[DaCounselor]

davelj you pretty much have it down. AIG has a ton of diversified assets, but the important question is what could those assets bring in a quick sale to boost AIG’s immediate liquidity problems. What their books say they are worth and even what third party estimates of asset values are do not answer the specific question of immediate valuation by prospective purchasers. In fact, we are indeed given a clue as to valuation in relation to risk assumption by the lack of scavenging of AIG’s assets, which speaks volumes.

No offense to anyone but I do business with AIG and I can assure that things are not “fine”. This massive beast has been ravaged in the market and I certainly would not characterize their loss of 95% of their market value as an indication that things are fine. They have diversified assets but again they must be sold to raise funds and where are the buyers? I do think AIG will survive, with assistance, but things are not fine.

As for a FFR cut, I still believe we will end up at 1.5% before the Fed begins tightening but I’m not so sure we will see a cut this year. The typical strategy has been to mix jawboning with some actual tangible intervention to keep things propped us as best they can. I do think we will see things get dire to point where the jawboning and intervention will not be enough to stave off a capitulation spiral, which is when the cuts get thrown at the problem. I quess we’ll see. No question there’s going to be alot more bad news coming.

[DaCounselor]

davelj you pretty much have it down. AIG has a ton of diversified assets, but the important question is what could those assets bring in a quick sale to boost AIG’s immediate liquidity problems. What their books say they are worth and even what third party estimates of asset values are do not answer the specific question of immediate valuation by prospective purchasers. In fact, we are indeed given a clue as to valuation in relation to risk assumption by the lack of scavenging of AIG’s assets, which speaks volumes.

No offense to anyone but I do business with AIG and I can assure that things are not “fine”. This massive beast has been ravaged in the market and I certainly would not characterize their loss of 95% of their market value as an indication that things are fine. They have diversified assets but again they must be sold to raise funds and where are the buyers? I do think AIG will survive, with assistance, but things are not fine.

As for a FFR cut, I still believe we will end up at 1.5% before the Fed begins tightening but I’m not so sure we will see a cut this year. The typical strategy has been to mix jawboning with some actual tangible intervention to keep things propped us as best they can. I do think we will see things get dire to point where the jawboning and intervention will not be enough to stave off a capitulation spiral, which is when the cuts get thrown at the problem. I quess we’ll see. No question there’s going to be alot more bad news coming.

[DaCounselor]

davelj you pretty much have it down. AIG has a ton of diversified assets, but the important question is what could those assets bring in a quick sale to boost AIG’s immediate liquidity problems. What their books say they are worth and even what third party estimates of asset values are do not answer the specific question of immediate valuation by prospective purchasers. In fact, we are indeed given a clue as to valuation in relation to risk assumption by the lack of scavenging of AIG’s assets, which speaks volumes.

No offense to anyone but I do business with AIG and I can assure that things are not “fine”. This massive beast has been ravaged in the market and I certainly would not characterize their loss of 95% of their market value as an indication that things are fine. They have diversified assets but again they must be sold to raise funds and where are the buyers? I do think AIG will survive, with assistance, but things are not fine.

As for a FFR cut, I still believe we will end up at 1.5% before the Fed begins tightening but I’m not so sure we will see a cut this year. The typical strategy has been to mix jawboning with some actual tangible intervention to keep things propped us as best they can. I do think we will see things get dire to point where the jawboning and intervention will not be enough to stave off a capitulation spiral, which is when the cuts get thrown at the problem. I quess we’ll see. No question there’s going to be alot more bad news coming.

[DaCounselor]

davelj you pretty much have it down. AIG has a ton of diversified assets, but the important question is what could those assets bring in a quick sale to boost AIG’s immediate liquidity problems. What their books say they are worth and even what third party estimates of asset values are do not answer the specific question of immediate valuation by prospective purchasers. In fact, we are indeed given a clue as to valuation in relation to risk assumption by the lack of scavenging of AIG’s assets, which speaks volumes.

No offense to anyone but I do business with AIG and I can assure that things are not “fine”. This massive beast has been ravaged in the market and I certainly would not characterize their loss of 95% of their market value as an indication that things are fine. They have diversified assets but again they must be sold to raise funds and where are the buyers? I do think AIG will survive, with assistance, but things are not fine.

As for a FFR cut, I still believe we will end up at 1.5% before the Fed begins tightening but I’m not so sure we will see a cut this year. The typical strategy has been to mix jawboning with some actual tangible intervention to keep things propped us as best they can. I do think we will see things get dire to point where the jawboning and intervention will not be enough to stave off a capitulation spiral, which is when the cuts get thrown at the problem. I quess we’ll see. No question there’s going to be alot more bad news coming.

[DaCounselor]

Great post DWCAP re the definition of “middle class”. In addition to what I believe are changes in the parameters of the defined “class” over generations, I think you could ask 10 different people today how they define middle class and probably get 10 different parameters.

It goes without saying (but i’ll say it anyway) that class definitions seem to be tied by many observers to visible material possessions and lifestyle actions as opposed to stock portfolio balances and personal net worth. Back in the day of more limited credit availability, people were essentially forced to live within parameters set by their income. With the advent of the age of easy credit, it became increasingly easier to magically transform oneself up a level or two in class, in terms of visible class indicators, that is.

So now we have these huge numbers of people who have been using credit to raise their visible class standing, which for many has acted as a detriment to their actual net worth. Ironically, the inevitable ‘come to Jesus’ moments facing many of these folks will come to pass and may deposit them back at a class lower than where they started. What a journey.

Which leaves me with the question that dove tails into DWCAP’s commentary – what is “middle class”? Is a family with two newer cars, with a 42″ flat screen, eat out once a week, one two week vacation a year involving air travel, blah blah blah – is that middle class? What if the same family has a negative net worth? Can they still be middle class?

I think class definitions are almost irrecovably tainted, especially when viewed through the eyes of the younger generation, due to the over-consumption of the typical American, the Age of Entitlement effect, the keeping up with the Jones mentality, etc. In this instance, perception is most certainly not reality.

[DaCounselor]

Great post DWCAP re the definition of “middle class”. In addition to what I believe are changes in the parameters of the defined “class” over generations, I think you could ask 10 different people today how they define middle class and probably get 10 different parameters.

It goes without saying (but i’ll say it anyway) that class definitions seem to be tied by many observers to visible material possessions and lifestyle actions as opposed to stock portfolio balances and personal net worth. Back in the day of more limited credit availability, people were essentially forced to live within parameters set by their income. With the advent of the age of easy credit, it became increasingly easier to magically transform oneself up a level or two in class, in terms of visible class indicators, that is.

So now we have these huge numbers of people who have been using credit to raise their visible class standing, which for many has acted as a detriment to their actual net worth. Ironically, the inevitable ‘come to Jesus’ moments facing many of these folks will come to pass and may deposit them back at a class lower than where they started. What a journey.

Which leaves me with the question that dove tails into DWCAP’s commentary – what is “middle class”? Is a family with two newer cars, with a 42″ flat screen, eat out once a week, one two week vacation a year involving air travel, blah blah blah – is that middle class? What if the same family has a negative net worth? Can they still be middle class?

I think class definitions are almost irrecovably tainted, especially when viewed through the eyes of the younger generation, due to the over-consumption of the typical American, the Age of Entitlement effect, the keeping up with the Jones mentality, etc. In this instance, perception is most certainly not reality.

[DaCounselor]

Great post DWCAP re the definition of “middle class”. In addition to what I believe are changes in the parameters of the defined “class” over generations, I think you could ask 10 different people today how they define middle class and probably get 10 different parameters.

It goes without saying (but i’ll say it anyway) that class definitions seem to be tied by many observers to visible material possessions and lifestyle actions as opposed to stock portfolio balances and personal net worth. Back in the day of more limited credit availability, people were essentially forced to live within parameters set by their income. With the advent of the age of easy credit, it became increasingly easier to magically transform oneself up a level or two in class, in terms of visible class indicators, that is.

So now we have these huge numbers of people who have been using credit to raise their visible class standing, which for many has acted as a detriment to their actual net worth. Ironically, the inevitable ‘come to Jesus’ moments facing many of these folks will come to pass and may deposit them back at a class lower than where they started. What a journey.

Which leaves me with the question that dove tails into DWCAP’s commentary – what is “middle class”? Is a family with two newer cars, with a 42″ flat screen, eat out once a week, one two week vacation a year involving air travel, blah blah blah – is that middle class? What if the same family has a negative net worth? Can they still be middle class?

I think class definitions are almost irrecovably tainted, especially when viewed through the eyes of the younger generation, due to the over-consumption of the typical American, the Age of Entitlement effect, the keeping up with the Jones mentality, etc. In this instance, perception is most certainly not reality.

[DaCounselor]

Great post DWCAP re the definition of “middle class”. In addition to what I believe are changes in the parameters of the defined “class” over generations, I think you could ask 10 different people today how they define middle class and probably get 10 different parameters.

It goes without saying (but i’ll say it anyway) that class definitions seem to be tied by many observers to visible material possessions and lifestyle actions as opposed to stock portfolio balances and personal net worth. Back in the day of more limited credit availability, people were essentially forced to live within parameters set by their income. With the advent of the age of easy credit, it became increasingly easier to magically transform oneself up a level or two in class, in terms of visible class indicators, that is.

So now we have these huge numbers of people who have been using credit to raise their visible class standing, which for many has acted as a detriment to their actual net worth. Ironically, the inevitable ‘come to Jesus’ moments facing many of these folks will come to pass and may deposit them back at a class lower than where they started. What a journey.

Which leaves me with the question that dove tails into DWCAP’s commentary – what is “middle class”? Is a family with two newer cars, with a 42″ flat screen, eat out once a week, one two week vacation a year involving air travel, blah blah blah – is that middle class? What if the same family has a negative net worth? Can they still be middle class?

I think class definitions are almost irrecovably tainted, especially when viewed through the eyes of the younger generation, due to the over-consumption of the typical American, the Age of Entitlement effect, the keeping up with the Jones mentality, etc. In this instance, perception is most certainly not reality.

[DaCounselor]

Great post DWCAP re the definition of “middle class”. In addition to what I believe are changes in the parameters of the defined “class” over generations, I think you could ask 10 different people today how they define middle class and probably get 10 different parameters.

It goes without saying (but i’ll say it anyway) that class definitions seem to be tied by many observers to visible material possessions and lifestyle actions as opposed to stock portfolio balances and personal net worth. Back in the day of more limited credit availability, people were essentially forced to live within parameters set by their income. With the advent of the age of easy credit, it became increasingly easier to magically transform oneself up a level or two in class, in terms of visible class indicators, that is.

So now we have these huge numbers of people who have been using credit to raise their visible class standing, which for many has acted as a detriment to their actual net worth. Ironically, the inevitable ‘come to Jesus’ moments facing many of these folks will come to pass and may deposit them back at a class lower than where they started. What a journey.

Which leaves me with the question that dove tails into DWCAP’s commentary – what is “middle class”? Is a family with two newer cars, with a 42″ flat screen, eat out once a week, one two week vacation a year involving air travel, blah blah blah – is that middle class? What if the same family has a negative net worth? Can they still be middle class?

I think class definitions are almost irrecovably tainted, especially when viewed through the eyes of the younger generation, due to the over-consumption of the typical American, the Age of Entitlement effect, the keeping up with the Jones mentality, etc. In this instance, perception is most certainly not reality.

[DaCounselor]

My original post was in response to CA Renter’s (an admitted bear since 2001) post regarding being early is not necessarily being wrong. I disagree for the reasons I have already stated.

Looking across San Diego, homes in many areas are still selling at much, much higher prices than in ’01. So the housing bear who called the top in’01 and sat it out has missed that boat. Again (and I promise, for the last time), that person could if they so desired list that house for below current comps, sell it quick and walk away with a pile of money. The guy who didn’t buy can’t do this. Which guy would you rather be?

[DaCounselor]

My original post was in response to CA Renter’s (an admitted bear since 2001) post regarding being early is not necessarily being wrong. I disagree for the reasons I have already stated.

Looking across San Diego, homes in many areas are still selling at much, much higher prices than in ’01. So the housing bear who called the top in’01 and sat it out has missed that boat. Again (and I promise, for the last time), that person could if they so desired list that house for below current comps, sell it quick and walk away with a pile of money. The guy who didn’t buy can’t do this. Which guy would you rather be?

[DaCounselor]

My original post was in response to CA Renter’s (an admitted bear since 2001) post regarding being early is not necessarily being wrong. I disagree for the reasons I have already stated.

Looking across San Diego, homes in many areas are still selling at much, much higher prices than in ’01. So the housing bear who called the top in’01 and sat it out has missed that boat. Again (and I promise, for the last time), that person could if they so desired list that house for below current comps, sell it quick and walk away with a pile of money. The guy who didn’t buy can’t do this. Which guy would you rather be?

[DaCounselor]

My original post was in response to CA Renter’s (an admitted bear since 2001) post regarding being early is not necessarily being wrong. I disagree for the reasons I have already stated.

Looking across San Diego, homes in many areas are still selling at much, much higher prices than in ’01. So the housing bear who called the top in’01 and sat it out has missed that boat. Again (and I promise, for the last time), that person could if they so desired list that house for below current comps, sell it quick and walk away with a pile of money. The guy who didn’t buy can’t do this. Which guy would you rather be?

[DaCounselor]

My original post was in response to CA Renter’s (an admitted bear since 2001) post regarding being early is not necessarily being wrong. I disagree for the reasons I have already stated.

Looking across San Diego, homes in many areas are still selling at much, much higher prices than in ’01. So the housing bear who called the top in’01 and sat it out has missed that boat. Again (and I promise, for the last time), that person could if they so desired list that house for below current comps, sell it quick and walk away with a pile of money. The guy who didn’t buy can’t do this. Which guy would you rather be?

[DaCounselor]

“I’m from the “being early is being wrong” school. Instead of calling a top in ’01, anyone who bought then is likely to still have a tremendous return on their investment.
________________________

Only if they sold!
________________________

Nope. Most people who are still holding an ’01 purchase are still way up. Like I said in my earlier post, they could probably discount their property today to sell it fast and still be way up. There is really no way around the fact that someone who called the top in ’01 and therefore decided not to buy then has missed out on making a large pile of money.

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