The sky is falling.........Bwaaakkk.....

[thebeav]

Wow, 11.87 silver......The Dow still can't get a grip. I heard that bond yeilds are dropping too. Where is the money going ? It's got to go somewhere......I mean, besides "poof"....

Paul

[TJ'S Coins]

The ability to keep one's head when everyone else is losing theirs is more valuable than anything else.

[conqueror]

This is the best time to buy more shares of the companys that one believes in. Yes my stocks have gone down few thousands of dollars in the past few weeks, but nothing has changed. I still own same amount of shares and the companys are still doing just fine.

 

John

[MarkFeld]

Wow, 11.87 silver......The Dow still can't get a grip. I heard that bond yeilds are dropping too. Where is the money going ? It's got to go somewhere......I mean, besides "poof"....

Paul

Actually a lot of the money IS going "poof", the result of highly leveraged hedge funds and their investments (edited to add: and losses).

[Keleum]

I think this sub-prime lender "media crisis", is causing people to over-react.

 

I had a boss who used to tell me "Stupid, hurts."

[jtryka]

Not all the money is going poof, a lot is going into bonds which is why their yields are dropping, the money going into bonds is driving up bond prices which means lower yields.

[truthteller]

Wow, 11.87 silver......The Dow still can't get a grip. I heard that bond yeilds are dropping too. Where is the money going ? It's got to go somewhere......I mean, besides "poof"....

Paul

Actually a lot of the money IS going "poof", the result of highly leveraged hedge funds and their investments (edited to add: and losses).

 

 

I agree. Watch for real estate backed hedge funds to implode. My main concern is not the stocks, bonds, precious metals, but the constant intervention by Central Banks throughout the world. In essense, the private banks can't find money to borrow for overnight transactions. Not really on the front page of the newspapers, but in the past, Central Bank interventions were very rare and ,on occasion, foretold economic troubles by private institutions. Remember the Continental Bank collapse? Or the S&L collapse?

 

 

TRUTH

[just-john]

bad home loans 6000 foreclosures last month in Maricopa county az last month

[chinook]

[Houston Investor]

If you believe the website - zeta talk, the elite is taking their money and heading for their enclaves in remote mountain areas as planet X approaches to within 15 million miles of earth as part of its 3600 year orbit. Since planet X (Nibiru) is 23x as massive as Earth, its gravitational effect will cause a pole shift along with the disasterous consequenses.

 

If I believed this (don't believe in planet x) I would flee Houston for somewhere like Montana as Houston (only 25 -50 ft above sea level) would get 600 ft tidal waves.

 

Any of you see any big movements of assets, people, and equipment to safe locations?

[BillJones]

Too much debt has caused economic downturns in the past. The Great Depression was partially the result of huge buying sprees in the 1920s when consumers over extended themselves in everything from houses and cars to the stocks. When they had to pay the piper and the credit dried up, the bubble burst.

 

Back then economic theory was not where it is today. Even Franklin Roosevelt had thing for balancing the Federal budget when the economy was on its back. It was partially that attitude that caused an economic relapse in 1937.

 

These things will sort themselves out, and if the Federal Reserve cushions the blow, the slump should not be too bad or too long. Still if you start believing in politicians who call for tax increases, “fairness” and wealth redistribution, get ready for harder times and stagflation. Capitalism works. All of the other systems don’t. It’s just simple.

 

[gmarguli]

These things will sort themselves out, and if the Federal Reserve cushions the blow, the slump should not be too bad or too long. Still if you start believing in politicians who call for tax increases, “fairness” and wealth redistribution, get ready for harder times and stagflation. Capitalism works. All of the other systems don’t. It’s just simple.

 

Cushions the blow? More like bails out companies and big investors.

 

There hasn't nearly been enough pain in the market this time. It's been a weak downturn. We need the buyers of the sub-prime deeds to be fully crushed. A large portion of the mortgage lenders to be run out of business. The banks need to be hit hard and write off billions in RE loans and HELOCs. The real estate market needs to go down 30%-50% in many areas and wipe out the ability of many people to get HELOCs. And we need to see a big sell off in quality companies stock as the weak players are forced to sell good companies to raise cash. All the while the truly smart investors will sit on the sidelines and watch the carnage and cherry pick up the good investments at depressed prices.

[MarkFeld]

These things will sort themselves out, and if the Federal Reserve cushions the blow, the slump should not be too bad or too long. Still if you start believing in politicians who call for tax increases, “fairness” and wealth redistribution, get ready for harder times and stagflation. Capitalism works. All of the other systems don’t. It’s just simple.

 

Cushions the blow? More like bails out companies and big investors.

 

There hasn't nearly been enough pain in the market this time. It's been a weak downturn. We need the buyers of the sub-prime deeds to be fully crushed. A large portion of the mortgage lenders to be run out of business. The banks need to be hit hard and write off billions in RE loans and HELOCs. The real estate market needs to go down 30%-50% in many areas and wipe out the ability of many people to get HELOCs. And we need to see a big sell off in quality companies stock as the weak players are forced to sell good companies to raise cash. All the while the truly smart investors will sit on the sidelines and watch the carnage and cherry pick up the good investments at depressed prices.

I think I agree.

[MikeInFL]

As do I...Mike

[World Colonial]

I think this sub-prime lender "media crisis", is causing people to over-react.

 

I had a boss who used to tell me "Stupid, hurts."

 

It is more than a sub-prime media crisis. This appears to be the "chickens coming home to roost" so to speak. Because it lasted so long, most people think that the recent lending standards were mostly normal except for a few aberations like subprime. That is is nonsense. The credit bubble is/was the greatest misallocation of capital - EVER - and the mania is now over and as a result, a lot of poeple are going to lose a lot of money eventually. Now as to whether "eventually" will be now or later, we do not know. The drop in the Discount Rate by the Fed on Friday is typical of what I would expect from them since they are the primary contributors to this bubble in the first place. If they continue to intervene as I expect, then the ultimate disaster and losses will simply be greater. There is no free lunch. All debts must eventually be repaid whether that means though inflation or default. (There is absolutely no hope that the highly over-leveraged American consumer can possibly retire these accumulated debts by paying them back with current valued money.)

[DC Dawg]

[The credit bubble is/was the greatest misallocation of capital - EVER - and the mania is now over and as a result, a lot of poeple are going to lose a lot of money eventually. Now as to whether "eventually" will be now or later, we do not know.

I am not going to get into a discussion on the Fed's policies. I've been arguing this with my father and we cannot agree.

 

HOWEVER, if you look at most market-related crisis that has lead to economic turmoil, it all revolves around the credit markets in some way. Over the last 100-or-so years, I think only the 1970s was the only time where overall liquidity and the lack of economic growth in markets that were settling into new paradigms (e.g., oil, precious metals, etc.) did not involve a credit-related crisis.

 

There is a Chinese proverb... or is is a curse... "May you live in interesting times." These are sure interesting times!!

 

Scott

[Keleum]

HOWEVER, if you look at most market-related crisis that has lead to economic turmoil, it all revolves around the credit markets in some way.

 

While I'd agree the credit-markets crash first, I would argue they are merely the first to fall, not the cause.

 

Anyways, it looks like the ECB will inflate the balloon this time, the fed doesn't have to.

[just-john]

If the sky falls I don't care I have a very good hat and after it falls and my hat works it time to buy.

[cpm9ball]

bad home loans 6000 foreclosures last month in Maricopa county az last month

 

We experienced a similar fate in Lee County, FL in May and June. There were 14,000 foreclosures, but many of those were "spec homes" that contractors built with construction loans.

 

Chris

[thebeav]

I've never suspected just how deep the banks have to be involved in the real-estate business. Their buy-sell housing departments must be quite large. I've never met anyone that works in this capacity.

 

Paul

[just-john]

mortgage companies - like country wide and 1/2 dozen others not the same as banks.

I like banks they have coins

[jtryka]

Countrywide actually owns a bank, which had some depositors lined up after they announced they borrowed $11.5 billion on credit lines.

[just-john]

If i had money in the company's that loaned them 11.5 billion.I would run to line up to make

withdrawal .Bet that 11.5 won't last the year maybe not even to December