Yesterday's reaffirmation of the AAA ratings of Ambac and MBIA was not really a surprise, but it removed one of the bears' tools for manufacturing fright. I suppose they will come up with a replacement soon. Rather than sit around waiting, I have been pondering how this correction might end. One possibility is just a grinding attrition of all the bearish arguments. But another would be a shocking, unexpected bullish surprise. Being a optimist about the world and humanity, I want to present a plausible surprise that would cause a 1000 pt. Dow rally that would simply impale the bears.
Defaults on home mortgages have been increasing considerably, mostly due to subprime and Alt-A defaults. Lenders say they are surprised by the number of speculators that lied on their loan applications about the house being a principal residence. I accept that as a fact. So contemplate the universe of "shaky loans". What types of loans would default early ? This is simple ... the liar loans and the speculator loans. Those people had no equity or willingness or ability to support or use the property at all. They don't even obtain its value as a place to live. So their default in the early phases of a slowdown must be accepted.
How does that affect the default curve, by which I mean the rate of defaults versus time into an economic slowdown ? Clearly, this effect would cause the curve to have a pronounced leading hump as early defaults as a portion of total defaults would be larger than for a normal slowdown. What is now observed ? Exactly that, the default rate is larger than expected in a normal slowdown and that is causing all sorts of pundits to predict doom and gloom, the "mother of all home price collapses".
I think they miss-interpret the data. They are not recognizing that the elevated default rates compared to a normal correction are elevated now due to the early defaults of the liar loans. Those will soon be exhausted. What happens after that ? Defaults will begin to drop. Now that will be a huge shock to the bears. And the ultra-cautious bulls. What will happen ?
A buying panic will occur as investors look to a return to normal business conditions in the fall and price stocks aginast those earnings. Heck, I think 1000 pts move up is conservative. Priced rationally off 2009 earnings, Dow 15,000 is easily in reach. And the big bank stocks would rally 50%, GOOG goes to 900, etc. :-))))))))
Some dreams come true.
[Hey, I admitted I'm an optimist in the first paragraph.]
Words of the Day - I thought some "O" words would be fun.
"Obstreperous" - adj [$10]
"Obstreperous" means 1. uncontrollably noisy: clamorous; 2. stubbornly defiant: unruly.
Sentence: Huckabee's obstreperous unwillingness to acknowledge his defeat by McCain is likely a selfish tactic to establish himself as the leader of the conservative wing of the party.
"Obtrude" - verb, both intransitive and transitive [$10]
"Obtrude" means 1. (intr) become obtrusive; 2. (trans) thrust forward importunely.
"Oleaginous" - adj. [$10]
"Oleaginous" means 1. of or relating to oil; 2. unctious; oil
Sentence using both: Huckabee obtrudes himself into the conservative movement with the manners of an oleaginous used car salesman.
About Me
- Bunkerman
- I have a pioneer mentality. My wife & I live in the woods - neighbors aren't visible except slightly in winter. Our "bunker" - hehe, really a fine home & barn - has plenty of security. We have four dogs: Krypto (age 9, Kelpie), Ava (age 13, Rat Terrier), Sky (Kelpie, age 5) and Lucky Star (age 1, kelpie). I don't take crap from anyone anymore, having enough resources & gear stocked up to survive in any circumstance. I have three degrees from Harvard including a Ph. D. in a physical science, and an MS in Management from MIT. I worked as an investment banker for about 25 years, mainly in secured finance, at three major Wall Street firms and for the last 17 years with my partners at our own firm. I'm semi-retired now, managing some private corporations and business interests and doing my own trading & investing. This is not to boast, but to give you an idea I know a little about some subjects from experience. The photo is my 1943 M16 half-track which I am restoring. These armored vehicles were ubiquitous in the US Army in World War II and Korea. It's driveable.
92 comments:
interesting argument Oman (finally a post based on reason and facts.....and not that silly ping-pong watering hole nonsense rubbish)
and i tend to agree with the Oman on default rates......however......that is already priced in......yes any uptick will be comsidered as 'bullish' news
but deafult rates are not the problem now......it's the derivative products that are causing the complete annihalation of US bank balance sheets
i'm surprised at the Oman..
..he is the one who has been
yellin and screechin about these
products for years......he's called them bogus and shams........and now he conveniently ignores them to suit his argument
Dear Sal,
You are doing an amazing job for Hillary -- stepping up when she needs you the most. You surpassed the $1.3 million goal President Clinton set, and our "Moment" ad is running in Ohio, Texas, Rhode Island, and Vermont. Now we need your help to expand our buy.
We still face a spending gap on the air with our opponent. Senator Obama is putting everything on the line to win on March 4, and he has virtually unlimited funds. We cannot let his massive war chest be the deciding factor in this race.
Every dollar you give today will make a difference to help Hillary win. Everything that comes in is going right back out to fund critical efforts to get out the vote and put ads like "Moment" on the air
Thank you for your incredible support.
Sincerely,
Terry McAuliffe
Chairman, Hillary Clinton for President
GOOG may go to 900.....or 9000.....i don't know
but what i do know is that the chart is broken and in the near term.....next few weeks ......it is headed lower......looks like 350-400 by the summer to me
darn, lost my post.
I agree derivatives are a problem, causing a freeze and re-thinking my lenders how to operate. But what you forget, Abud, is that for every long in a derivative is a short. They all have opposite positions somewhere. So every loss is another's gain.
That just shifts the losses around, principally the subprime losses. Some lenders benefits while some lose. No net gain or loss occurs, unlike for mortgages or real assets like home prices.
And lenders really do have to make long term debt investments and loans, to meet their long term liabilities. So they must alter behavior - that makes time, but it's just a return to the early 1990s operations. They haven't forgotten how to do that.
I think beefers are hiding big derivatives losses. interestingly, I see some rich are getting tired of wild beefer moves. Why do they take the risk, they wonder.
Hillary spending that $$$ wisely...thousands at Dunkin Donuts...thousands at Krispy Kreme....
By the way, I had my first $100 fill-up. My last fill for the H1 cost $117, 33.5 gallons at $3.50 for diesel.
[not complaining at all, just posting a fact]
uh ... with those thighs, Hillary should avoid the donuts ;-)))
ok, I couldn't resist a sexist joke. But sex should be a normal part of life and not avoided ;-)
ROFL bud.
hildog sending out mailers showing obama dressed as a muslim.
she is slimmy piece of shit! she mite even be more of scum bag that bush!
nice job supporting that abortion she calls presidential run.
so bman with respect to deriviatives u think
"one man gathers what another man spills"
is there anything the GD, dont have answer for.
certainly the lyrics from hunter, barlow, garcia and wier BLOW AWAY the bible, for those looking for answers.
;-)
buds obstreperous posts about hiliary r disgusting.
did i get it right?
oops mccains first lie
Republican presidential candidate John McCain defended his belief that U.S. troops will need to stay in Iraq for decades Monday but said the unpopular war will soon end "for all intents and purposes."
"My friends, the war will be over soon ... for all intents and purposes," Sen. John McCain said Monday.
"My friends, the war will be over soon ... for all intents and purposes, although the insurgency will go on for years and years and years," the Arizona senator said. "But it will be handled by the Iraqis, not by us."
nice inflation #'s
even the BLS cant hide this.
WOW
saw "semi pro" last nite.
better than talladega nights, but certainly no anchorman.
will ferrell is gonna be one rich dude. he is just the silliest person in world. sasha cohen a close 2nd.
leisman "i waited in line to see phil lesh, not to long ago"
lotta heads on cnbc and espn
perfect usage, mern
PPI up 7.4% yoy. personally i dont care about core becuase everyone eats and uses fuel.
GDP is what 1%
is that stagflation?
does bob barbera (economist) read this blog?
he just said on cnbc....."some are sayin this recession will be the worst since the great depression of the 1930s"
One thing you have in your favor re GOOG Bunkerman, is the fact that monkey sell-side analysts are starting to downgrade the stock....It makes sense to reco the stock at $725 and pan it at $500...sheesh...did they learn that stuff at Harvard?
PPI yoy core was just 2.4% - not a problem.
Headling goes to core this year as oil increases will become zero.
lol, mfl.
ya harvard has changed thier degree in finance. now they call getting a BA in "Cramered"
Abud, the GOOG chart was busted at 680 two months ago ... it's a little late to crow about it.
I'm looking at what it can be in the fall 2008 and early 2009 when I can get LT gains treatment.
I wouldn't consider even a small add until 450 since my average price is close to 500.
buy high, sell low. then lie about it. scream and shout that u had everything right but either the fed screwed up or the management screwed up or investors r just wrong.
"im possibly the best trader ever"
he really said that!
2 months ago?...looool..i don't remember what i ate last nite
but if you can't see the break in the GOOG chart yesterday........well..... you do have your head in the sand.....your vision not too good.....i apologize
does joe kernen read this blog?
he just said "is the day of reckoning coming soon?"
bud u think the US will slide into a deep recession or depression while the most of the world is expiercing secular growth like never before?
i remember todd harrison saying in 2000 that it wud take 5 to 7 yrs for the economy to absorb the bubble from the 90s, so did mr buffett. they were both wrong, it only took 3 yrs.
i dont see buffett or toddo saying that anymore.
we r idiots, and really dont understand how the economy works. i think as long as a GS dude is head of the treasury, despite all of elmers foolish behavior from 98 until he "retired", there just seems to be ways to manuever around it.
but i still think this looks and smells like stagflation.
t boone, mite eat his lunch on this short. what happens if oil closes at 120 this yr.
is that stagflation?
bud u see the mailer your girl is sending out?
a sickening move out of desperation, that will cost her even more votes.
but i doubt u r willing to comment on the mailer, becuase u know i am right.
I'm not a trader anymore, but it does seem to me that crowing about a "broken chart" after a 200 pt. drop is a bit cramer-esq ;-))
but I do hope you are minting money with it.
WEST PALM BEACH, Florida (AP) -- An Austrian tourist died Monday after being bitten by a shark while diving near the Bahamas in waters that had been baited with bloody fish parts to attract the predators.
LOL, he deserved to die. i know i prefer to scuba when there r sharks and chum in the water. thats like subbing to AA plus. or using revs picks in the sharkfolio.
Bunkerman...form your post I take it you have no fuel storage...big mistake...I wish your bunker were near mine...when it hit's the fan I would take your gold, silver and your women...easy target indeed.
where is the GOOG double load print?
odds bud comments on hildogs, obama mailer, suggesting he is a muslim?
im betting 5%
if it gets to 400, I might add 50% to my position.
No double load in sight. I'm just not watching it. All I care is for it to get to 900 mext summer, which I feel confident will happen.
It's no big deal. Sheesh, if a $50 stock goes to $45, who would crow ?
is GOOG the only stock you guys trade?
enuff with the posts on it
sheeeeeeeeeeeesh
uh Oman........i crow when i make 10cents
i am but a simple working man.......i'm not an ultrarich elite like you
Bud visit the local rub and tug sir....have one on me....your nerves are frayed it appears...
lol Abud. Not ultra-rich or even super rich but am solidly in the Filet Mignon & Champagne catagory.
IBM raises outlook ... hmmm ... unusualy behavior for a capital goods maker in a ... recession.
PTEC a taste today...great looking chart...it is trading thinner than Bud's skin.
Bunkerman how often do have dinner at your country club sir?
odds bud comments on hildogs desperate slam suggest obama is a muslim.
now down to 1%
i take the silence as aknowledgement he agrees that it was about the slimmest thing we have seen in these primaries.
lol, mfl. I am not a member of any coutry club. I do not play golf or tennis. I am not a swimmer. I have no middle class or upper class sports or hobbies. But I am in two rifle+pistol_more clubs, aka "sportsmens clubs"
Those are very blue collar places - where the common man enjoys plinking, etc..
I actually almost never eat out. I just don't like it.
But take-home sushi, I try to have once or twice a week :-))
we have eaten twice at our country club.
to take a line from rodney in caddyshack.
"tell the chef this is low grade dog food, i can see where the jockey whipped this thing"
im being told hunters green is the new money crowd in "new tampa" aka crackerville, aka we still think slavery shud exist, aka evolution is a myth.
well the new money crowd is more obnoxious than i am, which aint easy.
on my bday was at wateringhole. i dont think i paid for a beer, but probably threw down a case, solid. i blacked out nicely. but i do remember near the end, engaging in a conversation with someone i never met. we were talking loudly and there was a regular between us. for some reason we started to talk about my bald head. then we went off on a tangent about how stupid combover r.
the regular then moved. we then noticed he had about the worse comb over ever. both of us basically started pointing and LOL at him. then he left.
ROFL
well, I admit to being a member of the Harvard Club of New York City and the New York Athletic Club. I used to work full time in NYC and became a member to use them to relax, workout and for business entertainment. I kept them up since I travel to NYC every month or two.
Harvard Club...lmaooooo....nary a common man carousing those hallowed halls.....
i dont know mfl.
i think luzak still lives at home with his parents.
wonder what they think of that decision? free ride to duke, stanford, every college in america. but went to harvard instead. got a degree in economics, that is collecting dust for 100 grand.
TWM...defense defense defense...a ten cent word Bunkerman...look it up :)
Isn't that French, frosty ? I remember seeing that word in Freech in airplanes. "defense de fumer" or something like that.
everytime the tape goes up 100 handles bud gets real quiet. i wonder y?
and no response to what the hildog did. she makes me vomit!
die hildog die! and take bill with u!
Bud is probably minting money being short 1000 GOOG
LOL yes it is Bunkerman...the french also built a fine tank, but the transmission has only one gear...reverse.
lmaooooooooo 'blue collar'
ya.....charlton heston and dick cheney.......two good'ole fashion blue collar gun-carrying scumbags.....uh....i meant 'sportsmen'
Oman is a phony........he's got you guys fooled....but not me
ya u just fooled by hildog.
trying to depict obama as a muslim?
can she stoop any lower?
and what a wonderful role model for the young ladys.
its ok if your hubby cheats, as long as he helps your career.
at least u can write off your donations to paying her vig off.
come on bud, strap a set balls on and defend her actions!
or just put another tampon in and start crying. have a pon pon and watch oprah.
opps she is backing obama now. guess u stopped watching her.
rofllllll
I find myself drooling like Bud at the gay caberat when I look at this move in AIG...liars and cheaters indeed.
IBM buyback buy buy buy...Bunkerman, you must be thinking this move is designed to help the common man...I say, how else can management unload their options if they are under water below par...I guess there is always back dating.
LOL
bud im waiting!
either strap a set of balls on or admit she is lying disgusting pig that shud be bounced from the senate. i think i have spent more time in NY than her.
jeff cooper has a very interesting column today about S and P headed to 1440 in the next couple weeks.........i like jeff....i've made money listening to him........shorts were gettin real easy......so i tend to agree with him......i think ABK/MBI bailout is imminent
PS.....you sure got a big mouth frosty.............do you also have a wide stance?
how do you say it again frosty?
'touch em'all bud'
yes i will....flap down ....jeffrey leonard style
lmaooooooooooooooooooooo
come bud, dont u want to play?
here is your big chance to explain hiliarys desperate attempt to paint obama as a muslim.
i wud think since your r pakistanny, that wud offend u, no?
I just wanted to give Mern a lesson in how to smoke you out Bud...later I will be holding class for Bunkerman...subject etymology.
well i guess the rockets will be out of the hunt. yao ming is done for the yr.
id love to see AI and nuggets come in 8th and beat the 1 seed as long as it aint the suns, which i doubt.
cant nash give shag a free throw lesson or two.
will ferrells character shot underhanded foul shots in "semi pro". ive thought for sometime shaq shud do that. with his wing span, that is practically a lay up, just need a little arc.
that one handed dart he chucks up there is a disgrace. he wud have 3 more rings if he cud shot 65% from the line.
i think bud is smart enuff to know when i talk smack about his bitch, he knows im right and doesnt take da bait.
right now im leaning on obama. i got money on him, but was ready to vote for mccain, until i saw his bs about iraq yesterday.
ill likely make my decision on obama vs mccain the week of the election. it is that close for this independent.
"Bud's smart enough"...Mern you truely are an ameture....I mean an independent
Hmmm ... that $10 word needs a sentence ... "In his "Word of the Day, Bunkerman provides only defintions and exemplar sentences, not word entymolgies."
gosh, silver way over $18. I hope it holds up until Friday so I can lug some to my metal dealer.
beefers painting a little ahead of schedule due to Ben on the hill...rally killer indeed.
Bunkerman...this VISA ipo another peice of the puzzle for the fins...JPM owns 23%, BAC must be near that...the problem is the sucking sound we likely hear as cash comes out of other sectors as these theifs serve up the blue plate to the common man...have you done any research.
no re visa. true re BAC ... they were the original visa card - the "bankamericard"
there's so much cash on the sidelines, frosty, I think no "sucking sound"
while working out was watching herbie hancock "possibilities" or something like that. he was jamming with trey from phish. trey was lead vocalist and lead guitarist for phish.
that is the kind of music i love. no singing and they were just creating tracks on the fly.
herbie was getting a tad annoyed with trey becuase trey wasnt getting "out of his comfort zone" then herbie said "that is where it is at, when u get out of your comfort zone"
totally agree, and thats why i love the jam bands. thats why lotta dead heads love 1977 so much. that was the yr jerry, for whatever reason, was just taking huge risks every nite. he probably felt he had to becuase kieth was falling asleep at his piano, so they bounced him about a yr later, and thankfully took his wife donna with him. boy she wud just ruin tunes with her shrilling.
in a perfect world the dead wud have had a 1977 jerry, with the rest of the band playing at their peak in the lates 80s. through in joan osborne, and then the bunkermans of the world wud even appreciate the melodies she brings to the tables.
im going to a huge festival in april. bobby gonna be there, and the allmans, plus a few others i really like. at lake sunawee near gainesville. that shud be religious!
I wonder if the ultimate super beefer GS is going to announce a writedown...it trades very poorly....
Wu Tang Financial...cash rules all...dollar dollar bill yall....you gotta know how to jack this shit, you gotta' play this game ruff, in, out, give, grab, bonk...Bunkerman, just in case you need a home for those silver profits.
nah frosty ... all is well ;-) ... buying stocks with the silver cash.
Trivia: what movie was that "all is well" statement profoundly made ? ;-)
Wu Tang financial
LOL
where is spinny today? guess he doesnt want to see my bald head. oh well, i know im grating, just ask my worden.
I have no idea Dean Wormer
my cucumber is bigger than yours.
why thats funny i have a husband named dean wormer, u still wanna show me your cucumber????????
if i was spin.....i'd move to an 'undisclosed location' till you long gone from PA
looks like bud and most of the east coast of florida lost there power.
that is always fun when u day trade to make the do ray me.
did u lose your power?
bud
oh come on bud, outside of my stinky farts, was i really that bad?
;-)
hiliary has one shot tonite.
if she doesnt say a word and show some kankles, she mite get texas.
she says a word, its a dirt nap for biliary
wow im surprised i didnt lose my power, it even hit tampa
MLF59 I think the answer to your question is yes and/or they are on the wrong side of the infaltion trade...mike "Mish" shedlock...mish global, a respected beefer suspects that VIE's at C could be worth as little as .27 on the buck...GS is also a suspect ie VIE's...more alpha bit soup yet to be heard on cnbc.
cramer suggesting GS looks really bad.
time to buy some?
more snow here ... endless winter, like 1816 from memory ;-)
GS which has yet to take any of the $163 biilion reconized industry losses, indicated last week that VIE losses of 11.1 billion are possible...tip of the spear is Mish's thesis.
Spinny...when you meet Mern for a Rock, keep an eye out for a young looking Sam Zell in scoccer shorts, that will be the man himself.
Mish? VIE? huh?
what the f are you talkin about frosty??
you're a janitor.......bathroom #7 needs a scrubbing
#7....mr creig in the house?...wide stance indeed.
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