Credit Bubble Bulletin, by Doug Noland

[POZ]

LA_RENTER,

I am neither a PHD economist, Investment banker, nor financial guru by any stretch of the imagination and I have the same feeling in my gut. I am simply your average (non-kool-aid drinking) consumer being squeezed out of every cent. If you dont mind my asking, what is your background and experience in finance and economics that leads to make such dire predictions?

Regards,

Paulo

[POZ]

LA_RENTER,

I am neither a PHD economist, Investment banker, nor financial guru by any stretch of the imagination and I have the same feeling in my gut. I am simply your average (non-kool-aid drinking) consumer being squeezed out of every cent. If you dont mind my asking, what is your background and experience in finance and economics that leads to make such dire predictions?

Regards,

Paulo

[davelj]

That commentary isn’t LA_Renter’s, it’s from Doug Noland over at Prudentbear.com. I think the confusion is that quotation marks aren’t present in the posts.

[davelj]

That commentary isn’t LA_Renter’s, it’s from Doug Noland over at Prudentbear.com. I think the confusion is that quotation marks aren’t present in the posts.

[davelj]

That commentary isn’t LA_Renter’s, it’s from Doug Noland over at Prudentbear.com. I think the confusion is that quotation marks aren’t present in the posts.

[temeculaguy]

Epic Post!!! I was concerned a few weeks ago, now I’m scared. There were a lot of those “careful what you wish for” posts in the past few months, why do I have this sinking feeling that the storm that’s brewing may be more than even us bears were prepared for.

[temeculaguy]

Epic Post!!! I was concerned a few weeks ago, now I’m scared. There were a lot of those “careful what you wish for” posts in the past few months, why do I have this sinking feeling that the storm that’s brewing may be more than even us bears were prepared for.

[temeculaguy]

Epic Post!!! I was concerned a few weeks ago, now I’m scared. There were a lot of those “careful what you wish for” posts in the past few months, why do I have this sinking feeling that the storm that’s brewing may be more than even us bears were prepared for.

[Mark Holmes]

Yeah, that makes me very nervous. I’ve been reading Doug Noland’s bulletins for years, and while he has always been very, very bearish, this is new territory for him as far as I can recall. I don’t believe he has ever said the credit bubble has popped. What makes me even more nervous is scanning both web and mainstream media today and seeing some really dire predictions. Monday and Tuesday should be interesting… and will Bernanke weigh in at some point? I’m guessing probably not, at least until there has been a market drop over 10%. Realistically, he probably should let this correction run its course. But while I’ve felt for quite a while that we were overdue for a correction at some point, this is a harbinger of something much worse. Watching the news…

[Mark Holmes]

Yeah, that makes me very nervous. I’ve been reading Doug Noland’s bulletins for years, and while he has always been very, very bearish, this is new territory for him as far as I can recall. I don’t believe he has ever said the credit bubble has popped. What makes me even more nervous is scanning both web and mainstream media today and seeing some really dire predictions. Monday and Tuesday should be interesting… and will Bernanke weigh in at some point? I’m guessing probably not, at least until there has been a market drop over 10%. Realistically, he probably should let this correction run its course. But while I’ve felt for quite a while that we were overdue for a correction at some point, this is a harbinger of something much worse. Watching the news…

[Mark Holmes]

Yeah, that makes me very nervous. I’ve been reading Doug Noland’s bulletins for years, and while he has always been very, very bearish, this is new territory for him as far as I can recall. I don’t believe he has ever said the credit bubble has popped. What makes me even more nervous is scanning both web and mainstream media today and seeing some really dire predictions. Monday and Tuesday should be interesting… and will Bernanke weigh in at some point? I’m guessing probably not, at least until there has been a market drop over 10%. Realistically, he probably should let this correction run its course. But while I’ve felt for quite a while that we were overdue for a correction at some point, this is a harbinger of something much worse. Watching the news…

[LA_Renter]

“That commentary isn’t LA_Renter’s, it’s from Doug Noland over at Prudentbear.com”

Thanks for pointing that out Dave. I am not the author. I should have made that more obvious on the post. I posted this because Roland while being bearish never sounded like this before. And as HereWeGo pointed out Roland indicates this is hitting from the top down as much as it is the bottom up. The credit contraction as it stands now will impact the high end of the market especially California. Think about it, the loans that make California home prices possible have been pulled from the market, or will be available at much higher rates. This is Huge.

[LA_Renter]

“That commentary isn’t LA_Renter’s, it’s from Doug Noland over at Prudentbear.com”

Thanks for pointing that out Dave. I am not the author. I should have made that more obvious on the post. I posted this because Roland while being bearish never sounded like this before. And as HereWeGo pointed out Roland indicates this is hitting from the top down as much as it is the bottom up. The credit contraction as it stands now will impact the high end of the market especially California. Think about it, the loans that make California home prices possible have been pulled from the market, or will be available at much higher rates. This is Huge.

[LA_Renter]

“That commentary isn’t LA_Renter’s, it’s from Doug Noland over at Prudentbear.com”

Thanks for pointing that out Dave. I am not the author. I should have made that more obvious on the post. I posted this because Roland while being bearish never sounded like this before. And as HereWeGo pointed out Roland indicates this is hitting from the top down as much as it is the bottom up. The credit contraction as it stands now will impact the high end of the market especially California. Think about it, the loans that make California home prices possible have been pulled from the market, or will be available at much higher rates. This is Huge.

[davelj]

We are at one of those fairly rare moments – “THE MOMENT” – in an economic/credit cycle. While I think it’s unlikely, the bulls could stampede tomorrow and take the market(s) up 2% with the logic(?) that, “things are so bad that the Fed will be forced to lower rates soon, so things will be GRRRRRRRRRRREAT [with deference to Tony the Tiger] in ’08!!” This is the old “good news is good news, and bad news is good news; ergo, all news is good news” weltanshauung. This has been the prevailing bull market thesis for the past few years up until the last two weeks. And make no mistake, it has worked marvelously.

Now comes the test. The market’s been smacked around, the news has been really dire over the last couple of days and the question is: Can the bulls take this thing up or do they throw in the towel? I think we could see a 3%-5% down day tomorrow – a real panic sell-off. There is so much risk that still needs to be offloaded before anyone gets comfortable.

My bet is that we are substantially down tomorrow and then down even more on Tuesday when Bernanke doesn’t lower rates (although I’m sure the “language” will be a bit more dove-ish). But, again, the bulls have been so persistently… well… bullish that it’s hard to keep these nutjobs down. Regardless, it will probably be a very big move in one direction or the other. While I’m not a trader, my preference is for it to be down. But given the persistence of the bulls, in general, nothing surprises me anymore.

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