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Helocs and refis are dead..consumer drive dead

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Feb 7, 2008 8:30 pm

Indy,

This is all in good fun! BTW, ISM just confirmed the 41.9..so you see the market dump a little. Using the dollar index of 77 I will say at least 20% lower than your guess. At least...I think it may be alot less!   I mean no disrespect by any of this....Remember, either way the market swings, we can all still makemoney.  Clients are happy, referrals are rolling and I have not soliciated any business for a few months!   Also, keep in mind heads of commission or economy driven companies are generally bullish, so please look at others for comparison on guidence.  Kleintop..i feel will flip and flop bear...bull....bear.
Feb 7, 2008 9:01 pm

Yes, indeed.  I know ISM confirmed the numbers, but the new business birth/death assumptions make it highly likely that the number is not accurate…at least until a few more measurements are taken.  We shall see…

  FWIW, I've heard Kleintop and Anderson both take bearish positions that were equally well-reasoned.  Kramer, on the other hand, goes from one extreme to the other with very little sound reasoning behind his wild gyrations...Lord, help those who eagerly lap up the vomit he spews forth daily...   ...and no disrespect is taken...most of my clients are not 100% equities either (although personally, given my aggressive posture, I'm doggoned close.)
Feb 7, 2008 11:21 pm

C’mon guys if you think it is more or less why not make your prediction where you think it will be, don’t hedge.     Good times though.  I personally have no clue where we’ll be but am inclined to GUESS we’ll be higher than we are today.  (History says I have about a 75% chance of being right.)

Feb 8, 2008 1:01 am
Indyone:

Dob, sure you can, but I was thinking more like ending index values rather than returns…

  So was I!
Feb 8, 2008 1:43 am

Aw man…ANOTHER member of the flat earth society?!!

Feb 8, 2008 4:22 am
Indyone:

Aw man…ANOTHER member of the flat earth society?!!

  Indy.....Now wait a minute...it is the other way around.   We are the "contrarians stating the earth is a sphere", Us being CONTRARY to the popular view, thereby making YOU a member of the flat earth society!
Feb 8, 2008 2:14 pm

We need real productivity gains in this country. Higher savings rate, less borrowing. This downturn will be painful but necessary.

Feb 8, 2008 4:11 pm

flat earth members focus on one or two metrics to bolster this sky-is-falling-long-term crap. It is very black and white. Life is grey, however, and economies are WAY too complicated to focus on the value of the dollar as a long term predictor of anything. Unplanned contingencies happen everywhere and always, but in the color of grey (no one is always right).

   
Feb 8, 2008 5:12 pm

What metric are you using to say everything is OK? Let me guess…history. Keep in mind we are alway rewriting history. 

  The value of the dollar is a manipulation tool..has little to do with our economic condition..We can be in a depression at dow 6000...or at dow 60000...ie deflation, or hyperinflation.   There are numerous indicators that point to a bear market..short term and long term. The multitude of financial problems which are far worse then 1929 has the economy on the ropes right now..again, we have only seen the tip of the iceberg on this one.  The hundreds of billion in subprime losses will be remembered as the first drop in the big bucket.   Long term (actually not too long..as it is also in play right now), A growth economy is impossible in a finite world...that is something that some of the best economists and financial experts have failed to understand.  Our global economy is based on infinite growth.  Our resources are severely limited, enough said.   newnew..i agree with you on the grey..it's just that my grey is MUCH darker!
Feb 8, 2008 7:44 pm

finite world=no more babies. I doubt it!

Feb 8, 2008 7:57 pm

new,

answer this.   How many people lived around 1850??    Go ahead and google it.....    
Feb 8, 2008 8:03 pm

I’m using earnings trends for 4th quarter 2007.  Outside of financials, they look good to me.  Forward P/E’s are at 18-year lows.

  There are also plenty of things that are better than they were in 1929, most noteably, the relative lack of speculation in the stock market.  Subprime is nothing compared to banks having the bulk of their capital invested in common stocks (trading at huge multiples of their actual value) back in the 20's.  Heck, they had a fair portion of the depositor's money in the market as well.  Individuals were borrowing just as hard and fast as they could to invest in stocks.  All these things are severely curtailed today.  The brokerage industry has margin restrictions.  The banking industry has Reg T & Reg U.  Banks themselves cannot invest capital in common stocks and are limited in their use of bond derivatives.  The FDIC not only exists today, some folks think it's way overfunded (having no facts or numbers, I have no opinion here).   I think we've seen a lot more of the iceberg than you think and that's a product of who we are disciples of.  I tend to buy the moderate pitch and you're sticking with folks who have an exceedingly gloomy outlook.   A growth economy impossible in a finite world? Bulls have used "it's different this time" in the past to explain why there should be no limit to what we paid for tech stocks.  Are there some things that are different?  Sure, but I think for the most part, we will repeat the business cycle over...and over...and over again.  It's no different than saying we'll never put a man on the moon or Maris' home run record will never be beaten (at least legally...).  Yes, someday, we will probably deplete the natural resources of this earth, assuming we don't make a significant shift to renewable resources.  By that time, some of us could be living on Jupiter for all I know.  Human beings will continue to adapt and change in response to our changing world(s).  When we're all done and the world comes to an end, Satan and Jesus will swoop down and divide us up depending upon how good or bad we've been, and usher us into the after-life.   At that point, it won't matter where the economy or the stock market is anyway...
Feb 8, 2008 8:10 pm

Indyone… I’ve heard the food is better in hell. If it’s only going to be you, the father, and the son around the dinner table(I assume the holy ghost doesn’t eat???), why would you cook for so few?

Feb 8, 2008 8:21 pm

With all do respect..without finance, nothing else stands! ...period, so your forcast is bigBEAR.

  Our economy is based on infinite growth..   Is infinite growth possible if we know our resources are finite (limited)?   finite world= a ceiling   Big question, are we near a ceiling??
Feb 8, 2008 8:38 pm

I don’t know, but in the meantime it seems like a swell idea to spend my time worrying about it!

Feb 8, 2008 10:08 pm
Ashland:

Indyone… I’ve heard the food is better in hell. If it’s only going to be you, the father, and the son around the dinner table(I assume the holy ghost doesn’t eat???), why would you cook for so few?

  I'm assuming that hell serves cajun...   With the tounge in cheek aside, I had to deal with this a few years back.  A new client came to me in 2002 ready to fire her Smith Barney broker because Jack Van Impe (her favorite televangelist) was telling his audience that he'd been out of stocks for several years already and that they should get out of the market.  Her Smith Barney broker naturally disagreed with this strategy and was getting fired as a result.   Whether or not we agree with our clients on religion or politics, it's important to show respect and use diplomacy, so without calling Mr. Van Impe a quack/hack/fraud, I reminded her that just as preaching wasn't my specialty, investment management probably wasn't his.  I also told her that if Reverend Jack was right, and the end of the world was near, the direction of the stock market would probably be the least of our worries, but in case he was wrong, we should probably put some money in the market for her future needs.  End result, I moved the account and convinced her to stay in the market.  She's so aggressive now that I can't get her to take some money off the table in the form of a VA.
Feb 8, 2008 10:12 pm

You better worry about it since you don't have a grasp on this concept..wow.......I understand it....and have accepted it as reality......and I'm making money!

The population in 1850  was about 1 billion..  we now have 6.6 billion.  WHY?

from 1850 till today, oil was discovered.  Oil is used to make nearly everything.

Very  importantly, petroleum oil is fertilizer for our mass farming food crops.  Without it, food cannot be produced at current rates.   Believe it or not the world uses 86 million barrels a day now...but production is only 84 million. Demand higher than supply.  We are in  the "peak oil" situation (look that up). So we are now on the downwards slide as far as finite resources...that is why it is so different now.  The current financial crisis is a direct result of this infinite is impossible situation.
Feb 8, 2008 11:19 pm
Indyone:

[quote=Ashland]Indyone… I’ve heard the food is better in hell. If it’s only going to be you, the father, and the son around the dinner table(I assume the holy ghost doesn’t eat???), why would you cook for so few?



I’m assuming that hell serves cajun…



With the tounge in cheek aside, I had to deal with this a few years back. A new client came to me in 2002 ready to fire her Smith Barney broker because Jack Van Impe (her favorite televangelist) was telling his audience that he’d been out of stocks for several years already and that they should get out of the market. Her Smith Barney broker naturally disagreed with this strategy and was getting fired as a result.



Whether or not we agree with our clients on religion or politics, it’s important to show respect and use diplomacy, so without calling Mr. Van Impe a quack/hack/fraud, I reminded her that just as preaching wasn’t my specialty, investment management probably wasn’t his. I also told her that if Reverend Jack was right, and the end of the world was near, the direction of the stock market would probably be the least of our worries, but in case he was wrong, we should probably put some money in the market for her future needs. End result, I moved the account and convinced her to stay in the market. She’s so aggressive now that I can’t get her to take some money off the table in the form of a VA.[/quote]



You’re right, of course. Knowing you for a while I knew you’d take it the way it was intended. Certainly didn’t mean to offend…
Feb 9, 2008 6:43 pm

[quote=Broker7]You better worry about it since you don’t have a grasp on this concept…wow…I understand it…and have accepted it as reality…and I’m making money! I grasp what you’re saying, but I’m also telling you that there are plenty of people much smarter than you or I who don’t buy into that POV.  Again, the nature of human beings is to adapt and thrive.  We lived before oil was discovered and used and my guess is that we’ll live (albeit differently) after it’s gone.  In fact, I believe that we’ll be on to some alternative before it’s gone and these natural resources will never be depleted.

The population in 1850  was about 1 billion..  we now have 6.6 billion.  WHY?  I think that's a simple mystery to solve...  At some point, yes...we will reach a point where many people will simply not have the necessary resources to support more children and the population will self-correct.  Sadly, in some instances, this is happening today.  Children die because their parents irresponsibly create them without the resources to raise them.  I think the zero population growth people are fundamentally right, even though morally, it's difficult to tell someone that they can't have a child. 

from 1850 till today, oil was discovered.  Oil is used to make nearly everything.  Again, things were made before the industrial age and my guess is we'll find another way and oil will be considered an obsolete source of power.

Very  importantly, petroleum oil is fertilizer for our mass farming food crops.  Without it, food cannot be produced at current rates.  This again assumes a complete lack of innovation that any futurist would adamantly refute.  At one point early in the computer age, the head of IBM envisioned the need for perhaps five computers in the world.  There are plenty of innovations coming that will amaze both of us.   Believe it or not the world uses 86 million barrels a day now...but production is only 84 million.  Come on...that's pure baloney.  We all know that (1) OPEC is holding down production to support higher prices and (2) this is simply a temporary inventory adjustment or we'd have long since ran out of gasoline.  If I bought into that, I'd expect to see gas at $1,000 per gallon by now.  The following is from the January EIA report:   "Global oil markets will likely remain tight through 2008, then ease moderately in 2009.  EIA projects that world oil demand will continue to grow faster than oil supply outside of the Organization of the Petroleum Exporting Countries (OPEC) in 2008, leaving OPEC and inventories to offset the upward pressure on prices. In 2009, higher non-OPEC production and planned additions to OPEC capacity should relieve some of the tightness in the market.  As a result, the level of surplus production capacity is projected to grow from its current level of under 2 million barrels per day (bbl/d) to more than 4 million bbl/d by the end of 2009." (emphasis mine)   Demand higher than supply.  We are in  the "peak oil" situation (look that up).  I've seen it...and I'm still not buying.  There are plenty of articles that state to the contrary.  If you don't believe it, just Google "Peak Oil Myth".  There are certainly crackpots on both sides of the argument, but there is also compelling evidence against the peak oil theory.  At the very least, it's arguable that we're there now.   So we are now on the downwards slide as far as finite resources...that is why it is so different now.  The current financial crisis is a direct result of this infinite is impossible situation.[/quote]   Certainly, we're not without our challenges globally.  Where you and I part agreement is whether or not the human race has the capacity to solve those challenges.  Given our history of ingenuity, I'm willing to bet that there will be solutions in the future that neither of us have the capacity to imagine today.  I think that healthy amounts of both optimism and pessimism are necessary for society to advance.  Too much of either side gets the stock market and life in general out of balance.  I'm happy to continue acting as your counterweight...   ...oh...and I'm making money too.
Feb 29, 2008 4:43 pm

Indy,

sorry man, just noticed......that last post you responded to was for new new... I know you grasp what I am saying..you are my trusty counterbalance..