into profit growth -- with 10 less potato/potatoe chips in my bag.
The indented bottom of a Skippy peanut butter jar got more indented, turning an 18-ounce jar into a 16.3-ounce one. Ice cream containers shrank by one-quarter of a quart. And for breakfast, a jug of Tropicana orange juice got 7 ounces lighter, while that box of Froot Loops lost more than 2 ounces.
According to recent analysis by Nielsen Co., about 30% of all packaged goods have lost content over the past year. This at a time when U.S. grocery bills are rising -- up 7.5% in October versus a year ago -- at the fastest rate in 18 years. "
~~~~~~~~~~~~~~~~~~~~~~~
I think I'll go "herd"... maybe this will all go away