tag:blogger.com,1999:blog-18675105.post5142784599333800132..comments2023-12-30T10:06:37.450+00:00Comments on HousingPANIC - The Housing Bubble Blog with an Attitude Problem, 2005 - 2008: Why is the Dow up even after the CDO blowup? Here's some ideas, add yoursbloggerhttp://www.blogger.com/profile/06585266242070350399noreply@blogger.comBlogger45125tag:blogger.com,1999:blog-18675105.post-79904138766650600942007-07-16T23:49:00.000+01:002007-07-16T23:49:00.000+01:00"I don't see the prices of imported goods increasi..."I don't see the prices of imported goods increasing at all, do you?"<BR/><BR/>-------------------<BR/><BR/>Huh?? Do you buy food? How about energy? Or are you talking about the crap at WalMart that the Chinese are dumping on the US in order to (finish) destoying our industrial base?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-18820681632308228812007-07-16T23:47:00.000+01:002007-07-16T23:47:00.000+01:00"Inflation is complicated, probably too complicate..."Inflation is complicated, probably too complicated for a site like this."<BR/><BR/>-----------------<BR/><BR/>When the supply of "money" goes up faster than the supply of actual goods and services available for purchase, prices rise. How complicated is that? Doh.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-59791770329605787192007-07-15T02:30:00.000+01:002007-07-15T02:30:00.000+01:00*******************************wait until all thos...*******************************<BR/>wait until all those piles of money from real estate and stock gains over the past 20 years finds their way to gold.<BR/><BR/>it's going to be unbelieveable.<BR/><BR/>............as the herd takes this far beyond all our imaginations!<BR/><BR/> Care to expound on or clarify ?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-44501643308389243262007-07-14T23:53:00.000+01:002007-07-14T23:53:00.000+01:00"I don't see the prices of imported goods increasi..."I don't see the prices of imported goods increasing at all, do you?"<BR/><BR/>Dude, you are either extremely short-sighted or guessing.<BR/><BR/>Imported stuff has gone up big time.<BR/>And as the $ tanks, will keep going.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-17497520402376291712007-07-14T22:47:00.000+01:002007-07-14T22:47:00.000+01:00I think the main story here is that there is still...I think the main story here is that there is still a profoundly irresponsible amount of liquidity around the world and it has to go somewhere. Interest rates are still below what I believe is the real inflation rate and as long as that persists, the stock market will be fine. <BR/><BR/>I'm also starting to wonder about housing prices and how far they will actually fall. I've been believing they were grossly overvalued since 2001, but now I'm starting to think that the housing market is just pricing in the reality that the real purchasing power of the dollar has fallen by 40-50% over the past 5 years and that as long as interest rates stay within 100 bp of where they are today that the market probably isn't going to tank horribly.<BR/><BR/>who knows?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-39856746665881196192007-07-14T15:57:00.000+01:002007-07-14T15:57:00.000+01:00You all realize the SEC has proposed new rules for...You all realize the SEC has proposed new rules for short sales? The new rules eliminate the need for an "uptick" before a stock can be shorted, and the minimum share prices are also waived. After a 90 day comment period, the rules take effect in September...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-24931587147114773562007-07-14T15:26:00.000+01:002007-07-14T15:26:00.000+01:00Here is a good article explaining what I am trying...Here is a good article explaining what I am trying to say about the reporting of M3.<BR/><BR/>http://www.ft.com/cms/s/b02005aa-2efa-11dc-b9b7-0000779fd2ac.htmlAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-70834933723952015282007-07-14T15:07:00.000+01:002007-07-14T15:07:00.000+01:00I think the point you make about the inflation in ...I think the point you make about the inflation in the dollar causing people to leave this assets for stocks isn't quite true.<BR/><BR/>The plunging exchange rates do defiinitely mean that if you are a foreign investor, you have dollars and one day plan on converting them back to the pound, for example, you're getting hosed. But for the average american who doesn't exchange money how does the exchange rate affect them?<BR/><BR/>I don't see the prices of imported goods increasing at all, do you?<BR/><BR/>There are a lot of deflationary forces out there as well too. Especially housing, and credit which is more difficult to obtain now. And the whole argument about the Fed and M3 is off too. We have a fractional reserve banking system, the measure of M3 isn't direct because of this.<BR/><BR/>I think it's a complicated subject, and for some reason people here just assume everyone is out to screw them over and the Fed is working for wallstreet. Why? I'm no fan of Bernanke, but what does he have to do with wallstreet, he was an academic his whole career.<BR/><BR/>Inflation is complicated, probably too complicated for a site like this.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-86581282375486176282007-07-14T10:25:00.000+01:002007-07-14T10:25:00.000+01:00wait until all those piles of money from real esta...wait until all those piles of money from real estate and stock gains over the past 20 years finds their way to gold.<BR/><BR/>it's going to be unbelievable.<BR/><BR/>i just pray the contrarian in me can hold on long enough as the herd takes this far beyond all our imaginations.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-25489701248850887102007-07-14T06:48:00.000+01:002007-07-14T06:48:00.000+01:00Margine debt.NEW YORK | Investors are borrowing at...Margine debt.<BR/><BR/>NEW YORK | Investors are borrowing at a record pace to sink into the stock market, and the trend is raising concerns on Wall Street about what might happen if a major correction occurs.<BR/><BR/>The amount of margin debt, which is how brokers define this kind of borrowing, hit a record $285.6 billion in January on the New York Stock Exchange. Such a robust appetite, amid a backdrop of complacent market conditions, could leave investors badly exposed if major indexes are snagged by a market decline. Some could find themselves forced to sell stock or other assets to meet what's known as a margin call -- when a broker in effect calls in the loan.<BR/><BR/>Bulls and bears can continue to debate the direction the markets will take in 2007. But, one fact remains: The last time margin debt hit this level was at the height of the dot-com boom in March 2000, just ahead of a two-year decline.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-90263788052218468262007-07-14T06:12:00.000+01:002007-07-14T06:12:00.000+01:00Watch out for the sucker rally!!! Money managers ...Watch out for the sucker rally!!! Money managers and traders know the price of a derivative collapse. These guys know how to pump and dump really well. <BR/><BR/>Go short and be prepared for a major decline in indexes. The key is margin calls for hedge funds which may begin within weeks depending on how quickly the credit downgrades happen.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-31192795441378002282007-07-14T05:37:00.000+01:002007-07-14T05:37:00.000+01:00If the housing market continues to tank but the st...If the housing market continues to tank but the stock market doesn't follow accordingly, at some point, people who still have money (i.e. large corporations, governments, banks, the very rich) will have to buy up pieces of failed, liquidated real estate in order to stem the tide of wider market devastation. <BR/><BR/>The trouble is, when this real estate is at its cheapest, it will still be a poor investment. To make such an investment would run contrary to sensible short term practice to be sure. <BR/><BR/>Real estate is a ladder. How do you remove the bottom rung and still climb the wall?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-49883138281727841332007-07-14T05:08:00.000+01:002007-07-14T05:08:00.000+01:00"No one knows who owns all that bad paper...and tw..."No one knows who owns all that bad paper...and two-thirds of that is overseas"<BR/><BR/>Now that he puts it that way...Why did we see such huge, world-wide fluctuations in the stock market recently in light of relatively minor increases in consumer spending month-to-month? Shouldn't all of those little people be irrelevant? <BR/><BR/>Cramer's faith in the derivatives market to absorb all of this carnage is like religious fanaticism. <BR/><BR/>People can still count, Jim! Even overseas! Of course, someone knows who owns all of that paper! Their enemies probably know. <BR/><BR/>God help us if the Nick Leeson's of the world have derivatives at work on huge chunks of this "bad paper".<BR/><BR/>And God help us if as much of that $500 Billion is as concentrated in California as we all fear it is.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-17858876931577004132007-07-14T04:56:00.000+01:002007-07-14T04:56:00.000+01:00Stocks are a basket that catches newly printed fed...Stocks are a basket that catches newly printed federal reserve money. Bernanke and cohorts are desperately trying to give free money to the public by buying stocks and long bonds -in order to bail out housing.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-1519995181087006782007-07-14T04:18:00.000+01:002007-07-14T04:18:00.000+01:00I liked all your reasons except the declining doll...I liked all your reasons except the declining dollar explanation. It doesn't matter if you own US stocks or hold US dollars. In order for a foreign investor to buy US stocks, he/she must first convert their currency to dollars. Since you are now holding US stocks bought with US dollars, you want the dollar to STRENGTHEN. This way once you sell your investment and get US dollars you can repurchase more of your nation's currency.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-41561584088136071792007-07-14T04:07:00.000+01:002007-07-14T04:07:00.000+01:00Keith, now I know they are desperate and ballsy at...Keith, now I know they are desperate and ballsy at the same time. <BR/><BR/>From Bloomberg: <BR/><BR/>U.S. Urges China to Buy Mortgage-Backed Securities (Update2) <BR/><BR/>By Josephine Lau<BR/><BR/>July 13 (Bloomberg) -- The Bush administration is urging China's central bank to buy more government-backed mortgage bonds in an effort to sustain financing for U.S. home loans. <BR/><BR/>U.S. Department of Housing and Urban Development Secretary Alphonso Jackson is in Beijing to persuade the Chinese central bank to buy more securities from Ginnie Mae, a corporation under HUD that guarantees $417 billion in federally insured, fixed-rate mortgages. <BR/><BR/>``It's not a matter of whether they're going to do more business in mortgage-backed securities,'' Jackson told reporters in Beijing. ``It's who they're going to do business with.'' <BR/><BR/>HUD aims to tap China's $1.33 trillion of foreign-currency reserves, the world's largest, after surging defaults on subprime mortgages caused the near-collapse last month of two hedge funds run by Bear Stearns Cos. <BR/><BR/>Moody's Investors Service on July 10 cut its ratings on $5.2 billion of bonds backed by subprime mortgages, which are loans taken by borrowers with poor or limited credit histories. Standard & Poor's yesterday downgraded $6.39 billion of such bonds. Fitch Ratings said it may lower ratings on $7.1 billion. <BR/><BR/>Ginnie Mae is ``in a better position than most'' to offer mortgage products because, unlike Fannie Mae and Freddie Mac, it provides the full backing of the U.S. government, Jackson said. Mortgage securities offer China's central bank better returns than U.S. Treasury bonds at the same level of credit risk, he said. China held $414 billion in U.S. Treasuries as of April, according to data compiled by Bloomberg. <BR/><BR/>Jackson met with central bank Governor Zhou Xiaochuan and Minister of Construction Wang Guangtao in the nation's capital this week. Central bank spokesman Li Chao couldn't be reached for comment. <BR/><BR/>Commercial Banks <BR/><BR/>China has approved the creation of a new agency that will manage about $200 billion of its foreign exchange reserves, as the government seeks to boost returns from its holdings. <BR/><BR/>The nation held $107.5 billion in U.S. mortgage-backed securities as of June 2006, up from $3 billion three years earlier, according to HUD's Web site. The figures include securities offered by Ginnie Mae, Fannie Mae and Freddie Mac, HUD said, without detailing the holdings in each agency. <BR/><BR/>``China's bought some mortgage-backed securities from us, but not in great numbers,'' Jackson said, without providing a target for future purchases. <BR/><BR/>HUD also plans to approach Chinese commercial banks such as China Construction Bank Corp. and ask them to buy government- backed mortgage securities, Jackson said. <BR/><BR/>The housing department wants to sign a memorandum of understanding with construction minister Wang when he visits the U.S. in August, Jackson said without elaborating. The two nations face similar challenges in providing affordable housing to average citizens, he said.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-52770302526296392452007-07-14T03:27:00.000+01:002007-07-14T03:27:00.000+01:00Keith, congrats on your puts, looks like you made ...Keith, congrats on your puts, looks like you made some nice profit off the backs of the homies. <BR/><BR/>What do you think, is there still an opportunity on the short side for some of these turkeys? I'm wary of wading in, but I can easily see another leg down once the short squeeze and bogus takeover rumors (Buffett, yeah right) subside.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-90526825690038506212007-07-14T03:04:00.000+01:002007-07-14T03:04:00.000+01:00IPT.V, OEX.V, NAU.V, NOC.TO, FRI.V, FR.V, EPL.V, S...IPT.V, OEX.V, NAU.V, NOC.TO, FRI.V, FR.V, EPL.V, SAH.V, GRT.V, SLG.V, TRX.V, HAT.V<BR/>EPZ.V CGT.V AMM.TO LYSCF.PK<BR/><BR/>In my IB IRA and spec accounts. I'm 10% cash (CAD). Guys, this move is gonna be huge.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-71662039567312851852007-07-14T02:58:00.000+01:002007-07-14T02:58:00.000+01:00If you have extra cash, the oil patch looks to be ...If you have extra cash, the oil patch looks to be a slam dunk right now. I've held COP (conoco) and CVX (chevron) for quite some time and in the past month they've simply exploded. COP is up sharply because the company announced a huge buyback ($15 billion), but CVX is just floating up and up and up.<BR/><BR/>I think that a lot of folks recently tumbled to the fact that India and China's pent-up demand for oil probably exceeds what the world can produce.<BR/><BR/>T. Boone Pickens says that oil will hit <A HREF="http://dallas.bizjournals.com/dallas/stories/2007/07/09/daily43.html?jst=b_ln_hl" REL="nofollow">$80 per barrel on or before next May</A>. I contend that companies in the oil patch can virtually print money. On the flip side, consumer retail will not tolerate a steep gas price hike (say, to $4/gallon).<BR/><BR/>CVX has PE of 11.4, COP's PE is 9.56 ! Damn.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-2448364379498354372007-07-14T02:42:00.000+01:002007-07-14T02:42:00.000+01:00I keep reading that "money" is just coming full ci...I keep reading that "money" is just coming full circle,back to Wall street.This would be ok if money were just going from one place to another(Loser to winner).We still have the money in the system to be reinvested etc.<BR/> Thats the big problem now.There was no money in the first place.These investments had phony valuations,some were completely worthless.No money can come back to anyone.<BR/> In order to get things square with investors,someone will have to come up with the money.Right?WTF?<BR/> I love a good mystery,and fiery crash scenes are a must.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-22378743437618640692007-07-14T02:30:00.000+01:002007-07-14T02:30:00.000+01:00Keith your US centric subprime mindset is blindin...Keith your US centric subprime mindset is blinding you to broader global view. The real bagholders (Asian central banks etc.) are diversifying away from AAA rated papers and finding stocks better proposition than money losing AAAs. No one can say for sure how long the DOW rally may continue. But not riding the trend will be regrettable.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-10850649723723140812007-07-14T01:32:00.000+01:002007-07-14T01:32:00.000+01:00After reading the posts,I would conclude that The ...After reading the posts,I would conclude that The middle class ,and lower classes would do well to stay out of the Stock markets.They are blind as to what the intentions of the big players are,as are all of us too.Nobody really seems to know.<BR/> If you paid your home off early instead of handing it over (401k),I think you would be better off.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-91670189811185776152007-07-14T01:24:00.000+01:002007-07-14T01:24:00.000+01:00They have more fleecing to do Keith. The regular J...They have more fleecing to do Keith. The regular Joe hasn't participated in this market because folks are still smarting from the market meltdown of 2000. <BR/><BR/>Lure them in with 14,000...15,000 on the INDU, and you can sell these poor suckers all your winners that are about to tank and become real turds.<BR/><BR/>Also, I have seen figures that indicate those folks that are in the market are in overseas markets or foreign ETFs, and who the Hell can blame them with the $ sitting at 80.39 against a basket of currencies.<BR/><BR/>It's also a damn good thing "core" inflation is so low because everything else is going through the roof. Nice job Heli-Ben.<BR/><BR/>Ingredient input prices – annual % change (estimates)<BR/><BR/>Milk: + 65.4%<BR/><BR/>Corn: + 39.7%<BR/><BR/>Barley: + 41.7%<BR/><BR/>Palm oil: + 24.9%<BR/><BR/>Soya oil: + 30.4%<BR/><BR/>Oats: + 20.7%<BR/><BR/>Wheat: + 24.2%<BR/><BR/>Soya beans: + 28.5%<BR/><BR/>Cocoa: + 23.6%<BR/><BR/>Tea: + 8.4%<BR/><BR/>All ingredients: + 14%<BR/><BR/><BR/>(Source: Lehman Brothers)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-67011087997909917062007-07-14T00:29:00.000+01:002007-07-14T00:29:00.000+01:00Defensive. Mostly in ultrashort ETF's chosen caref...Defensive. Mostly in ultrashort ETF's chosen carefully like SRS which should continue to make me money even if the Dow screams higher. Some Hussman, some metals, some foreign equity funds.<BR/><BR/>We all know the fundamentals suck....the last moves up attributed to stuff like short squeezes and share buybacks, not anything economically positive. But yet we go higher.<BR/><BR/>However I am finally seeing the sign I was waiting for - lots of bears capitulating and saying the market could go higher for some time.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-28559477012180738612007-07-14T00:07:00.000+01:002007-07-14T00:07:00.000+01:00This looks like a "speculative blowoff" that prece...This looks like a "speculative blowoff" that precedes the credit crunch.Anonymousnoreply@blogger.com