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Fannie, Freddie and the 4.5% Mortgage Myth

The whole idea of lowering financing costs assumes that price elasticity for buyers is still the same as it was in 2000-2007. It is not and THIS is the fatal flaw of the plan along with our rapidly changing demographics. We will continue to have an oversupply of homes for several years (maybe a decade)because not enough buyers are coming of age to take over the amount of homes that need to be sold as baby-boomers downsize or just move into retirement communities.
Dec 05 12:10 pm |Rating: 0 0 |Link to Comment |View article
The Tyranny of the Shareholders

Tyranny of the shareholders?
What are you smoking?(Pass it on, don't be a bogart)
It's the COMPLACENCY of the shareholders that have gotten us into this mess. And when I say shareholders, I mean the mutual funds and index funds that stand by while impotent management run companies into the ground.
I think the whole idea of index funds has been a giant failure because they have no incentive to monitor management through the board of directors. We have all been fed a line of bull that no portfolio manager can outperform the index over time so invest in index funds that are no check on management at all. I bet Bernie Ebbers loved that idea!
And look at all the other mutual fund companies who have failed to adequately price the risk into the strategies that the companies they invested in undertook(namely BSC,GS, MS, LEH, JPM).
Had they taken a more realistic approach to the risk these outfits took on when they expanded their leverage ratios, shares of such companies would not have been bid up to such unreasonable heights. Management, in turn, would not have profited so handsomely from their stock options and then, maybe way back when, the whole idea of overleverage would have been put to bed and prudence would have reigned.
But , no, portfolio managers are like the blind leading the blind. Taken by the nose by securities analysts from the same brokerage firms, they are led down the primrose path and are told all is well, keep buying lest the next guy outperform you. Chase the earnings, forget the risk. Do any of these guys bother to read a 10-k anymore?
What has happened to security analysis and portfolio management in this country?
What has happened to the idea that people should keep a reputation(that isn't a bad one)?

Dec 03 15:12 pm |Rating: +2 0 |Link to Comment |View article
Black Friday vs. Cyber Monday: Gen X and Y vs. the Baby Boomers

Who is the silent generation?
Dec 01 10:17 am |Rating: 0 0 |Link to Comment |View article
Analysts At Their Least Bullish Levels Ever

Go back 30-50 years and you might have something significant. Your sample isn't big enough. In this sense you need to sample a lot of bear and bull markets and/or recessions and booms to have something meaningful to say. Your period only covers 2 recessions(1 minor and the other just starting).
Nov 26 09:28 am |Rating: 0 0 |Link to Comment |View article
Berkowitz, Rodriguez and Pabrai: Examining Q3 Filings

LUK has a big copper ore mine due to come on stream in '09 and also a large interest in an iron ore mine in Australia.With copper and iron ore prices plummeting, that could be a big drag on their earnings.Also look at their recent investments in Americredit(ACF) and Jefferies(JEF), both are underwater. Their portfolio isn't looking too hot right now. I also have to wonder about cash flow from their wholly owned subsidiaries like the lumber mill and winery. You have to start thinking if they can service their $2billion in debt. Boy just penning these words makes me want to short the stock, I think I will.
Nov 19 11:01 am |Rating: +1 0 |Link to Comment |View article
Watching the Malls: As Goes Retail, So Go Communities Across America

2Houndz,

I would be interested if you could name 3 or 4 of what you believe to be the worst run retail mall etf's.

Thanks.
Oct 20 08:55 am |Rating: 0 0 |Link to Comment |View article
Salesforce.com: Pricey and Coming Down Fast

All I can say is "Amen"
Oct 17 10:04 am |Rating: 0 0 |Link to Comment |View article
Who We Should Blame for This Crisis

Want someone to blame? Look in the mirror, it is all of us.
Oct 10 09:48 am |Rating: 0 0 |Link to Comment |View article
The Beginning of the Endgame for Monetary Policy, Redux

Oh one other thing, Dave Merkel, do you know a guy by the name of Scott Stolz? Just curious, I used to go to school with him and he's been a senior VP at a couple of insurance outfits. Thought you might know him.
Oct 09 19:28 pm |Rating: 0 0 |Link to Comment |View article
The Beginning of the Endgame for Monetary Policy, Redux

I think we will wake up monday morning to several bank failures and the stock markets-in a worlwide coordinated move will be shut down.
Oct 09 19:27 pm |Rating: 0 0 |Link to Comment |View article
@VIC: Leon Cooperman on "The Investing Climate & All-Weather Stocks"

Mr. Cooperman may say America is on sale but I would call it a forced liquidation.
Oct 08 11:28 am |Rating: 0 0 |Link to Comment |View article
Our Coming Depression

The last time a government bailout worked was Chrysler in the early 80's.The warrants zoomed in value and the loans were repaid(Just for the record since you asked). However that was a company specific problem, not the systemic problem we have today due to de-leveraging.

Your analogies to the 1920's-30's are valid, debt as a percentage of GDP are way too high. However I disagree that people are really aware of the problem and ready to accept the 'bitter' medicine. Rather we live in an entitlement society born of the new deal, and the entitlement mentality has only grown each decade with new government programs designed to help the 'needy' yet used by the middle and upper class. The most egregious of entitlements today seem to the 'right' to pay lower taxes in the guise of creating jobs for the lower classes. I think that when the reality comes home to roost that we are not as wealthy as we seem, we will see some very serious social upheaval - like riots that will make the one in LA in 1991 look like a picnic!( I am stocking up on firearms, ammo and fire extinguishers)
True value destruction has yet to be seen from the coming calamity. I think your projection of Dow are far too generous. If we see massive store closings, we will see concurrent retail store bankruptcies. Try to picture a world without either Lowes or Home Depot, Target, Bed Bath and Beyond, Whole Foods. Picture lots of malls with empty store fronts and therefore lots of bankrupt REITS. GGP will be the first to go followed by many others like SPG, CBL, MAC.
As an investor your guide should be to look to the bond markets. In the deflationary environment that we will soon face, its better to have a contract guaranteeing repayment and secured by assets than a residual equity interest.

Oct 07 12:10 pm |Rating: 0 0 |Link to Comment |View article
Dollar Soars

This is really faith in the LIQUIDITY of the 30 day T-bill.
Oct 02 08:57 am |Rating: 0 0 |Link to Comment |View article
The Road to the (Financial) Final Four

I want to see that Wells Fargo - Federal Reserve game. I 'll take wells and give 5.
Oct 01 18:31 pm |Rating: 0 0 |Link to Comment |View article
Bond Outlook in Light of the Treasury Plan

I agree with your prognosis, Treasury debt yields will explode because of this plan, the level of borrowing is unprecedented. I think we are also looking at a downgrade of the US credit rating as already evidenced by CDS rates on US debt. Next to come will be a crowding out affect in the debt markets, further increases in rates on ARM mortgages causing further defaults, and a run on the dollar.
I look out the window at my neighborhood and honestly think that a year form now,1/3 to 1/2 of these homes will be empty.
Sep 22 10:58 am |Rating: 0 0 |Link to Comment |View article

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Jim Cramer's Picks -
Sample

Better Choices - Cramer's Lightning Round (10/15/08)

by SA Editor Rachael Granby

Stocks discussed in the lightning round session of Jim Cramers Mad Money TV program,
Wednesday, October 15.

Bullish Calls:

Continental Resources (CLR) -- "This is a remarkable decline. All of the high quality ones are down so much, I can't go against it. This is where you pull the trigger.
3M (MMM) -- The moment this stock starts yielding 5%, I'm a buyer. Until then, keep your powder dry.

Bearish Calls:

Computer Sciences (CSC) -- This is a company that was going to be bought, but they passed up the chance. Now I don't want to buy it."
Annaly Mortgage (NLY) -- I think this is a business model that needs to borrow money. Definitively do not buy."
Northrop Grumman (NOC) -- You can't own the defense stocks right now. If I had to own one, I'd look at Lockheed Martin (LMT) with its good dividend.
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