Cyprus-Forum.com

[Johnson&Johnson]

yes i think he is in san diego

he does some pieces for www.financialsense.com, you should find that feed on there

do you ever check out globaledgeinvestors.com ? (GEI)

it's a very good forum

did you see the buffet piece today - no credit crunch, although he sees the dollar heading much lower if present policies go on as they are. he actually thinks we may see the greenback falling for another 10 years !

[Johnson&Johnson]

http://www.financialsense.com
http://www.greenenergyinvestors.com

[dinos]

Thanks for the links. I liked the "Keynesian Chickens Coming Home" article.

If you have a sense of humor about this, I thought the following quote was amusing:

"These nattering nabobs expect a housing collapse to take down the U.S. economy. But excessive pessimism is unwarranted: Fears of a housing bubble are overblown...

The good news is that demographic, tax and economic factors explain most, if not all, of the greater-than-expected activity in housing."

Cramer has been yammering on about this. Surprise, surprise...

http://online.wsj.com/article/SB111749811222546623.html
May 31, 2005
**************************************************

This is juxtaposed, of course, with y/days info that pending home sales dropped 24%. And the NAR's headline:
"Existing-Home Sales to Hold in Narrow Range, then Begin Upward Trend."

WTF?!?

Again, the problem in the NAR's analysis is that their "narrow range" is a month to month variation, while the drop occurred year over year. The NAR's stated methodology follows:

"In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons."

http://www.realtor.org/press_room/news_ ... range.html

When there's no good news, wing it somehow...

[Leffette]

Dinos

Gosh I have to tell you this... I am scared of your picture, change it

Fiat currencies are fine, but you have to watch your fundies - something the US government is catastrophically poor at. Especially with dolts running the country who think that debt is just numbers on paper and doesn't matter.

Touching on inflows from European sources covering other shortfalls... this theory just doesn't hold up when you have an environment where your currency is being driven down in value, your secretary of the treasury is trying to fix the situation by making people abroad as irresponsible as people at home and head of your central bank routinely flip-flops about what its role is vis-a-vis the economy. I'd have to say at this point, with dollars dropping, overseas capital would be foolish to invest in American equities because it's guaranteed to lose money.

Any case, I surmise that the US is now in a recession. But stock markets are generally an accurate gauge on the state of the economy, and with the Dow at 13,360, near historical highs, that's great, right? In the words of Larry Kudlow, the famous shill for the Bush administration: "If things are so bad, then why are they so good?!?"

I Like Big Buybacks And I Cannot Lie
In the past several years, a hell of a lot of companies have bought back tremendous amounts of their own shares. Never mind companies like Fastenal who bought back a million shares, or Callaway Golf who bought back $100M worth. We're talking IBM, Conoco, Affiliated Computer Services, Dell - who have bought back billions of dollars worth of their shares. Just to put it out there, Dell has authorized $10B worth of buybacks and IBM has issued debt to buy $12.5B worth. This is just off the top of my head - there's far more going on. With the supply of shares available dropping, stock markets have rallied. But it's hardly a situation where growth has led to stronger equity markets - the dow has gone up almost purely for mechanical reasons.

Taking it a step further, the Dow companies have a good deal of international exposure so they are able to capitalize on the cheap dollar and generate favorable earnings surprises when restating back to greenbacks. Again, they're not growing - they're getting lucky.

"But the cheap dollar is GREAT for exports!" Yeah, for exports. Only 11% of the US economy deals with exports. For the remaining 89%, the cheap dollar means cold hard inflation. And hence my thesis that the DJIA is not an accurate gauge at this point for the soundness of the US economy. We have to look at the value of the dollar for a clearer picture of the economy.

Public Liars
If You Don't Count The Prices The Increased, Then Prices Stayed The Same!
The Federal Reserve is the only central bank that reports "core" inflation. That is, they remove food, energy prices (J&J, I'm sure you know this - others may not) and take out M3 for good measure, and then report that everything is fine. The inflation number is not even an inflation calc any more. http://www.shadowstats.com/cgi-bin/sgs/article/id=343 Back in the 1990s, Greenspan, et al, theorized that if people were eating steak and the price of steak increased, then they would start eating hamburger. So any calculation of inflation should consider this shift. So the calculation identifies increasing costs against a declining standard of living. The cost of inflation has been replaced by the cost of survival.

Further, Uncle Ben has been waffling repeatedly in his interest rate bias. He says he won't drop rates, then caves into market sentiment and does so. We basically now have a Federal Reserve trying to game the stock market. All economies in the world have normal cycles of expansion and contraction. For whatever reason, "recession" has become a 9-letter four letter word here. The government doesn't want to allow normal market forces to take care of things so that you can re-start clean from a new floor. The markets are working against them - any liquidity that Bernanke added to the economy in the September time frame has all gone to Asia.

Even worse, Mr. Hankie (Paulson - it really is sad when you can accurately compare any government official to a South Park character) is working on a "solution" for the sub-prime mess whereby rates on ARMs are frozen so that folks can continue to meet their payments. So the banks will not be able to write down their bad loans, ensuring poor performance in the financial sector as well as continued tightening of lending practices. This will lead to continued problems with real estate.

October Housing Sales Revised Upward!
The National Association of Realtors recently spun that October sales were revised upward, when in fact, sales for September were revised downward. The fact of the matter is that prices in October fell at the fastest rate since 1970 - and this still hasn't kick-started sales. It's worth noting that the NAR's "economists" have never foreseen a drop in sales. It's a wonder that they can look themselves in the mirror when they're so obviously spinning to lend legitimacy to this gaggle of buffoons.

In summary, if you let people down when they need to trust you, you'll pay the price for it. This is what's happening to the US right now. From dishonesty with inflation calcs, to massaged GDP numbers, to fraudulent cheerleading by "economists" and pundits to central bankers that come across as incompetent. The US has been putting itself in a position where it's not trustworthy. Who would want to lend money to the US given that the money supply has to be increased to pay it back? God bless the Chinese, I suppose. If the lent funds dry up, that will have an even more serious impact than that above.

[dinos]

Dinos

Gosh I have to tell you this... I am scared of your picture, change it

Be careful what you ask for - you just might get it...

Hope you're well, Leffette.

[Shipwreck]

Wow! Heavy stuff guys. I have no money which = No money worries

[Leffette]

ahaha Dinos

Honestly, how much should i bribe you to change your profile pic...gggrrrr scary....!!!!

Dinos

Gosh I have to tell you this... I am scared of your picture, change it

Be careful what you ask for - you just might get it...

Hope you're well, Leffette.

[dinos]

http://www.nytimes.com/2008/02/10/opini ... ref=slogin

It's a bit to read, but this ridiculous analysis by chief economist and senior economics writer at the Dallas Fed (Cox and Alm) seems to explain to some extent the Fed's brainless decision making of late.

Fun, fun!

[dinos]

Holy crap!

http://www.economicindicators.gov/

"Due to budgetary constraints, the Economic Indicators service (http://www.economicindicators.gov) will be discontinued effective March 1, 2008."

They stop reporting M3 and it skyrockets. They stop reporting economic statistics and...???

[dinos]

You're a step ahead on this, J&J. Looky what's on the Big Picture...houses in Detroit between 0 and $5000. Out of a total of about 20,000 houses there, about 1395 fit this criteria.

http://www.realtor.com/search/searchres ... 2959&typ=7

Some of the properties are knock-downs. But several are being sold "as-is" and their features, like wood floors, are being trumpeted. What's really pathetic though, is the houses under $1000 that have $1250 selling agent commissions. These houses are actually worth less than zero.

Gotta give credit where it's due though. Seeing as how many of these banks have brought billions of dollars reamjobs on themselves, they are now requiring pre-qualified buyers! Guess they don't want to get screwed out of their $2/month payments!

Still, though, many of these houses were sold for a little over $100,000 a few years ago. So these banks are stuck holding the bag on big losses, trying to sell them at $500, they won't sell and even if they did, they're still taking a net loss. This makes me wonder - if you're getting soaked like this, does the $500 really make you feel better? Can't they torch the houses? Far be it from me to suggest insurance fraud - can't they just donate the houses to somebody and get the hell out of town?

Or are they drunk on realtor kool-aid? You know...
- "Detroit has its challenges - but we're ready for a turnaround!"
- or, "It's all the media's fault!"
- or, "This can be somebody's dream house! We just need to find that special buyer!"

If you don't mind having people break into your house and stealing your pipes and appliances, then you can have a house for cheap in Detroit. It's a matter of perspective, I guess.

So............who wants to complain about Cyprus now?