April 27, 2007

"All the world's a bubble - The bursting of this bubble will be across all countries and all assets"

Remember, after bubbles pop, cash is king. So sell in May and go away? Or try to ride this crazy bubble 'til it's eventual and necessary end?


While euphoria sweeps stock markets here and worldwide, there are at least a few voices of dissent.

One, unsurprisingly, is legendary value investor Jeremy Grantham -- the man Dick Cheney, plus a lot of other rich people, trusts with his money. Grantham, chairman of Boston firm Grantham Mayo Van Otterloo, has been a voice of caution for years. But he has upped his concerns in his latest letter to shareholders.

Grantham says we are now seeing the first worldwide bubble in history covering all asset classes.

Everything is in bubble territory, he says.

Everything. 'The bursting of this bubble will be across all countries and all assets.'

"From Indian antiquities to modern Chinese art," he wrote in a letter to clients this week following a six-week world tour, "from land in Panama to Mayfair; from forestry, infrastructure and the junkiest bonds to mundane blue chips; it's bubble time!"

"Everyone, everywhere is reinforcing one another," he wrote. "Wherever you travel you will hear it confirmed that 'they don't make any more land,' and that 'with these growth rates and low interest rates, equity markets must keep rising,' and 'private equity will continue to drive the markets.' "

"The bursting of this bubble will be across all countries and all assets, with the probable exception of high-grade bonds," Grantham warned. "Since no similar global event has occurred before, the stresses to the system are likely to be unexpected. All of this is likely to depress confidence and lower economic activity."

41 comments:

Anonymous said...

Screw cash...buy pigs. They eat all your scraps and even when depression hits, everyone still likes tasty bacon.

Anonymous said...

I put my money in postal stamps, those "forever" stamps - now that is wise! You should too.

FlyingMonkeyWarrior said...

Keifie,

Ah. You have been saying this for a year and a half, and DickVater's money guy is just figuring it out? Or is just now going public with it?
HP is way ahead of the train yet again.

Anonymous said...

All the worlds a stage...be on it!

keith said...

Everything will deflate. Cash will be king. NOT just US$ - all cash as people sell all assets to raise cash in a derisking frenzy.

The only question is when. Markets can stay irrational for far longer than you think. We're in that irrational stage still in most markets. The US housing crash really is the first post-bubble market of this last cycle

Anonymous said...

Wait - does that mean GOLD is a bubble too - but what about all those soon Gold will be at $10,000 posters...

Marky Mark

Anonymous said...

"Since no similar global event has occurred before, the stresses to the system are likely to be unexpected"


is that a nice way to say......it will be worse than the last great depression?.....

Anonymous said...

its called irrational exhuburance....isn't it?

Anonymous said...

All the worlds a stage...be on it!

yes but the trouble is, that some of the actors are getting......union wages......while the rest of us are getting scab wages....

Anonymous said...

Cash will be king....

well what cash are you talking about?

the dollar? i think not. it won't be worth a continental....

Anonymous said...

Cash will be king, but certain non-USD currencies will do better than the poor, mutilated greenback - thanks to Greenspend and Berhackie. I'm thinking CND, EUR, and of course CHF. GBP, AUD, and NZD are all issued by countries that have real estate bubbles and current account problems. CND is backed by energy, EUR is controlled by the inflation-fearing Germans, and Switzerland is still a great place for drug lords, dictators, and other unsavories to stash their money in hard times.

Anonymous said...

I don’t know if anyone has heard of Ted Lui, and what he’s proposing, but I thought I’d post what I found on another board.

“TED LUI (CA assemblyman) and others on the California banking and finance committee passed a proposal Monday to use money from the Affordable Housing Bond to bail out homeowners who were “victims” of “predatory” financing and can’t make their mortgage payments. CALL Ted Lui’s office, talk to Tiffany or Mark, 916-319-2053, and call every assemblyman on the appropriations committee (that’s where it goes to a vote next), and call your local state assemblyman, tell them you don’t want your hard-earned tax dollars going to bail out buyers who overpaid and didn’t read their loan documents, tell them the affordable housing bond money was to be used for affordable housing not for bailouts, call or don’t complain when it happens!”

Here’s a response that one poster received after calling Mark…

“I gave Mark every completely rational argument I could give, not screaming or yelling, just speaking in a controlled, professional voice, against this bailout idea…all he could counter was “that’s your opinion”, “I’m sorry you feel that way”, “we’ll just have to agree to disagree so there’s no point discussing this”, and he just kept going on and on about how many people were “victims” of “predatory” lending and that was what this was trying to correct. No explanation as to how such lending was predatory, why the ADULTS who signed the loan documents were not responsible for their actions, why it is my problem as a taxpayer, nor why we should reward those alleged predators by making payments that didn’t pencil for the borrowers to begin with. I hope every one on this board calls him and every other assemblyman you have time to harrass, I mean contact.”

Sounds like a prick, but I’m going to call him tomorrow. Might not help, but it certainly won’t hurt to give this idiot a call.

borkafatty said...

I am seriously considering growing Marijuana, when this whole thing comes tumbling down, there are some serious players out there that are going to need a quick fix.

Thanks Ben we love ya Babe.

http://www.safehaven.com/images/nystrom/7437_b.jpg

Anonymous said...

Homebuilders May Break Loan Covenants, Moody's Says (Update1)

By Mark Pittman

April 26 (Bloomberg) -- U.S. homebuilders are in jeopardy of violating their lending agreements in coming months because of a drop in sales, according to Moody's Investors Service.

More than half, or 11, of the 21 builders that Moody's rates failed to generate more cash than they spent in 2006, analyst Joseph Snider in New York said in a report today. Homebuilders often have to promise banks that they will have twice as much operating revenue as interest expenses over a given time or the bank can demand immediate repayment of a loan, Snider said.

The homebuilders' situation is especially dire because cash flows usually turn positive during a slump as they cut back on starts and sell existing inventory, according to the analyst. The housing market is so weak that homebuilders haven't been able to cut their inventories, leading many to ask their bankers for so- called covenant relief, Snider said in an interview. Ratings may also be in jeopardy, he said.

``The next year or so for them is going to be pretty grim,'' Snider said. Some of the requests being asked of lenders are to relax rules that govern the amount of cash flow they must have in relation to interest expense.

The Commerce Department yesterday said new homes sales totaled 858,000 in March. Sales were expected to be 890,000, according to the median of 71 projections in a Bloomberg News survey of economists. The number of homes for sale in February reached 8.1 months of inventory, the highest in 16 years.

Shrinking Market

Bloomfield Hills, Michigan-based Pulte Homes Inc., Atlanta- based Beazer Homes USA Inc. and Calabasas, California-based Ryland Group Inc. this week reported quarterly losses as the deteriorating housing market forced them to write down the value of property and abandon land purchases.

Moody's figures the housing market has been shrinking for the past year and a half and the ratings company has taken 16 negative rating actions on homebuilders since mid-2006.

``More will undoubtedly follow,'' Snider said in the report.

The outlook for Pulte's credit rating was lowered to ``negative'' from ``stable'' today. The move reflected Pulte's weak operating performance, its inability to generate positive cash flows and the expectation that compliance with its current interest coverage covenant may become problematic in the latter part of 2007, Moody's said. Its Baa3 rating, the lowest level of investment grade, wasn't changed.

Returns

Pulte was one of three investment-grade companies generating negative cash flow for the previous 12 months at the end of the year, Snider said. The other two are Dallas-based Centex Corp. and Toll Brothers Inc. in Horsham, Pennsylvania.

Speculative-grade companies losing cash at the end of 2006 were: Red Bank, New Jersey-based Hovnanian Enterprises Inc.; Standard Pacific Corp. in Irvine, California; Technical Olympic USA Inc. of Hollywood, Florida; M/I Homes Inc. in Columbus, Ohio; WCI Communities Inc. in Bonita Springs, Florida; Reston, Virginia-based Stanley-Martin Communities LLC; William Lyon Homes Inc. in Newport Beach, California; and Meritage Homes Corp. of Scottsdale, Arizona.

Debt sold by junk-rated homebuilders returned about 1.46 percent this year, compared with a 3.95 percent for high-yield, high-risk bonds on average, according to Merrill Lynch & Co. index data, and a 13.7 percent drop for the Standard & Poor's 500 Homebuilders Index of share prices, which includes Fort Worth, Texas-based DR Horton Inc., Pulte and Centex.

Meritage

Meritage Chief Executive Officer Steven Hilton said in a statement yesterday that ``we are encouraged by some early signs of stabilization.'' While Meritage reported an 81 percent drop in profit in the first quarter amid weak demand, Meritage forecast 2007 profit that exceeded analysts' estimates and said its cancellation rate improved.

The S&P 500 Homebuilders Index rose as much as 4 percent, the biggest gain since January, following the comments.

Housing Starts Drop

Houses started by U.S. homebuilders will fall to a 10-year low in 2007, according to the National Association of Home Builders, which released the forecast at a housing conference they sponsored today in Washington. Single-family housing starts will decline to 1.16 million this year, the lowest since 1.13 million in 1997.

``The failure of a strong spring selling season to materialize, the unraveling of the subprime mortgage market, and the weakening of the alternative-A, or Alt-A, market will also carry a significant toll,'' Snider said in his report.

Alt A mortgages represent loans that are considered a credit level above subprime, and are made to people with generally good credit histories who opt for atypical underwriting or loan terms.

Housing is unlikely to show any signs of stabilization until 2008 at the earliest, Snider said, ``given the oversupply of homes for sale, their diminished affordability, declining prices, excess land inventory, and weak consumer sentiment.''

To contact the reporter on this story: Mark Pittman in New York at mpittman@bloomberg.net .

Mammoth said...

So, if all the bubbles burst at once, what will still have value?

Keith, are you SURE it's gonna be cash?

Got seeds?

Kali ExPat said...

Here's a sign of the Times, or should I say the NY Daily News...

Page after page of RE propaganda advertising McMansions from Florida to NH, spouting the same ol' ponzi tactics "Buy now or forever be priced out!", "Cheaper than renting!" and the infamous "They're not making anymore land!!!".

Of course there was a couple of pages of Mortgage hucksters trying to fraudulently induce whatever brain-dead sheeple are left to jump into ARMs, no doc, no interest loans while they still have rope left to hang them with!

LOL

Then 6+ pages of FBs desperately trying to unload their fraudulent investments - The underlying fear was palpable, poor FBs...

Of course the real punch line was the 2/3 of a page in the help wanted section ;-)

I know the Daily Snooze is nuthin' but a tabloid, but sometimes they report news accidently...

P.S. Commodities and precious metals on this leg up in the inflationary cycle, until that blows-up into the deflationary cycle to to end them all!

(Dastardly Dick Cheney laughs in the background...MUAHAHAHA!!!)

Anonymous said...

americans must wake up and smell the american dream is propaganda..... the purchase of home and white picket fence is so unreal...

The Owners of the Country
http://www.youtube.com/watch?v=9dY4WlxO6i0

Wake the F Up! (Manufacturing Consent in America)
http://www.youtube.com/watch?v=Wphncn58kdU

Anonymous said...

The problem with this whole idea is that you have enormous amounts of fiat currency floating around, and limited quantities of "things", so for the theory to come to fruition, it requires that the amount fiat money decreases while the amount of things increases.

How will the number of dollars be reduced as the amount of, say, gold, is increased?

Keith sez:
Everything will deflate. Cash will be king. NOT just US$ - all cash as people sell all assets to raise cash in a derisking frenzy.

For things to deflate, you have to have markets that will support the enormous amount of selling that would be required. For every seller, there must be a buyer. If no one is buying, no one can sell.

I just don't buy this idea that everyone will be unloading land, precious metals, base metals, grains, so that we will have this universe of wealth where people just hold fiat money.

Anonymous said...

(Dastardly Dick Cheney laughs in the background...MUAHAHAHA!!!)
+++++++
Anyone out there write screenplays for Hollywood?

Here's an idea for a movie -- one which I would find 100% plausible: a couple of investigative reporters get a tip that Dick Cheney has some Swiss bank accounts into which massive amounts of money are being deposited each month. The source is suspected to be Halliburton and other business interests who have benefitted mightily from our presence in Iraq.

Of course, if the reporters are able to prove this, they will have exposed the filthiest Washington scandal ever, because the war will be proven to have been started to personally enrich the Vice President of the USA.

As the investigation heats up, it turns out that W, Bush Sr, John McCain, and even some well known democrats are also getting money via these means for the same reason -- supporting the Iraq war.

Assassins are dispatched to kill the reporters. Chase scenes galore. Great stuff.

The sad part of the money deposit scenario: I fear it may actually be true.

Is this so far-fetched?

http://tinyurl.com/z58x

Anonymous said...

GOLD SILVER EAGLES AND CANADIAN OIL TRUSTS

Anonymous said...

"(Dastardly Dick Cheney laughs in the background...MUAHAHAHA!!!) "

Yeah, old Dick is probably saying:

Thanks dumb down American SUCKERS!!! HAHAHAHAH

Dick is laughing ALL THE WAY TO THE BANK thanks to the stupidity of our paid for Congress, and reps!

HAR HAR HAR!

a.creampuff said...

How about helping FBs with money from, say, a class action suit or gubmint fines against shady loan officers? That sounds like a win that would not cost those of us who are, for whatever reason, not involved.
A true bailout, I think we all agree should not be on the table. BTW, NPR did a piece on "desperate homeowners" this morning:

http://tinyurl.com/2jswgb

pjp said...

Malcolm X: You have to wake people up first; then you'll get action.

Miss Nadle: Wake them up to their exploitation?

Malcolm X: No, to their humanity, to their own worth.

Magon said...

Anonymous 7:08 PM-
The USD is backed by something that trumps all the things you mentioned: The Armed Forces of the United States of America and the willingness, even eagerness of U.S. leaders to use them.

devestment said...

I want to buy but know the end is neigh. This is a hard time as there is allot of money floating around out there and my business is still brisk. I have gotten in trouble in the past by basing future debit on past income. I now am at the point where I suffer from wannabe buyers’ remorse as things come onto the market that I want. I debate myself on weather to buy the unique property now or roll the dice and see what happens. The bottom line for me is always the opportunity cost vs. my quality of life. If the property makes my life better at an affordable price then it is a good move. If the property lessens the quality of my life through debit service and taxes then it is not.

Anonymous said...

Cheneys Betting on Bad News?

By Kiplinger's Personal Finance Magazine

http://tinyurl.com/rwla4

Vice President Dick Cheney's financial advisers are apparently betting on a rise in inflation and interest rates and on a decline in the value of the dollar against foreign currencies. That's the conclusion we draw after scouring the financial disclosure form released by Cheney recently.

As of the end of last year, Cheney and his wife, Lynne, held between $10 million and $25 million in Vanguard Short-Term Tax-Exempt fund (VWSTX, news, msgs) (it's impossible to be more precise because the disclosure form lists holdings within ranges). The fund's holdings of tax-free municipal bonds mature, on average, in a little more than a year -- meaning that the fund should hold up well if rates rise.

The Cheneys held another $1 million to $5 million in Vanguard Tax-Exempt Money Market fund (VMSXX, news, msgs), which is practically risk-free and could benefit from continued increases in short-term interest rates. And the couple had between $2 million and $10 million in Vanguard Inflation-Protected Securities fund (VIPSX, news, msgs). The principal and interest payments of inflation-protected bonds rise along with consumer prices, making them good inflation hedges.


Expecting dollar drop?
The Cheneys also had between $10 million and $25 million in American Century International Bond (BEGBX, news, msgs). The fund buys mainly high-quality foreign bonds (predominantly in Europe) and rarely hedges against possible increases in the value of the dollar. Indeed, its prospectus limits dollar exposure to 25% of assets and the fund currently has only 6% of assets in dollars, according to an American Century spokesman.

The Cheneys' total assets could be as high as $94.6 million, according to the disclosure form. The vice president's advisers say the vice president pays no attention to his investments. His lawyer, Terrence O'Donnell, says outside money managers supervise the investments. "He has nothing to do with it," O'Donnell says.

Anonymous said...

i wanted people to know that we don't need to pay taxes...united states has NO law for income tax....

watch video very interesting..
http://tinyurl.com/ymszrx

http://www.freedomtofascism.com/

Anonymous said...

Cash will be king. All other currencys will enjoy the same in there own lands. Everyone will dump what they can to raise cash. Your bills will still need to be paid in cash(dollars)with some exception. Then there will be a cash bubble. Add the dollars from other lands that will come back home. That is when inflation will take hold. The trick will be like always in your timing. The best thing to do is act now or soon. The rest of the people who are unaware won't be forever.Life is just like a ponci scheme in many aspects You have to beat the majority to the punch most of the time or you lose. Decide what YOU need and go on with life. You can only talk to a wall for so long before you give up.

Anonymous said...

Keith, what do you think about this comment?


Todays comm by Peter Schiff:

"As the Dow burst through the 13,000 milestone this week, few understood the hollowness of the achievement. Measured against the rising dollar-denominated prices of just about everything else on the planet, the Dow has actually lost value over the past seven years. Measured against the truest benchmark, the price of gold, the record high for the Dow was set back in January of 2000 when its price equaled approximately 43 ounces of gold. Today it is only worth about 19 ounces.

To better appreciate just how much of stock gains can be attributed to inflation, consider that the record high for the Dow in 1929 of approximately 380 also equated to 19 ounces of gold. So despite all of the hoopla and a thirty-fold increase in stock prices, the Dow has actually gained no real value during the past eighty years. The entire rise from 360 to 13,000 has been an illusion made possible by the magic of inflation. So much for the concept of stocks being a “can’t lose” long term investment -- unless you feel that eighty years is not quite a long enough time horizon!

Now that is not to imply that the Dow has not generated returns during those years: it has. However, those returns have been a function of dividends and not appreciation. But its not yields that Wall Street celebrates, its prices. By dazzling investors with higher prices, they distract their attention from the unpleasant reality that they are actually treading water. What difference does it make if you have more dollars if the dollars themselves have less purchasing power?

Despite its recent eclipse of 13,000 the Dow now buys 30% fewer euros than it did then back in 2000 when it was priced at approximately 11,500. It also buys 35% fewer gallons of milk, 40% fewer bushels of corn or wheat, 65% fewer ounces of silver, 70% fewer barrels of oil, 80% fewer pounds of copper, and 90% fewer pounds of uranium. Try figuring what the Dow will buy in terms of other necessities, such as housing, insurance, college tuition or hospitalization. Any way you measure it, the Dow is worth far less today then it was in January of 2000.

Back in 1980 one Zimbabwe dollar was worth more than one U.S. dollar. Therefore a billionaire in Zimbabwe was also a billionaire in America. Today, almost everyone in Zimbabwe is a billionaire yet few of them can afford a pack of chewing gum. Do you think that anyone invested in the Zimbabwean stock market these past 30 years cares how many record highs that market has made?

Many might feel that a comparison of the U.S. to Zimbabwe is ridiculous. However, fundamentally there is no real difference between a Zimbabwean dollar and an American dollar. They are both simply pieces of paper, the value of which depends on the resolve of politicians not to print too many of them. During the difficult economic times that lie ahead, the pressure on the Fed to run its printing presses full throttle will be immense.

Think back to the German experience with hyper-inflation during the Weimar Republic. At the time of its currency meltdown, Germany was a major economic power (even after the devastation of the First World War). Yet that status did not prevent its currency from becoming worthless. The impetus for Germany’s hyper-inflation was the fact that its industrial base had been badly damaged during the war, yet under the terms of Treaty of Versailles it was obligated to pay enormous reparations to the Allies. Lacking the ability to export enough goods to repay its debts, it resorted to a printing press instead. America is now in a similar predicament. Although our industry was not destroyed by bombs, it’s gone just the same. While we might not be bound by a treaty to pay reparations, the trillions of dollars of American IOU’s now owned by foreigners will be just as burdensome an obligation. It is hard to image we can “repay” these debts without civil unrest, massive inflation, or both.

The point to remember is that when it comes to records, it is real purchasing power, not nominal value, that counts. Measured by its purchasing power, the Dow has clearly lost value over the past seven years. Those who have remained invested in Dow stocks during that time period are clearly poorer as a result. Those who continue doing so will likely lose even more wealth in the years ahead, regardless of how many more nominal record highs the Dow sets."

Paul E. Math said...

Regarding bailouts, why is the legislative branch stepping into the role that our justice system was designed to take? If a lender is fraudulent then a court of law is the best body to make that determination. If anything, perhaps we can create like a board with some judicial powers to expedite the process of determining if fraud was present in this special environment.

The point is that the borrower needs to prove fraud by customary evidenciary rules and restition, where appropriate, is paid by the lender, NOT the taxpayer.

Anonymous said...

And human life will become the cheapest commodity of all.

Anonymous said...

"The USD is backed by something that trumps all the things you mentioned: The Armed Forces of the United States of America and the willingness, even eagerness of U.S. leaders to use them."

That would be a great point if Dear Leader President Bush hadn't gotten our fine troops bogged down in a land war in Asia. As the world currently stands, not so much.

Aside from that, what do you think would happen to the American financial system if China dumped its full hoard of UST paper at once?

vegas crash watcher said...

Jeremy Grantham seems to be predicting deflation very soon. Gold is in a bubble and will be below $400 in a year or three. Very few people actually have liquid US dollars without also having debt so that is what will have the most value.

Anonymous said...

"i wanted people to know that we don't need to pay taxes...united states has NO law for income tax...."

That's quite possibly the stupidest idea floating around the intertubes. If you really think that this supposed lack of law would exist for more than a day after a lawyer successfully exploited it I've got a $2M house in Youngstown, OH that is guaranteed to appreciate 100% in the next year to sell you.

TaZ said...

i wanted people to know that we don't need to pay taxes...united states has NO law for income tax....

Tell that to the nice G-Man with the gun in your face...

Gotta love when these anons come in here with their cultish fantasies about rolling the clock back to 1913.

Here's a tip for those that wanna get a zip code in reality - Power is always right. We give them the power through our consent, and that can stop tomorrow if enough sheeple wake-up and together say, *STOP*!!!

You see, as much as they want to amend the USCON the gov't. into ultimate authority they can't amend the founding document of the USA, the Declaration of Independence, which states the role of gov't. clearly for all to see and be damned by:

WE hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the Pursuit of Happiness (i.e. Property)-- That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the CONSENT of the GOVERNED, that whenever any Form of Government becomes destructive of these Ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its Foundation on such Principles, and organizing its Powers in such Form, as to them shall seem most likely to effect their Safety and Happiness.

Good luck convincing the tyrannical GOPher/DemonRAT parties to return to sanity though ;-)

Anonymous said...

"The USD is backed by something that trumps all the things you mentioned: The Armed Forces of the United States of America and the willingness, even eagerness of U.S. leaders to use them."

That would be a great point if Dear Leader President Bush hadn't gotten our fine troops bogged down in a land war in Asia. As the world currently stands, not so much."

---- Fuck me.

I really don't know where to start addressing your ignorance. Well, firstly, Iraq ain't in Asia. Afghanistan is, but that isn't usually prefaced by 'bogged down in...' so you were cleary referring to Iraq.

Secondly, currency isn't augmented by military action.

In fact, it's usually devalued by military action. The Swiss wield an awesome halberd (big stick with pointy thing to you) which is lame compared to an Abrams M1 tank. But hey, they protect Il Pape. and have done so competently for about 400 years.

Strangely enough though, those pointy stick wielding, oddly dressed men represent one of the worlds most respected and solid currencies. And one which has withstood the test of time.

Lets be honest - the dollar of 1913 is now worth $.04 after a run of about 150 years where it danced around parity (ie it bought about the same amount of crap you'd expect a dollar to buy - though clearly the founding fathers were too stupid not to anticipate Japanese cars, iPods and flat screen TV's).

And even more oddly, a bunch of Armani suited Wall Street Warriors have as a tight, singular group of a few thousand, managed to loot the worlds most wealthy country. And convince the victims of that looting that it's all good.

Damn, if only the Vikings had better PR...

Mail guru

Anonymous said...

Hey wait what's all the doom and gloom everyone? Dmeocrats run things in DC now, all will be well.

Anonymous said...

"I really don't know where to start addressing your ignorance. Well, firstly, Iraq ain't in Asia. Afghanistan is, but that isn't usually prefaced by 'bogged down in..."

How stupid can one person be? This guy doesn't even know where Iraq is after 4 years of this stupid war.

From Wikipedia:

"The Republic of Iraq[1] (conventional short form: Iraq) (Arabic: العراق (help·info) transliteration: 'al-‘Irāq,Turkish: Irak, Kurdish: عيَراق), is a country in Southwest Asia spanning most of Mesopotamia as well as the northwestern end of the Zagros mountain range and the eastern part of the Syrian Desert."

Anonymous said...

Keep your house and a small portofolio of stocks as your illuiqid assets. The rest diversify in cash euros or yen and bullion gold and you will do just fine.
The yen carry trade is the main driver behind this worldwide bubble. Watch everyone scramble for hard cash when it pops. People have been told for years that stocks, real estate were the place to and they were...and they might be for some time as the everyhting inflates. Compare it to a train with final destination the Grand Canyon... Those who jumped in time will survive.

Guy Daley said...

Furniture Brands Cuts 330 jobs - http://www.chron.com/disp/story.mpl/ap/fn/4755938.html

Eh, 330 jobs, so what? 10 new McDonalds will replace those jobs easily, right!!! From the article, "Retail furniture sales have been hit hard by the ongoing slump in the housing market." That same scenario is being repeated from 100s of different companies and people employed and self-employed associated with the housing industry.

Sure its like changing course with an Extra large crude carrier, it takes time. It doesn't stop or turn on a dime.

One thing is for sure, expensive toys are going to become cheap. Want an RV, travel trailer, boat, ATV for cheap. Just check Craigslist. In fact, you want a sign of the times, watch how the listings on Craigslist has BALLOONED!!! Here's the key, things we depend on will inflate in price, like food and energy, things that are discretionary will become very cheap!

As ARMs adjust people will jettison there toys before they give back the house. But yeah, cash will be king. It will certainly buy a lot less in terms of necessaries but for toys and other junk it will buy a lot more.

Anonymous said...

Here's the next greatest thing! Forget about the real property, you can make a ton selling virtual property on weblo.

From CNN Money.com
http://tinyurl.com/2q6jnx
An (irrationally?) exuberant
land grab

"Weblo's pages represent states, cities, and buildings in the real world--and are in finite supply.
For example, there's a Weblo page for the Empire State Building (bought for $1 by city worker
Rick Bujold, who later flipped it for $250), a page for Seattle (bought for $2,000 by Seattle real
estate loan analyst Padraic Slattery), and a page for California (bought for $53,000 by lawyer
Michael Edelson). All told, Weblo has attracted 10,000 speculators so far.

...if Weblo has somehow managed to siphon off a bit of the irrational frenzy endemic to the realworld
real estate market, it just might have found a profitable niche."

GET IN NOW OR FOREVER BE PRICED OUT!!!