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FatalWishes
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'It's going to be much worse' (Economy)
| Quote From Source: | NEW YORK (Fortune) -- You might expect Jim Rogers to be gloating a little bit. After all, the famed investor has been predicting a recession in the U.S. economy for months and shorting the shares of now-tanking Wall Street investment banks for even longer. And with fears of a recession sparking both a worldwide market sell-off and emergency action from Federal Reserve chairman Ben Bernanke, Rogers again looks prescient - just as he has over the past few years as the China-driven commodities boom he predicted almost a decade ago began kicked into high gear. But when I reached him by phone in Singapore the other day there was little hint of celebration in his voice. Instead, he took a serious tone.
"I'm extremely worried," he says. "I have been for a while, but I just see things getting much worse this time around than I expected." To Rogers, a longtime Fed critic, Bernanke's decision to ride to the market's rescue with a 75-basis-point cut in the Fed's benchmark rate only a week before its scheduled meeting (at which time they cut it another 50 basis points) is the latest sign that the central bank isn't willing to provide the fiscal discipline that he thinks the economy desperately needs.
"Conceivably we could have just had recession, hard times, sliding dollar, inflation, etc., but I'm afraid it's going to be much worse," he says. "Bernanke is printing huge amounts of money. He's out of control and the Fed is out of control. We are probably going to have one of the worst recessions we've had since the Second World War. It's not a good scene."
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Source Money.CNN
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money.cnn.com
I missed last week by moving my 401k too early into cash..but I am confident this market is due to tank...I just don't know when. By this summer banks will be worthless and credit cards will be maxed out. People cannot get money out of their homes so they are using their credit cards. Look at Master Cards (MA) stock and what its done and last quarters earnings.
The fed is printing money and lowering interest rates trying to buy us out of a recession. Inflation it going to be so high in the future ..the recession is going to be 10 times worse. They need to cut off the money and raise rates and let things tank and settle and start over. Now they are going to really tank and be drawn out for years.
They should take the warning labels off of everything and let stupidity sort itself out.
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FatalWishes
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I bet it gets better before it gets worse....
I'm wondering if there won't be a rally on wall street tomorrow.....NY Giants win the superbowl....
I'm gonna buy some stock lol.
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FatalWishes
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I think we just start our 3rd leg down that will take us below 12000 on the Dow. There was heavy selling into the close ...not a good sign.
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Indy
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Dow finished down 370 points. It is pretty close to having lost all the emotional gain observed after the announcement of a stimulus pack and two rate cuts. The economy is in big trouble. Bush's new $3.1 trillion dollar budget isn't going to give anyone confidence.
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FatalWishes
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| Quoting Indy - posted on 2/5/2008 at 17:35 |
Dow finished down 370 points. It is pretty close to having lost all the emotional gain observed after the announcement of a stimulus pack and two rate cuts. The economy is in big trouble. Bush's new $3.1 trillion dollar budget isn't going to give anyone confidence.
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I was looking at the chart and January's low was 12000. If we break that we are going down on a long slide. Not sure where it will stop before the bulls get too anxious and start buying stocks that had the crap beaten out of them again, but I still think before this bear market is over we will be at 7500-8500 on the DOW. This summer is going to be brutal when those ARMS reset.
If you purchased Homebuilder stocks in the last couple of weeks I'd dump them now. They are all about to be downgraded and that usually results in a sell off. I am doing some puts on a few. I'm going to make money one way or another. Shorting stocks will be the only way for a while.
biz.yahoo.com
Can't wait till things hit bottom. My buy list is growing large.
RZ keeps dropping surprisingly. I've seen this before. The major investors are trying to shake people out of that stock to get your money. They ain't getting mine. I'll piss em off and buy more. Damn thing just crashed through its 200dma, already below its 50 and 10dma and closed at 8.99.
It may keep going down....fine....I put in a chunk of money at $10.00. I'll just buy more....
When investing there is a rule...go where the puck is going, not where its been. Wayne Gretzky was so good because he didn't skate to where the puck was or had been, but went to where it would be going. In other words don't buy a stock that is going up or has already gone up, but get it while its down. And RZ is down.
The money is not in RZ right now hence its being oversold. It found support at 9.00 so...I think I'll pick up some more shares. The 10DMA line just crossed the 200 DMA....
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FatalWishes
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Wells Fargo's Senior Economist speaks
Here is the view of Wells Fargo's Senior Economist on today's ISM report. This economist doesn't cast doubt on the numbers like the Market Desk. This is a special report released immediately due to the potential signaling of a recession. The report anticipates a widespread selloff in equities as a result.
“There was a stunning drop in the January ISM Non-manufacturing index today. The index composite, a new measure, plunged to 44.6 in January from 53.2 in December. The business activity index also plunged to 41.9 from 54.4. This is the lowest reading on this index since October 2001, a number that indicates contraction in the services economy. This is a huge drop for this index. It usually never moves more than a point or two in any direction month to month. This data, if valid, raises the odds that a nationwide recession is currently underway. Now we have a payroll contraction and a contracting ISM Non-manufacturing index indicating a possible recession start date in January, stay tuned. To add to the confusion, this data largely contradicts the ISM manufacturing data for January that revealed a rebound in manufacturing and a return to expansion in the manufacturing sector. The ISM Non-manufacturing data was released earlier than expected today, apparently because the number was leaked to the markets. Expect global equities to sell off appreciably from here and equity values could remain under duress for some time. Equities opened down about 170 points on the Dow.
The ISM Non-manufacturing sub-component on new orders dropped more than 10 points to 43.5 in January from 53.9 in December. The plunge in the employment and import components was nearly as large. The employment component dropped to 43.9 in January from 51.8 in December, while import component dropped to 41.5 in January from 50.5 in December.
Yesterday, we also received important, though not entirely unexpected, news regarding the current condition of the bank credit crunch. The Federal Reserve released its senior loan officer survey for Q1 2008. The report showed widespread additional tightening of loan terms and standards across a broad spectrum credit, especially mortgages, home equity, and commercial real estate. Despite the Fed rate cuts to date, banks have continued to tighten credit further. If a recession has indeed begun, tighter bank credit will like make matters worse. Given the data we have at the moment, one can expect the Federal Reserve to cut another 50 basis points at the March FOMC meeting as they try to bailout a faltering economy.”
Scott A. Anderson, Ph.D.
Senior Economist
Wells Fargo Economics
This data is free for all. Its alarming as hell and goes right with what I have been saying. Cash is king at this point.
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FatalWishes
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This is a scary read
news.yahoo.com
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FatalWishes
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And now towns are going broke?
www.nbc11.com
Well when your area is too high priced......people cannot afford to live there. When they cannot afford to live there you cannot collect taxes. No taxes...no town. Pretty simple economics.
People are still wanting too much for their property everywhere. prices HAVE to come down. Its going to make every sore in the ass from this screwing. Those that had equity in their homes are going to lose it and break even when the prices do drop. No more trading in cars and houses every two years like in the past. You better make sure you really like your house and car when you sign on that dotted line because you will be in it for a while.
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MountainManMike
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i wonder how much of this already is due to al gore and his scare tactics. granted, there r a lot of factors in this other than al gores agenda...thats for sure but icecap.us had a great article on how laws that r already in place due al gore's hoax r killing people in the pocket book. nobody is focusing on this at all it seems though. |
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FatalWishes
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Banks Lose to Deadbeat Homeowners as Loans Sold in Bonds Vanish
| Quote From Source: | Feb. 22 (Bloomberg) -- Joe Lents hasn't made a payment on his $1.5 million mortgage since 2002.
That's when Washington Mutual Inc. first tried to foreclose on his home in Boca Raton, Florida. The Seattle-based lender failed to prove that it owned Lents's mortgage note and dropped attempts to take his house. Subsequent efforts to foreclose have stalled because no one has produced the paperwork.
''If you're going to take my house away from me, you better own the note,'' said Lents, 63, the former chief executive officer of a now-defunct voice recognition software company.
Judges in at least five states have stopped foreclosure proceedings because the banks that pool mortgages into securities and the companies that collect monthly payments haven't been able to prove they own the mortgages. The confusion is another headache for U.S. Treasury Secretary Henry Paulson as he revises rules for packaging mortgages into securities.
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Source Bloomberg
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www.bloomberg.com
LOL.
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Indy
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That is seriously funny.
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MountainManMike
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thats crazy. |
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FatalWishes
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AIG Posts Biggest Loss, Misses Analysts' Estimates
| Quote From Source: | Feb. 28 (Bloomberg) -- American International Group Inc., the world's largest insurer by assets, posted its biggest quarterly loss as a publicly traded company after an $11.1 billion writedown of guarantees sold to fixed-income investors.
The fourth-quarter net loss of $5.29 billion, or $2.08 a share, compared with profit of $3.44 billion, or $1.31, a year earlier, New York-based AIG said today in a statement. AIG declined in extended trading.
The insurer has dropped 21 percent in New York trading since Chief Executive Officer Martin Sullivan, 53, replaced Maurice ''Hank'' Greenberg in March 2005. AIG has units that originate, insure and invest in subprime mortgages and said it expects more writedowns this year amid the worst U.S. housing slump in a quarter century.
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Source Bloomberg
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www.bloomberg.com
Ok..that's not funny.
They didn't just miss their estimate....they totally fubared it.
said its adjusted fourth-quarter loss -- excluding capital gains, losses and hedging activity -- was $3.2 billion, or $1.25 a share, widely missing expectations.
Analysts, on average, expected a loss of 15 cents, according to Reuters Estimates.
In the year-ago quarter, New York-based AIG earned $3.85 billion, or $1.47 a share, from operations.
Man that is a HUGE loss. We are being lied to. This problems is WAY bigger then we are being told. Expect .15c loss yet they lost a 1.25. That is a HUGE GAP in estimates. This isn't even funny. It's scary as hell.
They should take the warning labels off of everything and let stupidity sort itself out.
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FatalWishes
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Yen Rises to Highest in Almost Three Years on U.S. Bank Concern
| Quote From Source: | Feb. 29 (Bloomberg) -- The yen rose to the highest in almost three years against the dollar after Federal Reserve Chairman Ben S. Bernanke said some U.S. banks may collapse.
The currency headed for a second monthly gain after Bernanke told the Senate yesterday ''there probably will be some bank failures,'' prompting investors to cut holdings of higher- yielding assets bought with loans from Japan. The dollar also headed for its biggest monthly loss against the euro since September before a U.S. government report that will probably show consumer spending stayed at the weakest in six months.
''There are renewed concerns over U.S. financial institutions, causing some investors to be risk averse,'' said Hideaki Inoue, chief manager of derivatives and fixed-income investment in Tokyo at Mitsubishi UFJ Trust and Banking Corp., a unit of Japan's largest publicly traded bank by assets. ''The yen is being bought.''
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Source Bloomberg
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www.bloomberg.com
I wonder how many banks......and when?
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FatalWishes
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This month starts the main ARMS reset and will go until July
Actually Jan and Feb were pretty high as well. We will not know just how bad those two months were for a couple more months but if this first quarter turns out to be devestating then the next quarter is going to finish us off. Third quarter we should flatten out....and should start recovery heading into 2009.
www.telegraph.co.uk
It would seem that just about anybody that bought a home in 2003,04,05 and part of 06 is gonna get screwed. Their payments are jumping from 1500 a month to 6000 a month. Since the bubble popped they cannot sell their homes for what they paid for them, they cannot afford the higher payments so they are walking away.
This will get worse before it gets better....I do see some light at the end of the tunnel but not until well into 2009 and possibly until 2010.
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Indy
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So the worst is yet to come.
"Well either way that sure is purdy. If it is global warming then at least the view will be nice before we die." - Fatalwishes |
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FatalWishes
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Exactly. We won't know how bad it will be for a few weeks...but I cannot imagine things are going to improve on the news. This month will create the highest number of foreclosures....
But that takes a few months. People will try to make payments, try to sell, and use credit cards to get by. Some will give up fast, others may drag it out a few months. The time delay creates a situation were the foreclosures won't hit for a while which is why this could drag on for some time.
I figure if you want to buy a new car or home....February of 09 will be a really good time. People will be damn near desperate by then. I'm worried about inflation though and interest rates getting raised to the point where the cheaper prices will be offset by the higher rates so this could last even longer.
Doesnt matter if a house is 30k cheaper or even 200k cheaper on a 300k home that was 500k if you have 12% interest rates.
A 500k home costs 3k a month at 6%
A 300K home costs 3k a month at 12%
So if you cannot afford it now, you won't be able to afford it later. And believe me rates will have to start going up to fight inflation.
Last week they were rising to almost 6% and this week they are back down to 5.85.
What we need is 300k homes at 6% for 1800 a month.
The problem doesn't end there. All those that have current homes cannot sell them for anywhere near what they paid for them and many are now upside down.
For instance I paid 179k for my home its now worth 155k. I owe 135k on it but if values plunge another 15% or so I'll barely break even. If they drop another 25% over the next two years I'll be upside down and won't be able to sell.
So if I cannot get out of my home and many many people are like this, then you just took away a huge amount of qualified home buyers off the market until it goes back up, but by then so will the other homes we want to upgrade to. So we are stuck.
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DanG
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Their payments are jumping from 1500 a month to 6000 a month
that is simply unbelievable.
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Indy
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Looking at that graph posted above I must think the US housing market is in serious trouble by the end of the year. A massive number of ARMs reset this summer. That will take another 90 days or so before it results in a default. You are looking at a flood of new foreclosures in fall/winter. Housing values will be trashed and you may very well be looking at a number of upside down mortgages by spring of 2009. There are still a larger number of ARMs that include subprime loans through early summer of 2009. This will likely extend the housing crisis to the start of 2010.
This may stagnate the new housing market for many years to come because people would have lost a significant portion of their home value and won't be able to move. People will be trapped in mortgages they can't unload. They won't be able to build that dream house. In fact with so many people trapped in mortgages it will likely drag out the foreclosure problem for many years to come. Certainly not to the level I'd expect through mid to late 2009 but certainly higher than in years past.
"Well either way that sure is purdy. If it is global warming then at least the view will be nice before we die." - Fatalwishes |
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chrisisasavage
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The idiots thought they could just flip the houses for equity when the mortgage went up. Except prices didn't keep rising at the rate they were. I work with the idiots that were peddling those loans and it was obvious to everyone involved what was going to happen. We were talking about it as far back as 2003. |
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FatalWishes
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Gulf investors may not save Citigroup, Dubai executive says
| Quote From Source: | DUBAI (Zawya Dow Jones) -- Mideast sovereign wealth funds may fail to save troubled U.S. banking giant Citigroup Inc. unless more cash is pumped into the lender, the head of a $13 billion Dubai-owned investment firm said Tuesday.
Sameer Al Ansari, Chief Executive of Dubai International Capital told delegates at a private equity conference that it will take more than the combined efforts of the Abu Dhabi Investment Authority, the Kuwait Investment Authority and Saudi investor Prince Alwaleed bin Talal to save the bank.
"It's going to take more than that to rescue Citi," Ansari said. He added that more write downs are expected and that Gulf investors would be required to bolster Citi.
The Abu Dhabi Investment Authority, or ADIA, a sovereign wealth fund owned by the world's fourth-largest oil exporter, last year bought a 4.9% stake in Citigroup.
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Source Market Watch.com
Source URL:
www.marketwatch.com
Well more bad news.....
They should take the warning labels off of everything and let stupidity sort itself out.
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DanG
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buh bye |
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FatalWishes
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Fed Chief: Mortgage Crisis to Continue
| Quote From Source: | Fed Chief Bernanke Says More Needs to Be Done to Prevent Home Foreclosures
WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke called Tuesday for additional action to prevent more distressed homeowners from falling into foreclosure.
"This situation calls for a vigorous response," Bernanke said in a speech to a banking group meeting in Orlando, Fla.
Even with some relief efforts under way by industry and government, foreclosures and late payments on home mortgages are likely to rise "for a while longer," Bernanke warned.
Rising foreclosures threaten to worsen the problems in the housing market and for the national economy, which many fear is on the verge of a recession or in one already.
| | Click source url to view entire story. |
Source Yahoo Biz
Source URL:
biz.yahoo.com
NO FN' DUH.
I've been saying that shit for a long time. Its amazing how far out of touch the government is about this stuff. They waited so long to do anything all its going to do is cause inflation in the future.
Houses won't be worth shit and neither will your 401k. And you will be charged the highest interest rates you have seen since the early 80's.
Not to mention energy costs yet the government is still dumping tax breaks into BIO-FUEL that nobody wants and NOBODY is fucking using. So there go our grocery bills, higher and higher...
Bastards.
And let me remind you about something else.....Credit Default Swaps. See other thread...
www.climatepatrol.com
We are now testing the January Lows on the DOW with the 500+ point drop since Friday of last week.
I can see busting through 12k really soon. I believe we are on our 3rd leg down. We will have to wait and see. I don't think this market can stand anymore bad news.
That graph I posted in this thread about the ARMS about to reset...OMFG. That is going to really burn out some banks.
Once banks start going under...if indeed that happens and I'm not saying it is, that will cause a panic and we could suffer some really huge drops in the market.
They should take the warning labels off of everything and let stupidity sort itself out.
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FatalWishes
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Well the market reclaimed some of the loss but we still ended up 45 points down. I don't see how much more its going to take before there is a big crash. I'm pretty sure the market is pricing in all of the rate cuts and that has helped but I don't see those rates being passed onto the consumer. Instead those cheap rates are being used by the banks to pad their accounts to cover the staggering losses. From what I have seen the 30 year rates have gone up.
The dollar is more worthless. At least oil dropped but gold is staggering...it will hit 1000.00 and soon. Platinum is out of the world and silver looks like a good bet. Of all things ..lead has gone way up. Go try to buy some 12 guage shot shells. The price has doubled because the price of lead has doubled. Used to be able to buy a bag of 25lb shot for 20 bucks. Its damn near 60 bucks with tax now.
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FatalWishes
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Carlyle Fund Gets Default Notice After Margin Calls
| Quote From Source: | March 6 (Bloomberg) -- Carlyle Group's publicly traded mortgage bond fund failed to meet margin calls and said it received a notice of default as banks call in loans against even the highest-rated bonds.
Carlyle Capital Corp. missed four of seven margin calls yesterday totaling more than $37 million, the Guernsey, U.K.- based fund said today in a statement. The fund expects to get at least one more notice of default related to the margin calls.
The collapse of the subprime mortgage market has prompted investors to flee all but the safest forms of debt, leading to the failure of hedge funds including Peloton Partners LLP. The Carlyle fund raised $300 million in July and used loans to buy about $22 billion of AAA rated agency mortgage securities issued by Fannie Mae and Freddie Mac, securities that have the ''implied guarantee'' of the U.S. government, according to Carlyle.
| | Click source url to view entire story. |
Source Bloomberg
Source URL:
www.bloomberg.com
Why doesnt this market just roll over and die??? We need to reboot. Reformat and start over.
They should take the warning labels off of everything and let stupidity sort itself out.
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