August 03, 2007

The end of the Great Housing and Debt Bubble is now here - Bear Stearns CFO: "Bond turmoil worse than Internet bubble"

Analysts are shocked

Wall Street is shocked

Larry Kudlow is shocked

Bob Toll and Angelo Mozilo are shocked

Realtors, appraisers, mortgage brokers, homebuilder and lenders are shocked.

And HP'ers knew all along.


The Great Unwinding is here.

Are you ready?

Bond market turmoil sending investors fleeing from risk may be a worse predicament than the 1980s stock market fall and Internet bubble burst, Bear Stearns Chief Financial Officer Sam Molinaro said on Friday.

"These times are pretty significant in the fixed income market," Molinaro said on a conference call with analysts. "It's as been as bad as I've seen it in 22 years. The fixed income market environment we've seen in the last eight weeks has been pretty extreme."

"So, yes, we would make that comparison" to market events that also include the debt crisis of the late 1990s, he said.

31 comments:

keith said...

U.S. Housing Is Among `Biggest Bubbles,' Rogers Says

Everyone's going HP now...

http://tinyurl.com/33d43c

Aug. 3 (Bloomberg) -- The U.S. subprime-market rout that wiped out $2.1 trillion from global share values last week has ``got a long way to go,'' said Jim Rogers, who predicted the start of the commodities rally in 1999.

This week's rebound in equity markets hasn't persuaded Rogers, 64, to pull out of bets that U.S. investment banks and homebuilders are heading for further declines.

``This was one of the biggest bubbles we've ever had in credit,'' Rogers, chairman of New York-based Beeland Interests Inc., said in an interview from Hong Kong. ``I have been and am still short the investment bankers in America. I'm also short homebuilders.''

Anonymous said...

I made $18,000 this week trading equities. I have a feeling next week will be more of the same, up 1%, down 2%, up 3%, down 2%.

I love the smell of volatility in the morning.

Now if y'all will excuse me it's Corona time. Have a good weekend everyone, God knows I will.

Anonymous said...

Jim Rogers is the guy who used to be on MASH. BJ I believe. You are taking advice from a guy who played BJ on Mash.

OK, next topic please.

ZZwcck said...

I'm guessing things will be all peachy keen come Monday morning. I can already hear the morning newscast, "People are over reacting to the subprime/alt-A mess, and there's no limit to the amount of money for the corporate deals -- just a misunderstanding on what dollar's value, that's all.

In other related news, if you run down to your bank this week you can trade in your old tired dollars for these freshly printed blue ones. Minimum note is 100 greenies for 1 blue sovereign accepted in both Mexico and Canada."

Anonymous said...

Bubbles are for bathtubs.

Which is good because it looks like a lot of people are taking a bath.

;-)

rcochran said...

One thing that happened today that hasn't happened for a while...the dollar fell as stocks fell.

Usually the dollar strengthens when stocks fall and stocks strengthen as the dollar falls.

US stocks are priced in US dollars, so assuming a company is doing the same, its stock should rise as the dollar falls. Pretty intuitive.

But when stocks fall against a currency that itself is falling, it means the stock crash is worse than it appears.

Have a nice weekend all you punters.

Anonymous said...

I welcome a Euro type currency between US/Can/Mex. The 3 countries trade close to $1 trillion with each other every year. A common currency makes a lot of sense and it will happen eventually.

Anonymous said...

Wow, Dow fell through major technical resistance without even blinking. I guess we won't hear from the DOPE troll today. Monday should be interesting.

Anonymous said...

Greg Swann and 1,400,000 realtors are shocked too

Trevor Cordes said...

rochran, good point. And, it's the first time on a 2% down day that gold went up (1%+). Dollar got slaughtered. It's the bonds, the yields are tanking expecting a cut and recession. Lower yields plus tanking dollar equals bad news for Japan and China $ reserves' value. IMO the bond market still is not pricing in the insane inflation here and to come. If only everyone would follow shadowstats, not the govt CPI lie.

Interesting to watch what Asia does to $ & gold on Sunday night. That will set the stage for the week.

Ron said...

Back to back weekends of spinning everything will be ok. I can't wait to see what is coming, and I am prepared.

Anonymous said...

>>>Jim Rogers is the guy who used to be on MASH. BJ I believe. You are taking advice from a guy who played BJ on Mash.

OK, next topic please<<<



I think that was Wayne Rogers...

Anonymous said...

In 2005-2007, Bear Stearns was recognized as the "Most Admired" securities firm in Fortune’s "America's Most Admired Companies" survey, and second overall in the security firm section. The annual survey is a prestigious ranking of employee talent, quality of management and business innovation. This marks the second time in the past three years that Bear Stearns has achieved this top distinction.

Anonymous said...

On June 22, 2007, Bear Stearns pledged a collateralized loan of up to $3.2 billion to "bail out" one of its funds, the Bear Stearns High-Grade Structured Credit Fund, while negotiating with other banks to loan money against collateral to another fund, the Bear Stearns High-Grade Structured Credit Enhanced Leveraged Fund.[1] The funds were invested in thinly traded collateralized debt obligations found to be worth less than their mark-to-model value. Merrill Lynch seized $850 million worth of the underlying collateral but managed to auction only $100 million of them. The incident has sparked concern of contagion as Bear Stearns may be forced to liquidate its CDOs, prompting a mark-down of similar assets in other portfolios.[2][3] Richard A. Marin, a senior executive at Bear Stearns Asset Management responsible for the two hedge funds, was replaced on June 29 [4] by Jeffrey B. Lane, a former Vice Chairman of rival investment bank, Lehman Brothers.

During the week of July 16, 2007, Bear Stearns disclosed that the two subprime hedge funds had lost nearly all of their value amid a rapid decline in the market for subprime mortgages.

On July 23, 2007, it was announced that a major class-action law firm, Bernstein, Litowitz, Berger & Grossman, is weighing whether to file a lawsuit against Bear Stearns over massive losses in two subprime hedge funds, according to people close to the matter. It would be the first such lawsuit brought over the collapse of the funds, though many more are expected.

Anonymous said...

and it was Trapper John not the Beej

Anonymous said...

DOPE... DOPE??? DOOOOOPPEEEE?????

Would you GET OVER HERE and start spouting some of your ignorance again!!

We are really REALLY in need of some comic relief right now!

Only YOU can help us out here cuz your sooooo beyond dumb it's HYSTERICAL!!

(oh... and, could you use more than 1 sentence this time??)

OC Mike said...

You guys have it all wrong.

Jim Rogers is that dude from the future who tools around with that little robot - Twiki, I believe.

Financial advice from the future sounds good to me.

Anonymous said...

Here comment from
AP
Immigrants Lift U.S. Housing Market
Monday July 30, 4:16 pm ET

By Mark Jewell, AP Business Writer

AP Centerpiece: Immigrants' Homebuying Dreams Lift Slumping Market, Prospects for Rebound

Listen to this person. Myself i only know my country i have no place to run back to. how many of these defaulters will run back to their country.



"Once you take the jump, you find ways to make it work," said Ortiz, 31, a supervisor at a dental insurance provider and a naturalized citizen. "But it's always in the back of my mind that if I don't make it, I am going to have to pack up and go back to Panama. You kind of feel like you have to strive for everything you do."

Anonymous said...

I made $18,000 this week trading equities. I have a feeling next week will be more of the same, up 1%, down 2%, up 3%, down 2%.

----------------------------------

I haven't seen it (volatility) this good since the internet bubble.

FlyingMonkeyWarrior said...

I was more shocked in October 2005 when I could not find ANY MSM news about the bubble, well, except here of course.
Turned me into a blogger, bubble blogger.
(-:

Bring it on.

SPECTRE of Deflation said...

It's worse than the Internet Bubble because unlike the Internet Bubble, they are feeling real pain while they get their asses handed to them. How's it feel boys and girls? Now you can wallow with the common sheeple.

And Cramer is still a moron. Cramer...dude...WTF?

Anonymous said...

Anonymous said...
I welcome a Euro type currency between US/Can/Mex. The 3 countries trade close to $1 trillion with each other every year. A common currency makes a lot of sense and it will happen eventually.

August 03, 2007 9:59 PM

Yeah, this is a great idea if you like the thought of giving up your constitution.

Anonymous said...

Jim Rogers is the guy who used to be on MASH. BJ I believe. You are taking advice from a guy who played BJ on Mash.


I don't care if Jim rogers played Bozo the Clown. If he says 2 + 2 = 4 then he is right. In this case, he is also correct and anyone with a brain wouldn't need his advice. Who needs the Fed when you can print your own money by shorting the lenders, homebuilders and ibanks.

Anonymous said...

jimmy rogers is one of the best global macro investors of all time - he was one of two brains behind the quantum fund which compounded at 30%+ per year for decades - his partner? george soros.

Tobby said...

Yeah, Wayne Rodgers played Trapper John on the old MASH. He was a frequent guest on the FOX noise channel. Jim Rogers is the guy who road has motorcycle around the world, made tons managing money, taught at Columbia and now moved his family to Hong Kong after SELLING all his real estate and dumping dollars. He called the run up in commodities in 1999.

PS Homebuilders AND appraisers have known about the bubble for quite a while. What are you gonna do. You can't fight the crowd.

Anonymous said...

My long positions are taking a beating (oil and mining and minerals) but my shorts on mortgage brokers are paying off well, more than offsetting the losses. I expect the oil and mining to recover quickly because these things are competed for by everyone around the world and demand is greater than supply. The trash that is purely discretionary will be taken out and shot with the mortgages. I think the oil companies like Exxon are keeping their crack spread low (profit on gasoline) and reporting slightly down profits because they know if they really charged the U.S. consumer based on the price of crude Congress would just take over and wipe out their profits. Foreign oil companies don't have this problem.

Shorting the housing crash is like shooting fish in a bucket.

Just remember our economy has been run mostly on credit. Each year you need more and more credit to pay off the debt from the year before. This just ended. All the forces that made the last 4 years so good will now act in reverse to make it real bad.


Easy credit = House prices (value) goes up
Difficult credit = House prices go down.
Good Press = People are overly optimistic
Bad Press = People are overly pessimistic

We're toast. Let's just hope you have a place to hunker down for the next 10 years until we recover. You did put away some money or investments during the boom time didn't you?

Anonymous said...

Even the good stuff is crashing possibly because leveraged positions need to be covered and good assets are being sold to do that.

Once that starts, people think the good stocks are also in trouble and sell first, ask questions later.

Anonymous said...

Anonymous said...

Anonymous said...
I welcome a Euro type currency between US/Can/Mex. The 3 countries trade close to $1 trillion with each other every year. A common currency makes a lot of sense and it will happen eventually.

August 03, 2007 9:59 PM

Yeah, this is a great idea if you like the thought of giving up your constitution.

August 04, 2007 3:01 AM

==================================

Get the tinfoil hat off Amigo.

Anonymous said...

Is seattle/swellview still special

Anonymous said...

too bad... that Kirsten was quite the babe

Anonymous said...

Looks like Seattle's not special anymore, Anon.... Last time I checked, it's still in the US....
Maybe we can get Canada to agre to t