August 10, 2007

We knew what was going to happen. And now it's here. This liquidity crush is simply "revulsion" and "discredit". Housing panic is here.

It's panic folks, and it is here. Panic. In all your lives, you'll never see such a thing again. After the biggest financial bubble in the history of humanity, the biggest crash follows. It hath been foretold.

It's time to head to the cellar. Right on schedule, housing panic is now here.

Again, from the textbook:

Ultimately, the markets stop rising and people who have borrowed heavily find themselves overstretched. This is 'distress', which generates unexpected failures, followed by 'revulsion' or 'discredit'.

The final phase is a self-feeding panic, where the bubble bursts. People of wealth and credit scramble to unload whatever they have bought at greater and greater losses, and cash becomes king.


And just one of the headlines from reality today:

ECB injects €98bn but markets are gripped by panic

The European Central Bank released nearly €100bn (£68bn) in emergency funds into the banking system yesterday in an effort to kick-start the crippled credit markets, but its move only sparked panic selling on stock markets across the world.

The sudden cash injection was the largest since 12 September 2001, when the central bank released billions to stabilise the market after the terrorist attacks in New York.

The trigger for the €98bn package was a major overnight spike in inter-bank lending rates that if unremedied threatened to disrupt the normal functioning and stability of Europe's financial system.

As with the other market upheavals in the last month, the root cause was traced to America where the fallout from the meltdown of the market for risky, or sub-prime, loans continues to widen.

131 comments:

Anonymous said...

kieth, did you ever take an economics class.. . i did, at a top 20 business school, and you are spot on.

this is the biggest boom/bust since the Great Depression.

this is the 2nd Great Depression.

no one called one in 1929...

not until 1933 did people start to realize...

bingo.. You's Fu@ked !!!

Anonymous said...

Well, thar' she blows!!

Keith, I've been reading your forum from the sidelines for the past few months. Very informative and always interesting. I feel like I've just gotten a front row seat to an historic event.

Hats off!

buyerwillepb said...

The crash is now spreading worldwide, and what is the cause?

"the root cause was traced to America where the fallout from the meltdown of the market for risky, or sub-prime, loans"

And just where were most of the subprime loans originated? Yep, SAN DIEGO.

How do you say, "Thanks for nuthin' San Diego! You nimrods!"

In Spanish?
In French?
In German?
In Chinese?
In Japanese?
In Italian?
In Swedish?
...

Anonymous said...

http://tinyurl.com/25327j

Big liquidation triggers hedge-fund turmoil

Some compare upheaval to LTCM collapse; market-neutral funds are hit hard

SAN FRANCISCO (MarketWatch) -- The liquidation of a big hedge fund or investment-bank trading portfolio is wreaking havoc in some parts of the hedge-fund business, managers and investors said Thursday.
Black Mesa Capital, a hedge-fund firm that uses computer models to track down investment ideas, said that at least one large hedge fund or investment bank is liquidating "massive

Anonymous said...

Goes to show that Feds should not of reacted to 2000 stock crash and 911 by lowering the rates ,and they should not of held the rates low for this long .

Maybe the whole world went nuts after 911 .

When Katrina came in and put housing under water,it was a sign to take stock .2 years after Katrina everyone is now seeing that housing is under water and it was before Katrina hit.

foreclosureboy said...

There used to be an old kids video game called "Where on earth is Cramer, San Diego?" or something like that....

cramer should stop by a vacant san diego condo building and do a show from there for kicks! boo yah!

Anonymous said...

What comes after fear?

Anonymous said...

Repeat after me everyone:

"Mark to market."

"Mark to market."

"Mark to market."

For us bears and HP fans, today has been like financial porn, all day long.

SeattleMoose said...

HA HA HA HA HA HA HA....I LOVE IT!!!!

GREEDY FOOLS!!!

Even up here in slacker latte heaven, there is a rustling in the halls at work and the joyous glee from a year ago has turned to a desperate search for a silver lining in the daily bad news...all in vain.

Oh wait...MS is just about ready to report Vista/Zune sales figures....maybe, just maybe slacker latte heaven will be spared.....

Bend Dover said...

Here's a HOT stock tip:
Johnson & Johnson

They make KY Jelly and Vaseline. How can you lose? There will be a HUGE demand for both these products in the VERY near future!

Goodbye to those crazy looney money lending days. said...

Aw common lets buy some condos in Miami--my realtor says its a great time to buy and that all the latin americans with all their cash insures that in 2008 we will see big gains again!!!!!

Actually, it is sad but many of the trolls and twits really do not understand what any of this means. Sadder yet, they are still desperately mouthing the nonsense comming in ther century 21 E-mails...

Bye bye trolls! Bye bye 40k millionaires, bye bye Gap Assitant manager turned mortgage broker, bye bye borrowing from the House ATM to maintain a lifestyle you cannot afford, bye bye Florida, Vegas Economy of low lifes--the low life will go back to driving pintos and paying Mastercard, Countrywide and DA Rupcy Lawyer.

Hello Mr. Macdonlds manager, hello mr. Bankrupcy judge, hello my wife will blow you for a $20 or lunch, Hello sanity and returns to work and producitive assets!

Anonymous said...

I have talked to people for years about this happening. Suddenly everyone is trying to sell oops to late. I sold in early 2006 proud renter of a nice house for 1/2 my mortgage payment since. I feel sorry for some people screw the rest. Houses here in Colorado down roughly 20% and not moving.

Anonymous said...

Keith so where would you put ypour money right now, I have 200,000 cash hsbc, and ing direct.

Anonymous said...

4-29-06
"REAL ESTATE COLLAPSE IS BIG ENGINE OF FAILURE"


I wrote this in my intuitive journal along with a lot of other stuff over a year ago.Ihave been watching in disbelief to see this happening and it being blamed by all the talking heads on subprime.

Keith may be that smart but I'm not. Now to see it happening! Theideathat RE i.e. "subprime" would crash the economy was fought by the experts for months and I even doubted my own gut. I used to have alot more posted on patrick.net but after ridicule by all the smug regulars over there I pulled it down.

The implication is that the fallout will be far reaching..Got Milk?....and food and......

Anonymous said...

Let's see if PPT can keep this market positive on Friday. We know there's no reason whatsoever for the market be positive on Friday. If it becomes, you know that PPT was the culprit.

Funny thing is that on Monday everyone on Wall Street and CNBC were passing the Kool-Aid of how everything was tip-top, and the financial sector lead the way to pull the market up to the stratosphere. Just a few days later...

Wow, does anyone believe in anything that comes out of the Fed, Bernanke, MSM, Wall Street, Bush, etc?

Anonymous said...

Keith...thanks for being prescient and smart and sharing all with an open mind.

Anonymous said...

You know what's really scary.

This whole panic is just the beginning of the wakeup call. Just a whiff of bonds not being worth what people thought and brokers are tanking, mortgage companies are going bankrupt, and hedge funds are blowing up. Just the uncertainty is doing this? What's going to happen when the certainty of 70% loss of home value sinks in?

What's going to happen when house prices actually start falling for real instead of just the 2-3% they've been falling so far?

I've got a real bad feeling about this.

I've got my funds ready to purchase some cheap acreage and buildings in a nice part of the country where I can have solar power, wind power and grow enough fruits and veggies to maybe weather the upcoming storm.

Anonymous said...

Imagine this picture.

Instead of "undocumented" Mexican workers standing on the corner for day work, we get middle class white guys doing it, some in suits and ties.

Don't laugh.

Anonymous said...

Just one question Keith. Do we, HPers, who have been on this site from the beginning, get to do our choreographed "I told you so" dance now?

Hmm, I tell you what, let's wait for Countrywide to go down in flames first.

Anonymous said...

Liquidity is nothing more then "GREED and FEAR" and the "Path of Less Resistance".

Now it all about CREDIT WORTHINESS

http://home.eircom.net/content/
irelandcom/biznews/
10897312?view=Eircomnet&cat=
Business

The global credit crunch has its roots in areas like Florida where homebuyers gambled on rising prices with money they did not have, writes Eoin Callan

The seizure that gripped European financial markets yesterday can be partly traced to an unlikely place. Like the proverbial butterfly that flaps its wings and sets off a tidal wave on the other side of the world, Sarasota, Florida is at the centre of the US housing bust that sent shock waves through global markets.

The Gulf coast community seems an improbable setting for a financial crisis. Pristine yachts bob lazily off an eight-mile barrier island as bronzed children play close to sea turtles in the sugary white sand.

The shoreline is dotted with a blend of exclusive beachfront residences and family-friendly condominiums that give it an all-American appeal and have attracted well-known homebuyers such as Stephen King, the author.

But along with bubble property markets across America, west Florida has seen its luxury lifestyle shaken. The Sarasota district has experienced the biggest drop in house prices in the country, with foreclosures spiking after a drop of almost 15 per cent in the year to March.

Florida is the "canary in the cage", according to Jan Hatzius, chief economist at Goldman Sachs.

The precedent has alarmed Wall Street economists tracking the worst US housing slump in 16 years, as price falls in Sarasota have spread across the state and threaten to drag Florida into recession.

But what caused the west Florida housing bubble to inflate and then suddenly pop?

It is tempting to point the finger at the rise in popularity of high-risk adjustable loans that were backed by complex new credit securities, which are now in distress, and in some cases regarded by traders as worthless.

These innovative financial instruments played a role. But the accounts of residents, real estate agents and mortgage brokers in Sarasota point to a more familiar culprit: simple, old-fashioned greed.

"People were buying places figuring they would put in a new kitchen and then flip them. It was greed. We were all in the same game. We were selling a piece of paradise," says Christina Neff, a real estate agent with Michael Saunders in Siesta Key. "Flippers are behind what is happening."

keith said...

Now we get to see...

Now we get to see who was swimming naked.

Now we get to see who owned those toxic loans.

Now we get to see what Americans can do for a living when they no longer have an economy based on buying homes from each other.

Now we get to see The Worst President Ever try to navigate The Biggest Financial Crisis Ever

Now we get to see the NAR try to spin this

Now we get to see...

Anonymous said...

The Associated Press. “‘This is a mini-panic,’ said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co., calling the banks’ injection of money into the system an unprecedented move, and evidence that the problems in subprime lending are, in fact, spilling into the general economy.”

“‘All the things that had been denied up until this point are unraveling,’ Battipaglia said. ‘On top of this, retail sales were mediocre, which shows that indeed, the housing collapse is affecting the consumer.’”

Anonymous said...

Asian Stocks Plummet on Credit Fears; Bank of Japan Injects $8.4 Billion Into Money Markets


TOKYO (AP) -- Asian stocks plunged Friday as fallout spread from global market turmoil set off by concerns about credit weakness in the U.S. The Bank of Japan joined its U.S. and European counterparts in pouring cash into money markets to calm growing jitters.

Anonymous said...

But Greg Swann said everything would be fine and it was a great time to buy!

Anonymous said...

The concerted efforts of the world's central banks smacks of the pre 1929 crash market players that via concerted efforts attempted to prop up the market with "Organized Support" which ultimately failed to work as it was too little, too late in the face of the overwhelming power of the market forces that had been years in the making that would sweep under the economies of the world.

I do not know if this will be the same or similar, but it is eerie and troubling.

Anonymous said...

- Clear!
- Inject 1 trillion European central bank liquidity.
- Clear!
- Inject half a trillion Canadian liquidity.
- Clear!
- We've got a pulse! Put the oxygen mask back on and go tell the FED we need more interest rate clamps and some clean fiat currency syringes

Anonymous said...

Newsweek came out with a web exclusive today, about how the sub-prime lending mess is also seriously affecting America's overall credit card debt. Big credit card issuers are increasing rates across the board, even for people with stellar credit..blaming the economy, and subsequently causing a widening credit squeeze:
http://www.msnbc.msn.com/
id/20201030/site/newsweek/page/0/

Anonymous said...

It's unbelievable that the same people buying those prepaid phones at Radioshack because they can't get a phone contract still manage to get mortgages.

bush did 911* * * * * * * said...

* * * PANIC MELTDOWN! * * *
August 10, 2007 REUTERS

"In principle what we have at the moment is an all-round sense of PANIC," said Marc Ostwald, bond analyst at Insinger de Beaufort in London.

Also, the world knows that Bush/Cheney and the rest of the US Government criminal regime DID 9/11!

It wasnt bin laden,
It wasnt Saddam,
It wasnt Al-Quaida,
It wasnt the Taliban,
It wasnt 18 hijackers w/box cutters,
and it wasnt the CIA's Misoui!!!

IT WAS THE GOP BUSH/PNAC REGIME that masterminded the 9/11 fake attacks!

It was the world's biggest scam and mass-muder in world history!

* * Attention US government employess (and elected officials) and GOP government agencies (CIA,FBI,FAA,NSA), media affiliated companies and corporation owners * * *

You are all under a MAJOR criminal investigation. Your crime is TREASON! (and no, peak-oil and/or religious beliefs is not a reason to commit mass-murders) We all know that your criminal activities have not gone un-noticed. We have 100% evidence, documents and witnesses that proove that 9/11 was a big lie with a massive plan to cover-up and hide the truth!

GIVE-UP NOW! (Or get a longer prison sentence!) Giving out false information, hiding the truth, blocking the 9/11 investgations, lies, murdering, deceptions and fear mongering ARE BIG TIME CRIMES!!!!

TURN YOURSELF IN TO A LOCAL LAW ENFORCEMENT AGENCY NOW FOR A LIGHTER PRISON SENTENCE! WAKE-UP! DO THE RIGHT THING! ARREST BUSH AND CHENEY AND ALL THE 9/11 EVIL-DOERS! NOW!!!!!!!!!!

bush, cheney and GOP are criminals! said...

The reason for this mess?

The bush regime's false war on terror - from their greedy plan to take over the mid-east oil-supply by a false 9/11 attack!!

9/11 was a hoax people! It was mass-murder!

The biggest false bullshit story in world history!

SPECTRE of Deflation said...

Liquidity ain't money folks. It's debt. There is no cash on the sidelines. Only liquidity/debt. A very hard lesson is about to be learned.

Keyser Soze said...

At least Joe Battipaglia learned his lesson from the dot.bomb debacle...

Anonymous said...

KEITH:

I have to admit hombre, you were right. I figured housing would drop a little, here and there and the world would go on. I was wrong. Boy oh boy was I ever wrong.

All I know is thank god I have my money in cash right now and rent.

Anonymous said...

It isn't 1929 Mr Drama Kings. It's somehwere in between 1987 and 1997. Markets are crashing..a whole 5% from peak!!!

Geez get some perspective. OOOOHHH dow is down 400. Yea from 14700. This isn't 1987 when it fell 500 from 2000.

You guys are worse than the MSM with your hysteria.

borkafatty said...

CENTRAL BANK ACTIONS
Aug. 9
Bank Injection
ECB $131 billion
Federal Reserve $12 billion
Bank of Canada $1.1 billion
Aug. 10
Japan $8.5 billion
Australia $4.2 billion
ECB $84 billion

Total $240.8 billion


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

Yikes!!!!!!!!!! LA! LA! LA! LA!!!!!! Fat Lady Singing

Anonymous said...

What really sucks is I can't share in this joy with anyone. Everyone I know "owns" property, stocks, etc. I'll have to keep my glee inside. Oh Well HP will be my place to scream out YEEEEHAAAWWWW

borkafatty said...

Keith so where would you put ypour money right now, I have 200,000 cash hsbc, and ing direct.

----------

If i were you..which I am ..i would get a safe and keep your money close..real close...the Liquid that has been infused will only last so long...cash is King once again.

I pulled all my positions 6 months ago...and sleep well at night knowing I did i so.

Anonymous said...

Bush is finally right on something:

http://www.marketwatch.com/news/story/bush-against-more-mortgages-fannie/story.aspx?guid=%7B550D5AFD%2D3900%2D411A%2D8EA4%2D8CD2E28AD678%7D&siteid=yhoof

Anonymous said...

Do a post on Orangzillo and his pump and dump selling.

Where is the SEC?

Anonymous said...

What a surprise, the troll is awol.

Anonymous said...

fed funds futures at 4.75% by Sept....you don't really think central banks will let anything bad happen do you?

In an election year? Dream on.

There will be a housing bail out. We will have 2002 like fed funds rate.

Anonymous said...

Still in early stages, wait until 2-3 months after the first resets in October, that is when it will be getting interesting. I think the market will be back up to 13400-13500 again next week, then it will drop another 300-500 points, and then rinse and repeat for the next 1-1/2 years in a slow downward grind.

SPECTRE of Deflation said...

The FED did a repo of ONLY MBS PAPER. This is very bad, as they are buying toxic shit that no one wants. CNBS says they can't remember the FED ever doing a repo of MBS paper only. LOL! The markets are screwed.

Anonymous said...

WaMu is a $2 stock waiting to happen!!!!!!!


pay option mortgage = hehehehe

Anonymous said...

If there is a 2%+ drop on the S&P500 today I'm buying back in. I just don't see the major crash coming, not with the fed throwing money around like they did this morning.

Ben Bernake will inflate us out of this mess. Gold and consumer products is where I'll wanna be.

LauraVella said...

Anon said:"Goes to show that Feds should not of reacted to 2000 stock crash and 911 by lowering the rates ,and they should not of held the rates low for this long .

Maybe the whole world went nuts after 911".

----

Totally agree Anon. 911 was definitely the castalyst that caused this. Feds went overboard lowering interest rates for too long.

Virtualco said...

When will the run on the banks begin?

I have some cash but would like to be ahead of the curve in case of panic cash withdrawing from banks and CU's.

Anyone have a clue on what to look for also?

LauraVella said...

My 84 year old father who told me stories about the the great depression, passed away recently.

He never owned a credit card - paid cash for everything. By not paying interest & spending less than he earned he was able to save quite a bit of money...thats really the key when you think about it.

During this credit crunch, many people will find out credit cards are mostly evil.

Anonymous said...

I for one am going to miss hearing these words: "Bad credit? NO PROBLEM!!"

I also am going to miss Dopey. Something tells me we won't be hearing much (if anything) more from him. {sob sob}

brokersleaveyoubroke said...

Anon said

Hmm, I tell you what, let's wait for Countrywide to go down in flames first.

You don't have to wait long. Today they said that lack of credit may have a serious impact on their ability to conduct business. CFC is going down. Where's that troll that posted a few days ago that CFC had 187 billion in cash. I wish he'd come back so we could laugh at him.

Anonymous said...

OH NO!!

DOW down 5% after gaining 20% July 2006 to July 2007.

And now on this great Black Friday you morons keep talking about the DOW is down....wait for it.....80 points. Holy shit. What a crash. I see people jumping out of windows. The horror, the horror of it all.

NOT DOPES

NOT MORONS

IMBECILES!!

Troll said...

Hey Bitter Renters out there!

You are ALL moronic if you think that a global market collapse is a good thing. So, you're renting and sitting on a pile of cash, right? Great, now your cash is soon going to be worthless (i.e., cash is not king) and you will have no place to live. Better get your soon-to-be worthless cash out of your high-yield bank accounts before they go under. Geniuses!

Anonymous said...

He never owned a credit card - paid cash for everything.
=========

Your grand father was a fool.

I get a cashback - 5% on gas and 1% on everything else. I spend about $75K a year on that card. Do the math on what I get back, over $1000 tax free income per year.

I pay 0% interest since I always pay the balance in full. Yet I get 20-25 days interest free loans every billing cycle.

Paying cash and getting nothing instead of doing that is idiotic.

I agree paying interest is a bad idea. Paying cash and foregoing the benefits of credit cards is an even worse idea.

Anonymous said...

>> If i were you..which I am ..i would get a safe and keep your money close..real close...the Liquid that has been infused will only last so long...cash is King once again. I pulled all my positions 6 months ago...and sleep well at night knowing I did i so.

Homo said what?

SPECTRE of Deflation said...

bush, cheney and GOP are criminals! said...
The reason for this mess?

The bush regime's false war on terror - from their greedy plan to take over the mid-east oil-supply by a false 9/11 attack!!

9/11 was a hoax people! It was mass-murder!

The biggest false bullshit story in world history!

You are one of the sheeple. Elites, forget about Republicans and Democrats, are for Elites. It's us against elitism you jackass. How stupid can you be to think that either political party gives a rat's ass about you or me. MORON!

Anonymous said...

>> The biggest false bullshit story in world history!

Uh, no - that would be the 16th Amendment and the Income Tax.

Anonymous said...

>> TURN YOURSELF IN TO A LOCAL LAW ENFORCEMENT AGENCY NOW FOR A LIGHTER PRISON SENTENCE! WAKE-UP! DO THE RIGHT THING! ARREST BUSH AND CHENEY AND ALL THE 9/11 EVIL-DOERS! NOW!!!!!!!!!!

Who's going to do the arresting? You and what army?

ALAN DEE said...

Sorry everyone but stocks will continue the march up to 18,000. Then we will see a depression. Hold your pants on, this is just the first stage.

Anonymous said...

Borka said:

CENTRAL BANK ACTIONS
Aug. 9
Bank Injection
ECB $131 billion
Federal Reserve $12 billion
Bank of Canada $1.1 billion
Aug. 10
Japan $8.5 billion
Australia $4.2 billion
ECB $84 billion

Total $240.8 billion


People here have been asking if there will be a bailout. 1/4 trillion that will evaporate like the morning dew is what I call a bailout(and it's just the first two days!). This shows clearly that Wall street owns the governments of the western world.

SPECTRE of Deflation said...

Second FED operation today. This time it's $16 Billion. More MBS?

SPECTRE of Deflation said...

More MBS. LOL! Unfrigging real. It's no wonder GOLD is up $13 today because the FED has now shown it's hand. More degi-dollars or liquidity/debt added to the system. It's like trying to hold back Lake Mead with your finger in the Hoover Dam.

Fed Accepts $16 Bln In 3-Day RPs
Last update: 8/10/2007 10:57:05 AM

Type of transaction: 3-Day RPs
Total accepted: $16 Bln
Total submitted: $40.95 Bln

Mortgage-Backed Collateral Operations
Total accepted: $16 Bln
Total submitted: $40.95 Bln
Stop-Out Rate: 5.25%
Weighted Average: 5.27%
High-rate submitted: 5.35%
Low-rate submitted: 4.5%

(Data was provided by the New York Federal Reserve Bank).

(END) Dow Jones Newswires
August 10, 2007 10:57 ET (14:57 GMT)

SPECTRE of Deflation said...

Market trims losses after 2nd FED move per CNBS. LOL! They will say the same thing several times today as the FED continues to buy worthless MBS toilet paper.

DrNo said...

Wow. here comes the bailout. The printing presses are smokin' today.Liquidity injection worldwide over $120B

Anonymous said...

You dopes are blaming Bush because millions of idiots took out loans they couldn't afford. Yeah that makes sense. I suppose Bush is also to blame for the cold I caught this week.

borkafatty said...

Homo said what?

----------

Oh! Gee! another Anonopussy trying to impress his boy friend

Mark in San Diego said...

San Diego from the center of the storm. . .the condo construction is going on right outside my window - over 1500 new units are currently being built - Corus Bank is financing a lot of them if anyone wants to short them. . .in other news - The good news about a "run on the bank". . .no one has saved any money this time, so there will be no run on the traditional FDIC Insured accounts. . .let's see - the savings rate is NEGATIVE!!

Ron said...

Dopes is blasting a gasket.

Friggen moron of the decade, cheer leading the liars with no self respect or convictions.

I bet money you live in So Cal and in fact in the OC.

Anonymous said...

Big buy at 11:00 AM. I guess that $250billion fix is kicking in, the junkies will be nodding off soon.

SPECTRE of Deflation said...

When Faber talks, I listen.



U.S. Stocks Are at Start of Bear Market, Faber Says
Source: Bloomberg News
URL Source: http://www.bloomberg.com
Published: Aug 10, 2007
Author: Eric Martin and Carol Massar
26 Comments


Aug. 10 (Bloomberg) -- U.S. stocks are at the beginning of a bear market in which benchmark indexes may fall more than 30 percent, investor Marc Faber said. Faber, managing director of Marc Faber Ltd. and publisher of the Gloom, Boom & Doom Report, said losses in mortgage-backed bonds are not ``contained or easily solvable'' with interest rate cuts by the Federal Reserve. He predicted in an interview today that the Dow Jones Industrial Average will drop below 12,000. Faber said investors conditioned to buy stocks on dips helped push the indexes to records after sell-offs in February and June. Emerging markets are particularly vulnerable to a so- called correction, or decline of more than 10 percent, because investors have bought into them heavily, he said. The MSCI Emerging Markets Index has dropped 9.9 percent since climbing to a record on July 23, cutting its gain for the year to 15 percent. The Federal Reserve yesterday added $24 billion in temporary funds to the banking system, the most since April, amid an increase in demand for cash from banks roiled by U.S. subprime loan losses. Traders are speculating that the Federal Reserve will cut interest rates at an emergency meeting as soon as next week, according to Merrill Lynch & Co. ``I'm very critical of central banks,'' Faber said. ``They may bail out the system, but there will be a cost, and the cost will be inflation.''

Market Calls

Faber told investors to bail out of U.S. stocks a week before the 1987 Black Monday crash, according to his Web site. He correctly predicted in May 2005 that stocks would make little headway that year. The S&P 500 gained 3 percent. He also told investors to buy gold in 2001, before it more than doubled. On March 29, Faber said the emergence of home loan concerns meant the stock market was unlikely to benefit from the conditions that supported its rally since June 2006. The S&P 500 climbed 10 percent between then and July 19, when it reached a record, and has fallen 6.4 percent since then.

Anonymous said...

"Is everybody happy"?

Budvar said...

Here's an article entitled "Letter From Lawyer Describing Real Estate During the Great Depression", the phrase "Being butt f*cked lubed with salt and broken glass" doesn't even begin to describe the approaching shitstorm.

http://www.survivalblog.com/2007/08/letter_from_lawyer_describing.html

LauraVella said...

Anon said:"Imagine this picture.

Instead of "undocumented" Mexican workers standing on the corner for day work, we get middle class white guys doing it, some in suits and ties.

Don't laugh".

-----
Agree. I can imagine it, and I am not laughing...very real indeed.

The holidays will be very interesting too. I for one think Christmas has gotten so commercial-its time to celebrate good food and family...forget about the gifts.

devestment said...

Did I mention that I buy distressed assets?

Anonymous said...

Anonymous said...
Imagine this picture.

Instead of "undocumented" Mexican workers standing on the corner for day work, we get middle class white guys doing it, some in suits and ties.

Don't laugh.

August 10, 2007 8:49 AM

Hahahahahaha! World economy is exactly like the world economy in 1929. Oh wait it is like 1000 x bigger with hundreds of new industries. This great depression talk is non sense. Let's have a prolonged market correction and then a recession before you leap into the end times and the greatest depression of all times.

Anonymous said...

Karl Rove that great american patriot has a plan

Anonymous said...

SEC combing Wall St books for subprime losses
Friday August 10, 10:36 am ET


NEW YORK (Reuters) - U.S. regulators are scrutinizing the books of Wall Street's largest investment banks amid questions they are hiding losses from subprime mortgages, people familiar with the inquiry said.

Analysts and investors have raised questions whether there are unreported losses from subprime-mortgages and collateralized-debt obligations, or CDOs.

The regulatory checks are expected to include Wall Street's five biggest investment banks, starting with Goldman Sachs Group (NYSE:GS - News) and Merrill Lynch & Co. (NYSE:MER - News). Goldman Sachs and Merrill Lynch declined to comment.



http://biz.yahoo.com/rb/070810/sec_banks_inquiry.html?.v=6

Anonymous said...

BWA HA HA HA HA HA

The great crash of today is turning into an up day.

OK back into the caves you go. Sub-humans can't stay in the sun too long.

Chumps.

Anonymous said...

looks like a short squeeze is coming.

but economic fundamentals (slowing consumer, falling home sales, and a stalled mortgage market with higher lending requirements) don't bode well for the future.

Anonymous said...

markets are up

oh well crash was fun while it lasted

LauraVella said...

Stupid A$$ Anon said: "Your grand father was a fool".


How disrepectful you are...you're taking about my father, twit.

He didnt have to worry about a measly $1000 cash back on purchases because he had a wonderful pension from the Ironworkers union, and he received low-cost medical care from the Veterans Association because he was a World War II Vet.

Let's see what you'll survive on when you are 84.

Most company benefits will be eliminated. Dont brag on that cash back incentive, because credit card companies will be in trouble soon from dead beats that cant pay on their cards so this current "perk" will get canceled.

Let's see how well you'll live when you're old, big man.

LauraVella said...

Wow, it's Trollsville here today.


Hey trolls, why were you hidding yesterday??? LOL. Go back to your cave where you belong.

Anonymous said...

GOLD TO THE MOON ALICE!!!!!!!

Anonymous said...

"the root cause was traced to America where the fallout from the meltdown of the market for risky, or sub-prime, loans"

Meanwhile, Spain is being forced to sell gold to handle its "real estate" problem. But the ECB helps old Ben with a temporary wad of fresh cash.

k.w. - southern ca. said...

All questionable loans (sub-prime being a portion) were packaged up nicely as bonds so that house debter payments where passed onto investors.

How many investors out there in the global financial market have invested in these toxic bonds?

No one knows for sure, but the global economy is just now starting to feel the pain.

Anonymous said...

The panic is officially here and the end of the GOP is eminent. Ideologiocally driven incompetence got us here folks.

rcochran said...

The Fed just purchased billions in mortgage-backed debt, and of course the markets reacted to this. But this won't even make a dent in reality. This is an act of desperation to try to prevent a stock market meltdown. They'd better have lots more tricks up their sleeve or the house of cards is gonna tumble ALL the way down, and soon.

k.w. - southern ca. said...

I suggest you take a look at the
front page of any major newspaper.

More "hysteria" to come as we approach October 2008.

~~~

Anonymous said...
It isn't 1929 Mr Drama Kings. It's somehwere in between 1987 and 1997. Markets are crashing..a whole 5% from peak!!!

Geez get some perspective. OOOOHHH dow is down 400. Yea from 14700. This isn't 1987 when it fell 500 from 2000.

You guys are worse than the MSM with your hysteria.

Anonymous said...

all green across the screen....that's it boys. The decision has been made. Hyperinflation is the way Ben B. is taking it.

SPECTRE of Deflation said...

ALAN DEE said...
Sorry everyone but stocks will continue the march up to 18,000. Then we will see a depression. Hold your pants on, this is just the first stage.

Where did you purchase Dorothy's Ruby Slippers?

Anonymous said...

HP Song Theme,

It's the end of the world as we know it.
It's the end of the world as we know it.
It's the end of the world as we know it and I feel fine.

Anonymous said...

k.w. - southern ca. said...
I suggest you take a look at the
front page of any major newspaper.

More "hysteria" to come as we approach October 2008.

~~~

Anonymous said...
It isn't 1929 Mr Drama Kings. It's somehwere in between 1987 and 1997. Markets are crashing..a whole 5% from peak!!!

Geez get some perspective. OOOOHHH dow is down 400. Yea from 14700. This isn't 1987 when it fell 500 from 2000.

You guys are worse than the MSM with your hysteria.

August 10, 2007 5:34 PM


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

Right. MSM is hysterical. HP is worse.

Thanks for making my point.

Anonymous said...

That's what I call transparency. Nobody knows how deep the hole is. How can anyone invest money in this market is beyond me. This market is totally manipulated, corrupt, and shouldn't be trusted.

And the PPT is trying to make this worthless market positive today, like everything has been fixed. Only an idiot would believe on that. CNBC is hard at work passng the Kool-Aid to the sheeple.

And one more thing, if this economy has been so great, like the Bushies keep vomiting, why don't people have the money to pay for their mortgages? If unemployment is so low, why mortgage companies, Realtors, and builders are going bankrupt? Helloooo??? Who's the moron who's buying that crap? Yeah, I'm talking to you DOPES guy.

Frank said...

Keith,

"Worst President Ever"?

Wow - I can tell you weren't around for the Carter years!!!!

Anonymous said...

Wow, isn't that amazing how surprised the MSM is now about all this mess that we, HPers, have been forecasting for years? And they are the analysts making 6 figures, go figure. It's nothing but a huge corrupt system.

Before the pundits were selling that the housing market was the catalyst of "this great economy", now they are saying that the housing market is not that important to the economy.

Anonymous said...

Let's see what you'll survive on when you are 84.

Most company benefits will be eliminated. Dont brag on that cash back incentive, because credit card companies will be in trouble soon from dead beats that cant pay on their cards so this current "perk" will get canceled.

Let's see how well you'll live when you're old, big man.

August 10, 2007 5:13 PM


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

WTF are you yapping on about sweetie? You don't seem to understand a very basic concept. I pay with cash. Only difference is I pay that cash to a crediut card that gives me back 1%+ of my purchases. If you think paying cash and getting back NOTHING is a better deal you are really financially stupid.

As to retirement and benefits, HUH? What does using or not using a credit card have to do with anything? I am not counting on the cashback as retirement income you dumbass. It is a perk that I get now for doing nothing.

God almighty you need to loosen up that tinfoil hat every now and then.

SPECTRE of Deflation said...

Anonymous said...
The panic is officially here and the end of the GOP is eminent. Ideologiocally driven incompetence got us here folks.

From both sides of the Elite aisle my friend. Don't be a sheeple concerning GOP and Dems. Niether group gives a rat's ass about the common sheeple.

Anonymous said...

Injection of Liquidity = Bailout with taxpayer money of crooks at Hedge Funds.

Anonymous said...

Helicopter assault scene from Apocalypse Now (ie what will happen when the Fed cuts rates and the Carry Trade unwinds...)


http://www.youtube.com/
watch?v=XjYhTnh6Zaw

Anonymous said...

Bwahahaha...now the corrupt MSM is trying to sell that "Technology" is the hot thing right now, forget about housing and hedge funds.

Let it go, sheeple, every one of you should jump to technology because the crooks in Wall Street need to pay for their yatches and the McMansion in the Hampton.

Man, this country is going down fast.

Anonymous said...

The great depression had many different causes - real estate was a byproduct of it, not a cause.

Some of the causes included the oppression of Germany's economy after WW I, which led to them accepting Hitler as their leader. Another was the ability for the common people to buy stock on the stock market with less than 10% down.

Imagine buying nowadays $1 million in stock for $100,000. You've borrowed the rest - not in terms of stock, but of real money.

Now behind the scenes the stock has been sold very low and so when the market opens all of a sudden the value plummets to $50,000 or less. Now you've not only lost $900k, but you have almost nothing left of your original 100k...and problem is when no one wants to buy your paper (stock). But there will always be someone who wants to own real estate, and that is how the price should be set - supply & demand.

I agree with some of the commenters here however.

before 9/11, when you could get a 2 bedroom condo in a decent part of OC for $130k. Now while the market is still correcting, they are going for 300k plus.
The common folk in OC just can't afford it - and it is frustrating to see all these other people buying up the homes just to flip them - they pushed the price of the homes up...flippers selling to flippers...so now the last one playing musical chairs didn't notice there is no one else left to play, so they're stuck holding the bag.

Another major problem that pushed it so far in the OC is that for a few years there, it WAS cheaper to buy a home, esp with a ARM. Mostly because of the "demand" for rentals due to the non-citizen population increase, and 3+ incomes paying for an apartment rental.

Anonymous said...

YOU HAVE NO IDEA! YOU HAVE NO IDEA! YOU HAVE NO IDEA! THEY DON'T KNOW NOTHING!

Hey Cramer, Bernanke heard you and he's bailing out your "nice friends" on Wall Street.

Anonymous said...

And one more thing, if this economy has been so great, like the Bushies keep vomiting, why don't people have the money to pay for their mortgages? If unemployment is so low, why mortgage companies, Realtors, and builders are going bankrupt? Helloooo??? Who's the moron who's buying that crap? Yeah, I'm talking to you DOPES guy.

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

I'm not dopes but I will answer.

The economy growing at 3-4% will not allow someone to borrow $500K on a $50K salary. You can have a great economy and a r/e boom/bust at the same time. Conversly you can have a shit ass economy as we did in 2001 and 2002 and have a real estate boom. The two are not always correlated.

Companies go bankrupt every day. Thousands of companies went under during the late 90s. A million jobs go away every year during good and bad times. This isn't 1955 when you graduate and go work for IBM for the next 40 years.

I'm 33 and I'm on my 4th job since college. I don't expect job securiy and I don'tgive loyalty to an employer either. I know I can be let go any day but at the same time the second something better comes along I'm gone too.

I make more than three times as much money as I did my first year out of college. This system is just fine by me. The only people who complain are whiners like you who expect someone to take care of you, be it an employer or the government. So you lose your job, it's Bush's fault right? You can't afford a house because you make $10 an hour, it's Bush's fault? You dropped out of high school, it's Bush's fault. Nothing is ever your responsibility and someone else is always to blame.

You are pathetic.

FlyingMonkeyWarrior said...

SPECTRE of Deflation said...

Liquidity ain't money folks. It's debt. There is no cash on the sidelines. Only liquidity/debt. A very hard lesson is about to be learned.
*************************
But I get cash back at closing, that is Money, isn't it?
signed,
Casey Serin

Disclaimer: Just kidding, I am really FMW, not Casey Serin.

Anonymous said...

>> Ideologiocally driven incompetence got us here folks.

To believe that all this, including the demise of the USA, was either by accident or incompetence, is sheer ignorance. This has ALL been planned, for decades, probably before you were even born. The decline and fall of the USA has been an extremely carefully orchestrated process, with very clear goals in mind.

Anonymous said...

"So, you're renting and sitting on a pile of cash, right? Great, now your cash is soon going to be worthless (i.e., cash is not king) and you will have no place to live. Better get your soon-to-be worthless cash out of your high-yield bank accounts before they go under. Geniuses!"

No, you are the genius for assuming that most HPers haven't been covering their asses. Do you really think that we didn't hedge ourselves against this obvious financial Armageddon? Do you really think that we are holding the worthless dollar or that we are pyaing mortgage to oompa loompa Mozilo? Man, you are such a tool...now go back to kiss Karl Rove's picture and watch Kudlow, fool.

Anonymous said...

The GOP is just rolling out the red carpet for a Democratic sweep.

We would have never received the big government social programs of the new deal had the GOP gone bonkers in the late '20s. Now what's going to come?

The GOP is it's own worst enemy.

Anonymous said...

"I'm not dopes but I will answer.

The economy growing at 3-4% will not allow someone to borrow $500K on a $50K salary."

Hey troll, nobody believes you here. Move on to another blog or go watch Kudlow.

yuccatree3 said...

The FED did a repo of ONLY MBS PAPER. This is very bad, as they are buying toxic shit that no one wants. CNBS says they can't remember the FED ever doing a repo of MBS paper only. LOL! The markets are screwed.
__________________________________

America is turning into another Japan, because this is what Japan did--propped up its over-leveraged banks so they wouldn't go under. I feel the whole world is very close to a huge bust....

Roccman said...

Let the dieoff begin.

Anonymous said...

Third time today that the FED injects money. $3 billion now. Hey Fed, you can inject as much money as you can because nothing will change. The fundamentals are crap, this economy is crap, the retail figures are in toilette, our infrastructure is collapsing because all the money is going to the phony war (transferred to Bush cronies).

Hey sheeple, vote for Giuliana and Mitt for more phony wars made up only to transfer your hard working money to their evil cronies. The GOP is not done yet with you, they want to suck you dry and leave your kids homeless.

Anonymous said...

Funny, the greedy and corrupt republicans complaint about social welfare and socialism, but when Wall Street craps all over the place, there comes the republicans using the taxpayer money to bail bankers and hedge funds out. Isn't that a socialist practice? The GOP is nothing but a bunch of hypocrites.

Anonymous said...

Wasn't everything supposed to be perfect once the Dems came to power? What happened?

Housing is crashing, stocks are cratering, gas is still $3, inflation is out of control, the war is still going on with even more troops than before.

Hmmm.

Ms. Pelosi any comments?

Mr. Reid?

Mr. Shumer?

Ms. Clinton??

Mr. Kennedy?

Anyone from the Democrat party?

Anyone at all?

Oh but you raised the minimum wage and have spent the past 4 months investigating whether Alberto Gonzales fired someone or didn't fire someone for political gain. My bad, you are doing a great job after all Dems, keep it up.

LauraVella said...

Anon Troll said:"WTF are you yapping on about sweetie"?


Why do you have to be so disrespectful?

Have you thought about enrolling in anger management classes? It might be a good idea...

Enjoy eating the grass and pansy's from your yard while you can big man.

LauraVella said...

Anon A$$ said:" If you think paying cash and getting back NOTHING is a better deal you are really financially stupid"


I never once said I didnt use cash back bonuses. I was telling a story about my father you retard.

Anonymous said...

"Oh but you raised the minimum wage and have spent the past 4 months investigating whether Alberto Gonzales fired someone or didn't fire someone for political gain."

Let me tell you why the reason why Dubliah is so loyal to the Generalissimo Mexicano Gonzales. It happens that in a distant past Gonzales took the Dubliah off the hook in Texas, when he was busted driving drunk and high on coke, with the car full of hookers. The "familia", as usual, made a deal with Gonzales who as the D. Attorney of Texas at the time. Every person with a brain knows about this story. The evil GOP just fools the sheeple, not all of us.

Anonymous said...

US Economy:

Bush said "Pull it"

Anonymous said...

Hey folks, everything is tip-top now. The market almost became positive after helicopter Bernanke printed billions of worthless dollars. Thanks FED and WH, now we trust the market and this economy. Everything is so wonderful that I'm going to lease a new Mercedes and buy a couple of McMansions over the weekend. While I'm at it, I'll be listening to Rush Limbaugh and all that sweet talk from Giuliana. But I'll be very, very attentive to anything unusual out there on the streets because the bogeyman terrorist might be trying to steal my freedom. Life is o great with all these republicans leading the country!

*add here a flying eagles and a blond child holding a waving flag*

turdly said...

Homo said what?

August 10, 2007 3:41 PM

That made me laugh harder than I have in a month!

Hell, I'm still laughing.
Thanks man, that made my day.

Shakster @ DER Wienerschitszel said...

How do you say, "Thanks for nuthin' San Diego! You nimrods!"

In Spanish?
In French?
In German?
In Chinese?
In Japanese?
In Italian?
In Swedish?
...
-----------------------------------
German- I think is -DANK NEIN DANKA! SWEINHUNDTS!!Gutten TAG EISSHOLES.SUKKEN ZEE DIK,ACHTUNG!

Anonymous said...

what in the world is lauravella yapping about? pansies (not pansy's my dear, learn some grammar) and grass eating?

Looks like someone is in complete disarray over the fact there is no crash. There was no crash. There will be no crash. She is realizing that all her hopes and dreams are been crushed by Bernake today. Her 5% cds are worthless in the face of escalating inflation. Her dreamo of one day owning a home have just gone up in smoke. It's over sweet thing, rates are plummeting, home prices are heading back up. Ben B has spiked the punch bowl and the party is starting up again. Only once again you weren't invited. Too bad so sad.

For me, I gotta get me a new pair of dancin' shoes, this party is going all night long.

Anonymous said...

Cash will not be king. It will be oil and natural gas.

RJ said...

The DOW is down way more than 5% in real dollars. Nice try Trolls. The only thing that kept this market afloat was debt upon debt. LBOs, buybacks, CDOs, on and on. So, true, in nominal terms the market isn't crashing - yet. But so what? Once our foreign friends begin to dump dollars in earnest, which could be triggered by the FED running the presses all out, the markets are toast. And don't get your hopes up about emerging markets. China and India are both struggling with insufficient energy supplies which will only get worse, not better. Why do you think China is spending oceans of cash buying up resources "at the source," engaging in a crash naval program, building up its nuclear forces and threatening the U.S. with a dollar crash. They're preparing for an energy war.
Believe me, credit and liquidity are the least of our problems.

unomyname said...

I'm waiting - has the dam planet been monetized yet - OR NOT? You all know the prime directive - now get to it!

Hitler's toe jam said...

Welcome to the Socialist States of America where we set the price by buying your cdo debt to keep the party going

A very warm welcome from Ben Berstalinske

Anonymous said...

When do the locusts arrive. I dont see any locusts eating the biofuel crops yet.

Anonymous said...

Anonymous said...

Wasn't everything supposed to be perfect once the Dems came to power? What happened?

__________

8 years versus 4 months....I report, you decide....

8 previous years of deregulated, neo-libertarian/ Holier than thou neo-conservatives trying to 'bleed the beast' as brainiac Karl Rove tried to do.

8 years of strictly Republican control of all 3 branches of government that resulted in where we are now.

But you know what - it's not Democrat or Republican. They're both corrupt. The only way we can get rid of the corrupting influence of money on our republic is to move to publicly-funded elections.

Oh - and remove the ability of corporations to have lobbyists. Corporations are NOT people, and should have NO say in how our nation is run.

Anonymous said...

gold and silver eagles

RE Investor said...

Anonymous said... "It isn't 1929 Mr Drama Kings. It's somehwere in between 1987 and 1997. Markets are crashing..a whole 5% from peak!!!

Geez get some perspective. OOOOHHH dow is down 400. Yea from 14700. This isn't 1987 when it fell 500 from 2000.

You guys are worse than the MSM with your hysteria. "

You know I rememeber hearing people say that about the whole sub prime thing as well. I am a RE investor, and have property - which I am not proud of, but since I bought low, I am only losing what I call "Bubble Money" anyway. I have good tenants, and never intend to "flip". I suspect that when the bulk of the mortgages reset in October and November, that is when the fun really begins. I am waiting until the blood gets thick, and then taking my cash and buying good stuff cheap. Stocks, Houses etc. Finally the mortgage companies will be forced to work with borrowers and not just throw them out. BTW, the DOW was NEVER at 14700, it peaked at 14000 at the beginning of July - I know, I had money in it, and remember that at the time I should have sold, but oh well, I have made some back on the dips since....And I do believe that the Chinese are going to come in, and they will be a lot of peoples new landlords in the coming years.

bozonian said...

Personally I think there is no good news on the horizon.

The form of the destructor was a surprise to me, even though the general tide of things was always that people would lose their homes and the economy would suffer, I did not specifically predict the mortgage security freeze up.

Let's ponder the possibilities. Let us, as they say, "Choose the form of the destructor":

1) China, tired of being harassed about its currency and ripped off (500 million loss in its Blackstone investment) decides to dump dollars as fast as possible right after the summer Olympics. It moves these dollars into non U.S. assets like European oil companies or other far eastern, dependable investments. What happens?

2) Congress declares a moratorium on mortgage payments, letting anyone who is distressed (yeah, define that) not have to pay their mortgage. What effect will that have on lenders who now have to look at their money being essentially confiscated by losers?

and so forth. I'd really like to get a survey of the possibilities.

Anonymous said...

Important information that is missing from the reports.

How much value did the FED allow these CDO owners to price their mortgage debt at, the full face value?

Anonymous said...

Another missing piece of information from the news.

The FED at any time can be borrowed from (sorry about trailing preposition). Why didn't these insolvent entities do that? Why the big announcement?

Might be this: Though you can borrow from the FED, it wants collateral. These places only had the mortgage junk as collateral. Ooops. That means the FED accepted potentially worthless securities as collateral. Didn't these places have buildings? Real estate? Just exactly who are these entities that the FED bailed out?

You see, all this missing information tells me that the "man behind the curtain" is still not playing squarely. Investors are still being lied to as someone tries to clean up the scene of the crime.

Big Ben got the call late at night. Either do as he's told by his masters or he'll get an offer he can't refuse. Same old crap. Nothing will change unless there's a revolution.