The ability of Americans to; buy crap, borrow, eat and not read books astonishes me.
If you bet with the American consumer, you might be wrong twice in your life.

Agreed that it may have more to do with rests than MEW

Newbie question: what is BEA?

BEA = Bureau of Economic Analysis, part of the Department of Commerce --- BEA data

ys wayne- "I don't trust anything that comes out of the mouth anyone who speaks for the Federal Government. I have witnessed to much to believe in fairy tales."

ys wayne, like dotcommunist, is my kind of guy.

Kett82,
That makes 2 of us dummies.

The real story this week is the crashing credit markets, not housing or stocks (though they're the primary suspects in the matter). This will change everything if it doesn't stop.

High-yield corporate debt is a good example:

Junk Bond Crash

Weekend transition material:

Mr. Quincy Magoo is a cartoon character created by John Hubley in 1949...Voiced by Jim Backus (also famed in popular culture for his role as Thurston Howell III in the 1960s sitcom Gilligan's Island), Quincy Magoo is a wealthy, short-statured retiree who gets into a series of sticky situations as a result of his nearsightedness, compounded by his stubborn refusal to admit the problem. Affected people (or animals) consequently tend to think that he is a lunatic, rather than just being near-sighted.

Speaking with reporters after meeting with his economic team, Mr. Bush urged the American people to "take a good look at this economy of ours. Job growth has been strong, and that is what you would expect when our economy is strong and resilient and flexible. People [are] working, [the] unemployment rate is down, wages are increasing," he said. The president credited America's free enterprise system...

Ahhhh... check this out. This is important. This Randall Forsyth guy from Barron's really knows what's going on, and gets to the core of what matters in this whole mess:

Cunningham of State Street likens Thursday's rout to the Long Term Capital Management crisis of 1998, when the collapse of that hedge fund caused the capital markets to seize up, even while the economy was in relatively good shape. At the behest of the Federal Reserve, the major banks and brokers arranged a bailout of LTCM. The Fed helped out by cutting its short-term interest rate target, even as growth was humming along.

That's had two consequences: The cheap money inflated the housing bubble, which is now deflating with noxious effects. And it increases moral hazard -- the tendency of market participants to take on risk with impunity with the knowledge that they won't suffer the consequences if there's a bust. The expected Fed easing in reaction to any market setback is their Get Out of Jail Free card.

We keep trying to take the easy way out. And that just makes things worse and worse and worse.

Will Bernanke Bail Out This Credit Meltdown?

please donate if you have the means to the ML-implode legal costs

why, when the proprietor has enough money to throw at Casey Serin?

As for the ~$200B/qtr rise in mortgage debt . . . TMK this is new, hot-off-the-press money that is flooding into the money supply, right? IOW, how much of it is secured with hard cash from the MBS guys or lenders' cash reserve vs. how much of it is plain inflation of M1?

Because it seems to me that this mortgage money pipe into the economy is a bigger economic feeder than the ~$400B/yr federal deficit. . .

please donate if you have the means to >>the ML-implode legal costs

why, when the proprietor has enough >>money to throw at Casey Serin?

Yup, what Troy said..

Anybody doing biz with Casey Serin or using that miserable story of his encased in the infamous url - raises my hackles. I'd need a lot of clarification before I'd consider a donation.

-K

Hidden U.S. subprime losses may mirror Japan bank crisis

I recall that Japanese banks did "mark to model/wishing price" and hung onto their NPL (non-performing loans) far too long -- i.e., they were left holding the bag (some hid their bags in their overseas subsidiaries and eventually got caught).

"Indices are up in after hours trading. Thoughts, anyone?"

Sell any rally if you are an investor and not a speculator. This is going to be fun. I love this game.

Fred said: "...That leaves stocks, bonds and home equity to spend. Most people have more home equity than liquid assets. If one looks at the amount of home equity, it is huge!..."

Tell me about it. It's a little embarrassing, actually. I'm not even in an area prone to "bubbles" and my home equity has expanded far out of scale to my typical spending habits. It's pretty amazing.

Yet I have no reason to sell. Even if I had an unsolicited offer to buy my home at a 10% premium over comparables, I wouldn't sell because my monthly mortgage payment is actually lower than what rent would be for a similar house.

The power of long-term buy-and-hold, I guess.

Sebastian
(owner of the only home in America that's appreciating in value)