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Yeah, I'm keeping my finances lean and mean this year. '09 (hopefully) will see a turnaround in RE.
We shall see.
Things that will affect consumer spending this year:
Who thinks there won't be a recession this year?
I think anything besides consumption is a red herring. I think a lot of the strength in exports, for example, is in part a delayed reflection of strong US consumption and asset bubbles that have stirred up similar bubbles and consumption increases in foreign economies.
Given that US consumers have had a great deal of their wealth filched via asset bubbles (i.e. swapping real income for toilet paper), it's hard for me to be optimistic about consumption going forward.
--
No IFs and BUTs, I feel great about my recession call based on the ISM -- most likely began in Oct'07 but no later than Dec'07. Also, I am sure that CR will back down on his housing demand estimate before the year is out. Denial, in face of the evidence, doesn't last forever.
My View of the Current American System (just so that my comments are correctly understood)
Fish rots from the head. The US economy has been rotten from the very top led by three of the biggest evildoers in the world for the past twenty years Greenspan, G. W. Bush and Bernanke. These were, and still are, the front men for the rotten bankers and financiers, led by Goldchain Silverknife, and corporate crooks of America. Americans are bred to be dopes, with blind faith in the system, to support these men and the system that they rise thru.
There would have been no housing bubble and mortgage mess has it not been for the evil leaders. The sad part is that only evildoers can get to the top of power over the US economy. Evil occurs in many forms and the form that it took in the US is financial in nature. The worm has finally turned. So, the only possible outcome is the collapse of the system, I mean the political system that supports the evil exploitation of honest hardworking people (many of whom are dopes, though) by a group of parasites.
Happy New Year, everyone!
Jas
Conjure Bag was too bullish on the ISM.
No worries, per bubblevision "we are off the lows of the session"...LOL
At least I can admit, my recession call was too early. I told my brother that I expect that the US economy would be in recesion by 4th quarter 2007. Oh wait, the latest expansion numbers for the last quarter was below 50%. Perhaps I was not early. I expect some RE related depression areas in 2008.
No worries, per bubblevision "we are off the lows of the session"...LOL
We were really seeing some nice gearing in commodities and related foreign stocks this morning.
It would be a crying shame if this all got derailed by some silly economic concerns.
New year, same old problems.
Patience folks. The run up in asset prices didn't happen over-night and the downturn in asset prices won't happen over-night either.
Now is not the time to embrace risk.
Bloomberg- "Economists had expected the manufacturing gauge to fall to 50.5, according to the median of 69 forecasts in a Bloomberg News survey. Estimates ranged from 48.9 to 52."
Conjure Bag forecasted 48.9. He's comfortable with that. It works.
Conjure Bag stands by his August 2007 forecast: Recession Q1-08.
Conjure also stands by his November 22, 2007 statement: The bull market in equities is over.
OT: What is Conjure Bag's web site? So many on this blog reference it.
Thanks
Norbert Ore who directs the ISM survey says it is too early to Panic on manufacturing.
He points out that the manufacturing sector is only 12% of the economy.
ISM was a disaster today revealing that mfg. is now "officially" in contraction. It appears even the fudged numbers cannot keep the ship afloat any longer. Buy physical gold and silver to protect yourself. Gold is at a 27 year high today and is on the verge of breaking out as the U.S. of A continues to falter in 2008.
Fireworks
Newbie, Conjure Bag dosn't have a web site. Sorry.
All of these estimates and projections for a bottom in housing prices are too optimistic - they discount/ignore momentum completely.
We are headed for a crash of epic proportions.
To use a car-crash analogy, these predictions assume that when a car crashes, only the bumper will be dented - after all, that's what it's meant to do.
In reality, the bumper hits the grill, which is pushed into the engine (which breaks the mounting bolts), which breaches the fire wall and the passenger compartment, resulting in injured or dead passengers.
5 to 10%? Tighten your seat belt and get ready for the air bags to deploy. This is going to be a total wreck.
The bond/credit enhancement crash in Florida is a live and well, hope people are still watching that unfold!
I was a happier back when I was clueless about the economy, until I visited this blog back in August 2007 and got a heavy dose of "reality". I'm sorry to be a troll, but there's just too many "ifs" for 2008 than we have ever experienced before, like:
Thanks to all the commenters. Your contributions really helped enlightened folks like me.
Then how do we find Conjure Bag's mythical clock? He/she should start a web page!
Marcus,
Car owners have insurance for collisions, comp, injury and pay premiums, then the cars are fixed and sold to other rubes; same game in housing crash, i.e, lots of people will walk away unhurt, while lots of people end up 6 foot under.
Last year, the trouble in the mortgage market was largely confined to subprime loans extended to homeowners with weak credit. ...
If you substitute "A year ago" for "last year" there's alot of truth to this sentance. As it stands howeverm, by Q4 it should have been obvious that this had ceased to be a "subprime" crisis.
Marcus,
Car owners have insurance for collisions, comp, injury and pay premiums, then the cars are fixed and sold to other rubes; same game in housing crash, i.e, lots of people will walk away unhurt, while lots of people end up 6 foot under.
Anonymous | 01.02.08 - 11:05 am | #
Most car owners also have life insurance - but it doesn't benefit the insured.
The Conjure Clock now reads 11:58:59.
Conjure moved it back 1 second because Warren is now in the bond insurance business.
Bloomberg headline:
"Iowa Caucus Run-Up Finds Ron Paul Reading in Texas,..."
What a doofus! Bush never spent time reading and look what a winner he has been.
Such a drop could ripple out to the broader economy...
It amazes me that they keep using words like "could" when they know it's "will".
I mean, how often have you heard the expression "throwing a rock into the water could ripple out to the rest of the pond"? Nothing happens in a freakin' vacuum.
Its not just a housing bubble, its a massive credit bubble.
Transfering risk does not eliminate risk. Plus, it will become known that the risk was not truly transfered at all. Foolish lending to telecoms, housing, cre, private equity, hedge funds via leverage, auto loans, mew, credit cards.
Nothing new here. Same foolish lending, just different channels
Patience!
"Norbert Ore who directs the ISM survey says it is too early to Panic on manufacturing.
He points out that the manufacturing sector is only 12% of the economy."
Add that to the small slice the housing sector makes up, then add the slice that MEW makes up, and pretty soon you are talking about a good portion of the economy. Everything is contained if you don't look at anything together.
Then how do we find Conjure Bag's mythical clock? He/she should start a web page!
I'm a little busy right now--CR and I are working on a lot of up-front work on our newsletter, like where to put the path through the trees picture and important stuff--so I have less time than I wish for total fooling around. I have not, therefore, created a Conjure Clock in Excel yet. But I am sorely tempted to do so.
Of course, I don't know what a Conjure Clock looks like. Maybe mp has some time to waste . . . hint . . .
I think of mp as Sherry Lewis and Conjure Bag as Lambchop.
I could create a spread template for it with ease. I was think of creating something which would list the additions to and subtractions from the clock grouped by years underneath a big reading of the current time on the clock. You could then easily add events and there impact of the clock at then it would adjust based on your entries.
I would need to know a starting year and a starting time.
Flaminia, does Lambchop smoke Macanudo Duke of Devons with maduro wrappers?
I don't think so.
National City will cut its common stock dividend 49 percent and eliminate 900 jobs as it stops offering mortgages through brokers.
National City Slashes Dividend, 900 Mortgage Jobs
| Reuters
I think of mp as Sherry Lewis and Conjure Bag as Lambchop.
I think of mp more as Mad-Eye Moody and Conjure Bag as a Pensieve. But that's just me.
Panicker --
You are correct that the multitude of "ifs" present us with a very scary scenario -- that said, I'm personally slightly more optimistic than I was several weeks ago. Here's why:
The path for working out the SIV-CDO disaster is for the lenders to take them back on their books, as opposed to dumping them at fire sale prices. E-Trade did the latter, and got a whopping 37 cents on the dollar. HSBC was the first to take back it's SIV, and Citi reluctantly followed suit. CitiCorp might not survive the mess of it's own making, but the PetroDollars and Asian Export Sovereign Wealth Funds seem more than willing to exchange their greenback billions for equity positions in the American Financial Institutions. Maybe CitiCorp will be renamed SaudiCorp, but that would not be the wisest PR move.
Second, as a self proclaimed expert on the Central Bank's failings in the Great Depression, Helicopter Ben Bernanke has already signaled that he will not allow a deflationary depression to destroy the economy. The only other option is to flood the markets with liquidity, and take your chances with stag-flation -- and that is my prediction: we are headed into a recession, with declining home values and the credit crunch at the bleeding edge; but the powers that be will do everything in their power to keep the bubbles inflated, to minimize the visible damage.
I think of mp as Sherry Lewis and Conjure Bag as Lambchop.
You mean like mp has his hand into conjure's... Thanks a lot! Now, I can't get the image out of my head!
Tanta,
Extending that thought, I see CB as a Pensieve that has consciousness and autonomy - not to mention wicked taste in cigars, cartoons and other vices - all rolled into the yesterday/today/tomorrow world...
First attempt at Conjure Bag clock template....be gentle.
CB Clock v1
revision 2 with spelling update...
Revision 2
Panicker, you left out commodities hyperinflation. That translates into another cut on the consumer at the pump and the grocery store. The consumer hasn't collapsed yet but the number of cuts has to be getting into the 900's.
I remember when gas got to $3 a gallon for the first time in 2005 there were a lot of stories about lots of people using credit cards to pay for gas. I wonder what they're doing now. Refi'ing the castle every couple years to clear the credit cards is probably going to be a nogo for a while.
I suck at the internets...
\tRevision 2
Thanks Don and ck. Sometimes, I just envy my kids. They're too young to know what's going on, while I with my neanderthal cranium just panic silently. When we said our prayers over New Year's Eve dinner, my wife and kids told me "everything gonna great next year!".
Washington Post 'House Lust' Hits Home
Robert J. Samuelson - 'House Lust' Hits Home - washingtonpost.com
Panicker, you have a family. Conjure says, "If you listen to each other, and help each other, 2008 will be a truly great year for you, regardless of how the economy turns out."
mp,
I was thinking more along the lines of Lars Tetens . . .
An interesting, if a little long, look back & ahead:
The Market Ticker
MAB writes:
Its not just a housing bubble, its a massive credit bubble.
Transfering risk does not eliminate risk. Plus, it will become known that the risk was not truly transfered at all. Foolish lending to telecoms, housing, cre, private equity, hedge funds via leverage, auto loans, mew, credit cards.
Nothing new here. Same foolish lending, just different channels
Patience!
MAB | 01.02.08 - 11:14 am | #
what an intelligent sentence.In the end somebody has to take the risk