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Posted: Fri Oct 24, 2008 1:33 am
by GeoDaddy
Okay, let's take this apart piece by piece...

Let's start with the easiest proof that will prove simply naive and ignorant...

We'll be out of this in 6-12 months tops.

Too bad we have to wait a year for your prediction to be proved silly.

I see absolutely NOTHING out there that suggests there is ANY reason for the economy to turn around in the near future... we haven't even gone deep into the recession yet. We haven't begun to start liquidating all those non performing mortgages - can't keep ignoring the fact that people aren't even paying their mortgages on properties they feel they can't pay off - and, until that debt is settled or written off, there can be no resolution of how bad the losses are going to be.

The very idea that we have already gone thru the worst can ONLY ocme from a spoiled American who takes for granted that growth is just a given... the Japanese never really came out of their 1980s recession... there is NO reason that our real estate based recession will be far deeper and far worse.

Again - think unemployment at 18%

Interest Rates at 10% - IF you can get a loan.

And - when the govt starts printing money because they can't collect enuff tax revenue (even with their tax increases which won't bring in anywhere near what they assuume they will get because rich people can protect their money much quicker than the govt can confiscate it) and there won't be any more borrowing... inflation is gonna come back to 70s double digit because the Govt "has to" keep churning out social security and medicare checks.

We haven't even begun to experience how deep this is gonna cut!

Posted: Fri Oct 24, 2008 1:47 am
by GeoDaddy
US dollar is strengthening

The dollar is strenghtening simply because Europe's Euro is collapsing and the Industrialized world is using less and less oil.

Europe got away with a strengthening Euro because they had no military speading to speak of and they could concentrate on unionization of their currency. The problem is that much or Europe's marginal growth was done in the derivatives markets - trading captial for risk, a percentage here, a cut there - and govt spending based on the double taxation of petro... but Europe bought a LOT of that American Mortgage Debt (in the form of CMOs) and there is a strong case to be made that their exposure was even greater than that of the US investors. Why? Because the US Govt, by way of Fannie and Freddie GAURANTEED those CMOs - a concept that Europeans took for granted given their ability to tax their citizens at a whim. Once the European consortium of banks realized that the American voter could well renege on paying for that bad mortgage debt, they banks suddenly realized that they had something that they thought was worth a hunder thousand dollars... worth nothing.

The dollar is up and oil is down because the world is starting to realize that the gig is up! The US is going into a deep recession - years - and w/o the US market for goods and the US commmitment to free trade... we could well be facing the end of the global system of trade that has exsited since WWII and the world will slip back into the protectionism that existed in the 1930s.

All you have to do is use a little contrarian logic - if the low dollar and high cost of oil characterized a global economic EXPANSION over the last five years (2003 thru 2007) then whadda you think the opposite means?


Posted: Fri Oct 24, 2008 2:01 am
by GeoDaddy
The vast majority of subprime had nothing to do with liberals putting poor people in homes, it was joe six pack buying a bigger mcmansion than he could afford and speculators hoping to get rich quick by buying homes on little or nothnig down and flipping them 12 months later.

Wel,, I appreciate the partisan defense of who we should blame for thee subprime mortgage meltdown... but we don't even HAVE the data on who will be going belly up yet - they haven't started kicking people out of their houses for non-payment of their mortgages in any critical mass.

But the documentation of how ACORN demostrated in bank lobbies, followed bank officers home and sat in front of their houses, crowded out commitee hearings in congress (and got arrested) and demostrated when banks (that didn't set aside several millions for "redline" mortgages) tried get approval for expanded their business.

Now - here's a good deal of common sense analysis...

If "Joe Six Pack" bought a mansion that he couldn't afford - THAT IS NOT A PROBLEM! Why? LOCATION, LOCATION, LOCATION. That house - once Joe Six Pack is sent packing - is gonna sell for much higher market value... that the hundreds of thousands of loans made for two story row houses made in those redline districts where NOBODY will want to buy what should never have been made loanable in the 1st place! THAT is the core of the problem. A lot of this mortgage debt is in neighborhoods that has NO resale value at any price because the neighborhoods themsleves are... worthless.

The Media images of houses in nice suburban neighborhoods with "For Sale" are really misleading... if the suburb is anywhere close to the metropolitan center are has access to water and electircity at a relatively low cost... are going to be resold and will start rising in value once the market plays out.

What they need to be showing are the row houses in Allentown, PA!

Those houses are worthless and that money is gone!

It;s only a question of how much - what percentage - and we don't know that! yet!


Posted: Fri Oct 24, 2008 2:14 am
by GeoDaddy
The fannie/freddie portfolio is very high quality

Also, let's get this correct...

Fannie doesn't really HOLD a lot of that debt. Freddie "packaged" it as debbt instruments and SOLD it to Investment Houses, who, in turn, sold that to investors in REITs and CMOs.

The problem - if you bothered to read up on the paper trail - is that Deutsch Bank, for instance, tried to realize their assets for some part of their holdings, they went back to Freddie, who sent them back to Fannie, who pointed to the local bank in, say, North Carolina that originally made the loan - and is still managing the account - and Deutsch Bank demanded that the bank either collect on these non performing mortgages or evict the owners so that the houses could be re-sold.

The tenants (not really "ownders" since they stopped making payments several months ago), after talking with their lawyers, took these evictions to the local courts and judges refused execute the eviction notices...


Because the judge (not even the lawyer) stated that they don't believe that Deutsch Bank even "owns" the houses... they simply threw out the court cases because they did not believe the paper trail from the local bank to F&F that ended up in Deutsch Bank CMOs.

THAT is when the Mark-to-Market demand came around to expose this vast portfoloio of debt that no longer had a liquid asset. And that happend as 3rd Quarter Earnings were mandated - by SOX - to be reported and the debt was exposed as unredeemable by ordinary market and procedural means.

bwt - those court cases - and there are thousands of them - are still sitting the courts and thousands of people are still in those houses waiting for the Govt i.e. the US Tax Payer to bail them out - namely by re-wring the loan down to where they can afford it - and we get stuck with the losses.


Posted: Fri Oct 24, 2008 2:29 am
by GeoDaddy

You clearly have little or no understanding of what drives emerging markets

I understand something fundamental about the "emerging markets" - there has to be SOMETHING that is "emerging!"

Investors don't just throw money at something because they need to throw their money at something... there has to be SOMETHING that is WORTH investing IN!!!

Like Mortgages (that were guaranteed by the US Govt and Tax Payer to never really "lose value" because the Govt backed the institution that created these mortgages... as Greenspan accurately called "capitalized profits, socialized losses" THAT was worth investing in!

Or the Tech Boom - the Internet Boom where EVERYTHING was going to be done on the Internet and every company that bought a URL tag was guaranteed to make money as people would abandoned televison, radio and magazines... to flock to the Interenet. THAT was worth investing in!!!

Or any of a dozen fads that inspire people to lay down their cash, make a killing, then get the heck out when the lemmings start trying to play the same game (before the fad starts to fade...)


There is NOTHING on the horizion but DEBT DEBT and MORE DEBT - unsustainable, unfundable Western Govt porgrams with a declining tax base and little reason for China to keep buying up that debt.

It really is a global ponzi scheme that is coming to an end - there NEVER was enough capital and credit to create a Soviet Cradle to Grave Socialist Utopia - not in Europe and not here in the US.

The mortgage collapse was only the 1st domino to fall.

We have many other pillars of the "entitlement" system to fall away.

And until that - estimate 53 trillion of liablity (what it would cost to fund social security and medicare for JUST the baby boommers) - is rethunk!

The Investors are simply gonna hide their money in ANY country that will shelter them from the collapse of the Western attempt to out do the Soviets.


Posted: Fri Oct 24, 2008 1:01 pm
by coffeeguy
So I know today is going to be a market massacre, but sorry I cant buy into your doom and gloom scenario. I'm old enough to have lived throguh the recession in the early 80's, I got laid off from my first job 3 months out of school in the early nineties, I was in IT sales in the tech meltdown in 2000-2001.

Every time I saw the doomsayers crawl out how this was the end, that the US was gonig down the flusher, that the problems were insurmountable, and every time the US and the other western democracies bounced back stronger than ever lead by the US.

For all the debt, bad mortgages, and rising unemployment, you need to look on the bright side. First millions of Americans have and will continue to have well paying jobs. The US has one of the most productive workforces in the world. Americans are entrepreneurs and risk takers heads and tails above any other country. The country is a magnet for the best and brightest to come to worldwide. They have extremely smart patriots like Bernake and Paulson that will do everything they can to fix the problems. American companies have some of the smartest management are are the best run in the entire world.

I'm not American, but I've worked with Americans, gone to school there, sold to them and bought from them. That is why I am optimistic. Not saying the problems arent serious, but I personally see the light at the end of the tunnel. I hope I'm not proven wrong, but betting against the US has historically been nothing but a suckers bet.

Posted: Fri Oct 24, 2008 1:39 pm
by Vince
I'm with Coffeeguy on this one. if the US can come through WW2 as well as it did a little thing like a credit crucnh isnt going to hurt too bad. Remember in the 30s no one really understood economic cycles now, with the exception of geo we've got a good handle on the problems.

Re: Have we hit the BOTTOM at 8,000?

Posted: Sun Apr 12, 2015 6:51 am
by dBrother
GeoDaddy wrote:Talking to a lot of the fund managers today, they feel that we hit "bottom" at 8,000 today - the institutions started buying at the end of the day and we are settling in at 8,000 for the next several quarters...

I don't think so.

I think today's end of week rally was manufactured - like the way the market was jump started after the 1987 anomoly. Tthe Three Major Brokerages at the time, JP, Merrill, and Goldman Sach agreed to push their institutional clients to buys positions - back by Federa Govt funds that "guaranteed" against any down positions - this was a gimick intended to give investors a chance to review Paulson's Buy Bank Equity program and place their bets on Monday.

Will it work? I have NO idea. Too many variables.

But I think that the "bottom" of this market is at 6,000

so no one ever got back to this thread after the market bottomed out at 6500 a few months later??

geo wasn't that far off, in hindsight

Re: Have we hit the BOTTOM at 8,000?

Posted: Sun Apr 12, 2015 4:43 pm
by muthafunky
Most people who made predictions in this thread and around that time weren't far off either, don't forget this was a dire time for the world economy. I imagine this thread got overshadowed by the Dow Jones thread 6 months later where people like Doc, CS and others predicted things like the Dow will never go above 6k again just as the current massive bull market was taking off. The stupid things posted in that thread were gold (you were one of them).

Geo predicted hyperinflation and told us how he liquidated his stock portfolio at that time, so in general he's been way off. Predicting the Dow would drop 25% in the midst of the Great Recession wasn't exactly a stretch.

Vince probably had the best post on this thread, he talked about it being a good buying opportunity. S&P is up about 250% since then.

Re: Have we hit the BOTTOM at 8,000?

Posted: Mon Apr 13, 2015 4:44 pm
by dBrother
yep, most of that inflation stayed in things that don't really exist, physically.
They don't even print share certificates on paper here anymore.. just a holder identification number..

I mean there is no doubt that alot of 'money' has been created out of thin air in the intervening years, but very unexpected where it ended up parking itself.

no-one saw that coming, Did they??


Kudos to the people in charge of the economy... so far

Re: Have we hit the BOTTOM at 8,000?

Posted: Mon Apr 13, 2015 6:19 pm
by muthafunky
Companies exist and their earnings are real and not paid for by the government or QE. No doubt the US market is due for a correction after a huge bull run, but to imagine that the rise since its deepest depths during the Great Recession is imaginary is the height of stupidity. But then, we are talking about dbrother.

Re: Have we hit the BOTTOM at 8,000?

Posted: Tue Apr 14, 2015 2:26 am
by dBrother
food for thought
Meanwhile, the Fed is pushing up prices not reflected in the CPI. Through its zero-interest-rate policy and direct asset purchases via quantitative easing, the Fed has lowered the cost of capital and raised prices for stocks, bonds, and real estate. In doing so, it has argued that rising asset prices create a "wealth effect" and are thus a key goal of its monetary policy.

Over the past five years, the prices of these financial assets have risen dramatically. However, unlike past periods of bull asset markets, these increases have not been accompanied by robust economic growth. To the contrary, the last five years have seen the slowest non-recession economic growth since the Great Depression.

This Fed-driven dynamic explains the rich-get-richer economy we've seen since the alleged recovery of 2009 began. The wealth effect has allowed the elites to push up prices for high-end consumer goods such as luxury real estate, fine art, wine, and collectible cars. But that is cold comfort to rank-and-file Americans struggling to find work in an otherwise stagnant economy.

Broader consumer price inflation has been kept at bay because many of the newly printed dollars don't even hit our economy. Instead, foreign countries purchase them in an attempt to keep their own currencies from appreciating against the dollar. In the current environment, a weak currency is widely (and wrongly) seen as essential to economic growth. That's because a weak currency lowers the relative price of a particular country's manufactured goods on overseas markets. Nations hope those lower prices will lead to greater exports and more domestic jobs.

Although America's policies may not differ dramatically from what has been disastrously tried by Argentina, the dollar is for now protected by the international reserve status that it has enjoyed for almost 70 years. But that privilege has its limits. The dollar may be bigger and more globally integrated than any other paper currency, but in the end, its value may be just as ephemeral

Peter Schiff, who was right.. ... singlepage

Re: Have we hit the BOTTOM at 8,000?

Posted: Tue Apr 14, 2015 3:29 am
by muthafunky
I'm glad to see you have resorted to cut and pastes rather than trying to explain in your own words what is happening as that is what got you the reputation for being a Stew moron in the first place.

Re: Have we hit the BOTTOM at 8,000?

Posted: Tue Apr 14, 2015 3:49 am
by dBrother
Think you're good cos you run a third rate website don't you?

Re: Have we hit the BOTTOM at 8,000?

Posted: Tue Apr 14, 2015 4:01 am
by muthafunky
I think I know more about economics and the stock market than you, but then the same is true of a potted plant, so it's really nothing for me to feel good about.

Re: Have we hit the BOTTOM at 8,000?

Posted: Tue Apr 14, 2015 4:06 am
by dBrother
You can think what you like, so can the potted plant.

Doesn't mean you're right.

The fact that you think you are is just a symptom of arrogance..

Comes with the territory of being God of your own little virtual world here I suppose..

Re: Have we hit the BOTTOM at 8,000?

Posted: Tue Apr 14, 2015 4:08 am
by muthafunky
True, though I think it's blatantly obvious who is often wrong/ moronic about all things economic (hint: you, with potted plant a close second).

Re: Have we hit the BOTTOM at 8,000?

Posted: Tue Apr 14, 2015 6:25 pm
by Moethebartender
Fluffermunky wrote:I think I know more about economics and the stock market than you, but then the same is true of a potted plant, so it's really nothing for me to feel good about.

Fluffermunky wrote:True, though I think it's blatantly obvious who is often wrong/ moronic about all things economic (hint: you, with potted plant a close second).



I think this feud has gotten completely out of hand. This is just uncalled for.

What has the potted plant ever done to you? I think your comments here are an insult to potted plants everywhere. I dare you to provide a single link showing that Dbrother's awareness and familiarity with his surroundings is anywhere near that of the potted plant. I mean, really. What kind of potted plant are you even feuding with here? You could at least provide some specifics rather than painting all potted plants with a broad brush like this. Take for instance the common venus fly trap. I seriously doubt that even dbrother would try to contend that he and that plant would be on a level playing field if it came down to a battle of intellect. A dieffenbachia? Please. Dbrother couldn't even spell it. Hell, when it comes to financial matters, our little bogan here thinks that burying gold all about his property is a sound idea. I've never heard of a potted plant contemplating such an absurd notion. I think a sincere apology is in order.

Re: Have we hit the BOTTOM at 8,000?

Posted: Wed Apr 15, 2015 9:17 am
by dBrother
^^ the fluffermonkies personal fluffer hath spoken..

Re: Have we hit the BOTTOM at 8,000?

Posted: Thu Aug 06, 2015 11:12 pm
by Citizen Baba
Geo has a crystal ball.

Re: Have we hit the BOTTOM at 8,000?

Posted: Fri Aug 07, 2015 2:16 am
by muthafunky
I enjoyed the potted plant's posts on this thread.

Re: Have we hit the BOTTOM at 8,000?

Posted: Fri Aug 07, 2015 7:56 am
by dBrother
mein Gott

Re: Have we hit the BOTTOM at 8,000?

Posted: Fri Feb 17, 2017 12:49 am
by Lost Soul
Poor geo.

I'm sure he's buying stocks right now too.

Re: Have we hit the BOTTOM at 8,000?

Posted: Thu Jun 20, 2019 7:51 pm
by Stephen_Dedalus
Great thread.

Re: Have we hit the BOTTOM at 8,000?

Posted: Sat Jun 22, 2019 2:39 am
by بھائی اوتار لینا
Over AU$2000 an ounce for gold today..

Re: Have we hit the BOTTOM at 8,000?

Posted: Sat Jun 22, 2019 3:16 am
by muthafunky
Still a shit investment here