the ole blame it on the weather reason. Funny how the weather never enters the discussion when sales are above expectations eh...

sorry OT but i just had a heart attack.

latest DC numbers are out :

YOY for Sept:

Total dollar volume: -37%
Avg sold price: -3.65%
Median sold price: -17.58%
Total units sold: -34.61%

inventory clearing ratio: 8.39 months
(last seven months it had been below 5)

The market so far still seems to be interpreting all news in a positive light, with Walmart especially strong.

There's a lot of over the top bullishness out there...

It has nothing to do with good or bad news, bullishness, etc.

What's happening now is that we have a large segment of the financial industry that exists solely by driving asset prices up and borrowing against the appreciation to drive asset prices even higher. This is precisely what happened in housing and the related credit markets, now hedge funds are being forced to move to other markets.

What's important to understand is that asset prices MUST go higher for these businesses remain in operation (because that's the only way they can pay the interest on their existing debt), and so they will do what ever it takes to drive prices higher -- their life depends on it.

As long as the Fed provides the liquidity, the speculative finance industry will recycle it into higher and higher asset prices. The economy be damned.

This is the same phenomenon we saw in the 1929.

What worries me is that then there was a largely fixed money supply (since it was backed by gold), which we don't have now. I think it's conceivable that if the Fed remains cooperative, there's really no limit on how high asset prices can be leveraged.

ac

i understand your theory and its not an unreasonable one. its just not one i want to bet on. if corporate profits (true profits, not financially engineered share buybacks) increased in tandem with share prices then i would agree. but we're now seeing estimates of little to no earnings growth. PEG ratios are over 8 (usually 1-2) currently and may shoot higher depending on how bad earnings turn out to be. even a pigman should pause with those figures. i think there are enough other pigmen who will bet against them since you can also make money shorting. much of what i say applies to US domestic stocks.

ac

i understand your theory and its not an unreasonable one. its just not one i want to bet on. if corporate profits (true profits, not financially engineered share buybacks) increased in tandem with share prices then i would agree. but we're now seeing estimates of little to no earnings growth. PEG ratios are over 8 (usually 1-2) currently and may shoot higher depending on how bad earnings turn out to be. even a pigman should pause with those figures. i think there are enough other pigmen who will bet against them since you can also make money shorting. much of what i say applies to US domestic stocks.

Well, stock trading now is heavily dominated by the hedge fund industry, and their primary interest is not earnings, but developing further collateral to borrow against.

Remember, the hedge fund managers ultimately don't care if the stocks go bust - they're gambling their clients' money, not theirs. Their concern is simply collecting fees for as long as possible on the greatest gains possibl.e.

The question is ultimately what comes along to stop all this, and when.

If negative earnings scare too many investors out of the market it could collapse, but I'm not convinced yet.

The system is fragile, though. It could be something as simple as a prominent article calling the industry out that causes the market to collapse. Those things are impossible to predict, though.

Countrywide cuts nearly 5,000 jobs as lendings slide
Countrywide slashes jobs as bad loans rise
| Reuters

Barley, no. The retail sales reports and the industry reports are all in nominal dollars. So yes, those increases you see reported are distorted when prices increase or decrease significantly.

MOM:
we have ONE LAST RESIDENTIAL UNIT to sell and our pipeline is FREE AND CLEAR of residential units. we made that decision 18 months ago and its almost done. yeah!

confused:
my data is the raw data spewed out by the MRIS here. it may be dirty but i'm using the same data for 10 years+ now.

CFC>"Delinquencies as a percentage of loans serviced rose to 5.87 percent in September from 5.05 percent in August and 4.50 percent in September 2006."

So who knows what is the long term norm od delinquencies? I thought it was 2.06% for budget/risk purposes.

CFC

Lets review managemnts's current outlook on their business:
10-Oct-07 MOZILO ANGELO R
Officer 139,918 Direct Option Exercise at $9.94 per share. $1,390,784
10-Oct-07 MOZILO ANGELO R
Officer 139,918 Direct Automatic Sale at $18.74 per share. $2,622,063
9-Oct-07 MOZILO ANGELO R
Officer 139,918 Direct Option Exercise at $9.94 per share. $1,390,784
9-Oct-07 MOZILO ANGELO R
Officer 139,918 Direct Automatic Sale at $19.87 per share. $2,780,170
8-Oct-07 MOZILO ANGELO R
Officer 139,918 Direct Option Exercise at $9.94 per share. $1,390,784
8-Oct-07 MOZILO ANGELO R
Officer 139,918 Direct Automatic Sale at $20.14 per share. $2,817,948

I wonder about the corporate spirit..."Yippie my boss just made another cool $9M...I gotta go sign the allegence letter again and now I will a second matching wrist band!"

What's important to understand is that asset prices MUST go higher for these businesses remain in operation (because that's the only way they can pay the interest on their existing debt), and so they will do what ever it takes to drive prices higher -- their life depends on it.

If by "these businesses" you mean hedge funds, the statement isn't true. Hedge funds have always been far less long and dependent on appreciation than other types of asset managers (e.g., mutual funds). The curiosity is why hedge funds have been so bullish lately.

I wouldn't count on it continuing. There's huge amounts of money that hedge funds know they can make on the downside, at the right time. I think they know that time is coming and are just waiting to pull the trigger. A couple of sharp spikes up, followed by a giant spike down, is made to order for hedge funds. They have great hubris in their ability to shift in time. And many of them probably will.

DC1000 we have ONE LAST RESIDENTIAL UNIT to sell and our pipeline is FREE AND CLEAR of residential units. we made that decision 18 months ago and its almost done. yeah!

Very glad to hear it. So I guess we won't hear you talking about "Perfect Storms" and "economic shocks" on the tube or read your doleful comments in WaPo, eh? Every storm is a perfect storm if you never bother to check the weather forecasts! The only thing you can do is get out of the way of these things.

Commercial retail is shaping up to head the same way with a lag, and office space is overbuilt already in some areas. Specifically about the DC area, I know a couple of people who work for companies in the area. The companies are cutting or holding expenses, so I think DC will not be immune. Still some startups, though!