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What Is the New S&P Normal?
The Burst Commodities Bubble
We are in deep water and fast currents but it is partly illusion. The Credit Suisse Chart of Mortgage Resets shows the flight plan. Right now every day is worse than yesterday and the water goes down into the stygian dark depths. But the water is not as deep as it seems. The flight plan says we are almost halfway through this Fall Nightmare. The Market Crash scheduled for August 14 took until the end of September to happen; it will all be better than expected because the chaos was held off by the strength of the overall economy for a lot longer than the Fates expected. The Powers-That-Be are working hard at doing their thing. Two more weeks to November; then we will not be safe quite yet but there will be some sense of solid bottom and we will be able to begin resuming breathing.
There may or may not be a Christmas gift, but certainly a Chinese (Lunar) New Year's gift. The flight plan says by then it will be back to much like this past mid-summer with no more mountains to cross. If the big boys will just behave for awhile, it will be a rough road for a very long time but it will be over. Now and for the next week or two is probably the best time for (us) little guys to glom onto some cheap (affordable) stuff before the stock prices turn into helium balloons again.
A Quick Review of I.O.U.S.A.
At work, just before I retired, the hatred that I had no credit card debt, no rent or mortgage, money in the bank, came oozing out of everyone's pores; dripping down the walls; washing up out of the floor like swamp water. America lives in Denial and exults in misery relating to money problems. Almost everyone works hard to stay in economic trouble; it has become the standard culture.
A quick look at the Standard Statistical Curve will refresh memory that about 85% of any population is the 'mainstream.' The next 14% is guiding or supervising; 1% or 2% is the leaders. I.O.U.S.A. did mention that our leadership is totally lacking. As a reader of this, you are a part of the 14%. You might be able to cause change in the greed of the actual leadership that would cause them to want America to become savers and achievers like the Chinese and most other Asians because the leadership will gain the most if our culture changes to that standard. If we do not change, then very soon, maybe much sooner than anyone can imagine, we will be unable to obtain the materials, goods, medicines, food-- that come from the rest of the world. Our money will be useless, no one will feed our debt. Then it will not be O.K. until 70% of Americans have died of starvation and disease. A very small surviving population might have enough internal resource to begin to build a new 'dream.'
Even Warren, with all his money, might find that he is not permitted to relocate or even visit outside our borders because all Americans will be pariahs; and note that that money by itself is not nutritious nor does it have any medicinal qualities.
Who’s Really Getting Bailed Out Here
Financials Have Bottomed? Readers Say We're Nuts
Market bottom best guess as a Chinese New Year gift but there will not be any real Bull Recovery for two or three years. Target Summer of 2012 for the beginning of really better times.
Game plan is to do what presents itself in short time frames and also look at dividend accumulation.
Bank of America Buyback Announcement: Who Cares?
Before all of you start telling me how stupid I am or how everything I am doing is wrong, listen to my "strategy."
Chuck holes in the market come and go. Bear Markets come and go. "Unrealized P&L's" are mind games. All that matters is the cash of the dividends and at the moment I have a little more income than needed to pay the bills. For now the dividends get reinvested. I am trying to prepare for eventual problems.
If BAC and some others survive this mess then all is well. That is even if some dividends are reduced or even stopped for a while and then resumed. I do the best I can with the information available to me (necessarily mostly what I can find for free). FWIW, my dividend stream is currently averaging 8.20% of my initial investment. If any of the positions ends in a bankruptcy or compete shutdown kind of failure, I have a tax write-off.
My bottom line is that I feel insulted by the offer BAC made.
Historic Financial Collapse Underway?
Old Dominion Booms as Truckers Bust
Small companies and the independent owner-operator are being eliminated. This will result in economies of scale and de-facto monopolies. Far too many changes in the landscape to even begin mentioning.
The current energy crisis will move the process a lot. Investors, whether individuals or institutional managers, will have to watch events very carefully and try to pick out the best times to put money into the right places.
It may be as much fun as in the early 1900's trying to decide which buggy-whip makers were going to survive by shifting to become car-parts suppliers and which of all the new auto builders were still going to be around after a few years.
Housing: Barron's Calls a Bottom
It all started in November from a significant high. Phase two is about to commence from a serious low. It will be very interesting to see how far down it can go by, say, Chinese New Year. Then it will still have a long way to go before the mortgage mess is actually "over."
Our economy has actually never recoverd from the Telecom Crash. It has just been riding the Housing Bubble. YYZ (above) reminded us that it took Canada five years to recover in the '90's. It could take the US ten or more, there is a lot more to fix. Add 10 to 2012 and the clear start of the recovery is in (gulp!) 2025?
The Mauling of the Dow
"How bad is it going to get?" is easy. Repeat the 1st and 2nd quarters of this year except start from our current lows instead of the levels of last October and part of November. We have a "Hindenburg" indicator and several other things telling of a serious drop. Mortgage Resets (Credit Suisse) by Alt-A and Agency Resets will generate as many or more foreclosures in the Fall as in the Spring. Job layoffs and business bankruptcies and small businesses just closing doors should skyrocket because of inflation and consumers with no money or afraid to spend on more than minimum essentials. Look for the January equivalent drop in August, then that long bumpy downhill slide to somewhere in the late winter. Should be very interesting about Election Day time.
Sell stocks? Maybe do whatever Mr Faber had in mind by his use of the word "Tactical." I am trying to move into securities that have a global footprint and preferably are based in other countries and other currencies and hopefully that pay some dividends. Worst case, those dividend payments might be the only real money available to hand. Check out Zimbabwe.
Double Bottom Forming or Just a Pit Stop on the Way Down?
What is scary is that the Genie may have it together. I am holding what cash I can.
Mail Delivery as Economic Bellwether
Weyerhaeuser: Returning to Its Roots
"Rubinomics" Is Back, Part Two
A Closer Look at the Impact of Higher Gasoline Prices on Driving