Who gave the ALL-CLEAR to go in 100% leveraged long ? Was it BHO ?

thats the phase i was trying to remember....

jg are you being sarcastic? BTW i didnt make it to that Tea Party last week. How was it?

I was in bird rock two weeks ago a the pizza place and there was an older gentleman talking about the right to bear arms. Couldnt help but think it was you....

The double hump pattern, again!

Interesting chart in that article. I do not see capitulation in the 2008 numbers.

and the debt included is only the publicly held debt - not the total debt (table L4 line 3)

AS check out that link from Dirk. Its fugly (and pretty similar to what you're talking about)

Cheers!

Got a link? TIA

Good thing I shut down my SRS this AM. Savage rally. Could wipe a few stubborn bears out so they'll be unable fight another day (after SPX800).

I had 2 closings yesterday. Didn't make much money,
because I was only there to hold the buyer's hands.

But both were excruciating because the REO sellers don't know what they are doing.

Heard one piece of good news from a realtor--who actually was very good and very smart and worked very
hard--that in one area in South Dade, there is a price sweet spot in the 200-260k range where REOs are actually being bid up. First good news I've heard in over a year and a half. Don't know if it can last.

"Slave to the rhythm" turns out to be a profound observation. Thanks, Grace.

I'm hoping we hit bottom first here in Florida liz. I know we've been feeling the pain here since way before they say the recession started so maybe we can pull out of it first. I'm seeing more jobs in the paper as well now. I'm still far from an optimist but at least it's a small glimmer of hope...

Also, Spring Break is booming here right now, apparently Mexico's troubles have helped the local industry. I really thought SB would be a fizzle this year but from what I've seen it's not.

ades writes to jg:
BTW i didnt make it to that Tea Party last week. How was it?
Ditto that, how was it?

Hah, boomers wouldn't have saved more anyhow.

Given what has happened, I'm glad I didnt' save more.

Have the house paid for; don't owe much on CCs etc.

any one have color on the Juluious Bear gold fund redeemable in gold? comments, thoughts?

We all feel poorer now!

I would argue that the first chart showing large drops after both the dot-com and housing bubbles affected very different groups of people. The dot-com bust hit a relatively small group of people (dot-com "millionaires" paid in options and market investors) very hard while the housing bust is hitting everyone who "owns" a home, whether mortgaged or not.

The impact of the latter is much broader and hits directly at consumer spending.

But...but...Kudlow said I was doing great...with the stock market and all...

Whitney (Mike) has another good article up over at CP, echoing MP regarding bondholders, and referencing the same SFC article eluded to yesterday - Barry Eichengreen, San Francisco Chronicle: "We must keep Trade from falling off a cliff".

Mike Whitney: Haircut Time for Bondholders

[brilliant solution by our political masters - simply lower the capital requirements for the banks]

Anyone not fully expecting this ahead of the stress tests was delusional. It's a requirement if the goal of the government officials is to keep the insolvent financials operating. And the goal has been repeated.

Proving - If you control the rules and the referees, the outcome of the game is more easily controlled.

>737 ... ^ we go!

Gold to 1200 by the end of the year.

Why are we still using language like "homeowners were extracting equity from their homes"?
Borrowed money is still borrowed money, regardless of what your chosen asset pledged as coloateral, is worth. ...or in this case, what the lender said it was worth. The game is over, the scam exposed but we continue to use the deceptive jargon, coined by all the Dr. Feelgoods of the industry.
On the other hand, my brand new car has fallen in value faster than I am paying it down. Maybe I should just walk away... Clearly there is no opportunity to "manage my equity."

@guest
"Why are we still using language like "homeowners were extracting equity from their homes"?
Borrowed money is still borrowed money, regardless of what your chosen asset pledged as coloateral, is worth. ...or in this case, what the lender said it was worth. The game is over, the scam exposed but we continue to use the deceptive jargon, coined by all the Dr. Feelgoods of the industry.
On the other hand, my brand new car has fallen in value faster than I am paying it down. Maybe I should just walk away... Clearly there is no opportunity to "manage my equity."

I've said before that this ends when a house is a place you live...not an "investment" for three years down the line...or an equity ATM...or anything even remotely related to that.

"Gold to 1200 by the end of the year."

why not go on margin and buy some then...it'll be fun to watch bank-XYZ buy up your contracts as you sell em later

Nades,

I've read the report that you referenced.

I see income inequality as one of our biggest problems. And it's now clear to almost everyone that just because someone has $$$ it doesn't mean they earned it. The reality during the Greenspan era is that wealth was primarily attained via fraud and financial shenanigans.

Unearned income! How did they sell that sham? Those that could sell themselves, were allowed and encouraged to sell shams.

For many reasons, the tide turned against the majority when the we left the gold standard. One of the biggest reasomns imo - the lack of a gold standard allowed the government to grow and grow. They key to wealth shifted from capitalism to cronyism.

Historical Income Tables - Households

Guest wrote "Despite being a renter, I feel like I won the lottery. Stayed away from RE during the bubble and jumped out of equities in mid 07. I don't have much but at least I have something. After having to eat the boomer's leavings for decades, this is sweet."

This is not a catastrophe caused by a particular generation. You're projecting blame onto the wrong group.

Unearned income! How did they sell that sham?

Angry, I'm not sure how you have capital markets participants without it?

Oh, DO EXPLAIN!

Was this slide due to inflation? The economy grew faster for much of that time as did inflation, making bank accounts effectively shrink, and there was the incentive to spend versus hold cash, since it was worth more if you spent it now rather than waiting.

Hey Zuzu, good going. Congratulations. Chase, on the other hand, refused to close my parent's credit card 5 years ago when I called to advise them of his death. Still sends an annual statement reflecting zero activity.

Shorting Apple here. Student loan money drying up and tuition going higher. college kids back to schoolers will get hit.

Oh, DO EXPLAIN!

Burnside,

I'm not against unearned income. I'm retired and all I live on is unearned income. My beef is that we keep raising taxes on damn near everything while lowering taxes on unearned income. To me that's counter productive and is a big reason we have turned into a casino eCONomy. Speculation and short termism is rewarded, while actual output is penalized. I'm not alone in this view. Warren Buffett has publicly expressed similar thoughts.

Just my two cents.

One more thing. Are you aware that prior to becoming Fed Chairman, Alan Greenspan headed a commission that oversaw an enormous fica tax increase. After the fica tax increase, capital gains and upper income tax rates were slashed - supposedly to increase investment. The results were not as advertised though I suspect the results were as intended.

I'm against cronyism, not anti capitalism.

I'm one who has long thought that the main reason so many people got into real estate speculation some years ago was because many of them could find no better job for their time. There haven't been enough good jobs widely dispersed in this country for many years and now things are getting worse rapidly.

It's a ..... SPACE JAM!

Thankyouthankyouthankyou. With one in university and another aspiring shortly we need you.

This fall I'll have two in school... one a freshman the other starting grad/professional school. Thank God they chose in-state state uni's. Even then they'll be taking out some loans... I make them have skin in the game even if I could pay the fare for them.

I was not in stocks (in any serious way) or real estate investment over the past several years, so my household net worth has not decreased over the past several years -- if you omit out the house, which I always have, even though it's paid for.

As for "speculation and short-termism being rewarded," I saw that starting in the '80s. The demand for high return outpaced what traditional manufacturing and service industries could provide, so the hot cash poured down other channels; and the old ones silted up for lack of us.

FWIW, I consider myself a dope. A proud BBAD! Want proof - I voted for Bush, TWICE! Case closed.

Definitely dopey behavior, but at least you're a reformed dope!

"
Before dissing AAPL on an education contraction theory toddle on down to any local college and see what is selling."

Yes, but are they always going to be able to demand that premium they now get? It's a beemer brand -- and I say that as a man with a household full of Macs. It has also relied heavily on the product-spec'ing skill of Steve Jobs, one (sick) man. They don't seem to have much of a bench -- Steve likes being worshipped.

I sold my Apple stock a couple of years ago and have no regrets.

"Why are we still using language like "homeowners were extracting equity from their homes"?"

That term was devised by the real estate industrial complex. It sounded better than "borrowing more, having higher payments, and hoping home prices don't drop".

Tim waiting for 2012 says:
Today, 2:28:07 PM
I don't see your point. College students buy Apple. Tuition and Student loan costs are increasing less money to buy Apple. Just a hedge don't take it personal.

Not to be Rob Dawg's constant foil, but, disagree.

Apple is capitalization for the long haul. As computers become more commoditized, the whole "repleace every 3 years" meme will be worn away by the removal of artificial affluence and the lack of any new capacity in the device.

Look at Apple products, they are a generation ahead of the rest of the world, routinely, in their user / hardware engineering. The days when they were kept afloat by Microsoft are long gone.

Ah, but they engineered alot!

The value of the homes owned by the 31% w/o mtg's is a bit lower than those with mtgs, so call it 25%. Even so, that means that the remaineder would have on avg. 43-25=18%. In the old days that would ahve meant that the avg could not even have been a first time homebuyer putting 20% down. The figure also includes those folks who are 29 years into a 30 year mortgage.

What happens to this number when someone who is seriously underwater, say at 130% LTV walks or gets foreclosed on? Seems to me like that would raise the ratio a bit.

AS, dont disagree, but was wondering if the walk aways were holding up that equity % graph, ie it might be even worse than shown. I am assuming in the 130% LTV walkway, you would say erase the $260k mtg, and the $200 house value, thus causing the equity % to rise for the rest of the population. Just wondering if that was the proper accounting for it.

OT, but too good not to share..our old friend, Maxine Waters, set up a meeting last year in which the CEO of a bank with ties to her family asked for 50 million in special bailout funds from the Treasury.

"Representative Maxine Waters, Democrat of California, requested the September meeting on behalf of executives at OneUnited, one of the nation’s largest black-owned banks. Ms. Water’s husband, Sidney Williams, had served on the bank’s board of directors until early last year and has owned at least $250,000 in stock in the institution."
A Representative, Her Ties and a Bank Meeting - NY Times

ice move, how soon are you planning to close them out?

I didn't expect this rally, indeed I thought March ought to be universally scarring.

So the S&P500 will reach around 760 and resume falling. Oil should fall below $40 in the next few weeks. IBM will have to disclose some ugly in one of the next 2 quarterly reports. Chrysler hasn't gone bankrupt yet. Just all kinds of fun coming up

I'd be more optimistic about each bout of our new found prosperity if every rally in stocks wasn't accompanied by an even bigger rally in the prices of oil and commodities.

Check out OIL & DJP.

GHathway. Ouch that's why I don't play with options.

I think we may have bottomed in oil and I think we close above 800 on the S&P by the end of the year. what happens from now til then is anyone's guess. I wouldn't be surprised to see the SP below 600 somewhere before Dec

Acording to the fact sheet on it thats 105%, not 150%.

c&c,
Do you think 6.5K was the bottom?

tia

I didn't "call" the depression, but I did agree with mp and others, I haven't changed my mind...yet. This is a bear market rally that everyone knew would come, it doesn't change the underlying rot one iota.

it's hilarious to read the justification rating agencies use with GE
"
GE has a strong line of industrial businesses, and we without qualification assume GE capital breaks even.
"

What about the 50-75% of earnings GE capital has contributed over recent years, what about the aggressive accounting they use, what about less than 3% of their books are marked to market, what about the decline in industrial customers (installed base of jet engines don't matter when those planes are going to be grounded), what about the glut of medical centres who can't pay their loans and the collateral you book at full value despite producing more inventory,.... as if credit cards aren't on pace for all time record charge offs

GE will get another downgrade within 6 months. The rating agencies don't look at the business, they just progressively cut ratings in the months preceding a default. If they were forward looking, that would be too much pressure

Killing the shorts is a necessary precondition for the next leg down.

If you guys are right about this after this week. I'll be a believer.