[LA_Renter]

I once heard somebody say it’s a recession if you have a job, it’s a depression if you don’t. I had to look for a job in a mild recession once and trust me I do not wish that on anybody. I totally agree with Temeculaguy and the hurricane analogy. It’s not like I’m sitting at the beach thinking “man, I wish there was a big hurricane that would hit this place and rip it to shreds”. It’s just the fact that these things (hurricanes, earthquakes, recessions, etc) happen. There is a distinct difference between being a realist and a pessimist.

[LA_Renter]

I once heard somebody say it’s a recession if you have a job, it’s a depression if you don’t. I had to look for a job in a mild recession once and trust me I do not wish that on anybody. I totally agree with Temeculaguy and the hurricane analogy. It’s not like I’m sitting at the beach thinking “man, I wish there was a big hurricane that would hit this place and rip it to shreds”. It’s just the fact that these things (hurricanes, earthquakes, recessions, etc) happen. There is a distinct difference between being a realist and a pessimist.

[LA_Renter]

I think one of the most fascinating things to watch over the past 18 months has been the Home Builders. The institutions are the majority holders of those companies, KBH, TOL, HOV, etc. The housing bears correctly saw blood in the water and placed short positions, the stocks began their decline but not without some major acrobatic swing trades. You could see the stock price move down which attracted retail shorts and then the institutions would just lower the hammer and squeeze. Rinse. Repeat. You can see how they mine their money out of a falling sector. I think thats what you have been seeing with the recent rally in the stock market. There is a record amount of short interest in the market and the big boys decided to throw some money in and squeeze the shorts. They did a pretty good job.

[LA_Renter]

I think one of the most fascinating things to watch over the past 18 months has been the Home Builders. The institutions are the majority holders of those companies, KBH, TOL, HOV, etc. The housing bears correctly saw blood in the water and placed short positions, the stocks began their decline but not without some major acrobatic swing trades. You could see the stock price move down which attracted retail shorts and then the institutions would just lower the hammer and squeeze. Rinse. Repeat. You can see how they mine their money out of a falling sector. I think thats what you have been seeing with the recent rally in the stock market. There is a record amount of short interest in the market and the big boys decided to throw some money in and squeeze the shorts. They did a pretty good job.

[LA_Renter]

Chris, I agree with DaCounselor, keep posting all of us need our point of views challenged IMO. After re reading the posts i don’t think we are too far off. Yes if you were bearish on the market this year you have been wrong to this point, you are correct. I used the illustration showing stock market performance converted to inflation adjusted dollars and gold to show what a rising market looks like when the currency that market is valued in is falling. The point I’m making is not so much using these as a tool to invest but to show that the US economy is not roaring like many pundits would have you believe. In essence I’m defending the bears because many of their assumptions have played out, the housing slump has slowed the economy, the consumer is showing signs of slowing, and retail is punk except for higher food prices at Walmart. The Fed is also lowering their GDP forecast for 07/08 as of this week (expect more of this). Hopefully it won’t be as bad as the NAR revising their forecast every month. In the face of a strong global economy that is putting more pressure on the dollar. What caught the bears off guard was the strong global economy and the exposure of multinational companies in those markets that are in the S&P and Dow plus the vast amount of liquidity sloshing around with too few places to go. i guess my response to you was more centered on the actual US economy verses stock market performance. The markets can be very humbling.

[LA_Renter]

Chris, I agree with DaCounselor, keep posting all of us need our point of views challenged IMO. After re reading the posts i don’t think we are too far off. Yes if you were bearish on the market this year you have been wrong to this point, you are correct. I used the illustration showing stock market performance converted to inflation adjusted dollars and gold to show what a rising market looks like when the currency that market is valued in is falling. The point I’m making is not so much using these as a tool to invest but to show that the US economy is not roaring like many pundits would have you believe. In essence I’m defending the bears because many of their assumptions have played out, the housing slump has slowed the economy, the consumer is showing signs of slowing, and retail is punk except for higher food prices at Walmart. The Fed is also lowering their GDP forecast for 07/08 as of this week (expect more of this). Hopefully it won’t be as bad as the NAR revising their forecast every month. In the face of a strong global economy that is putting more pressure on the dollar. What caught the bears off guard was the strong global economy and the exposure of multinational companies in those markets that are in the S&P and Dow plus the vast amount of liquidity sloshing around with too few places to go. i guess my response to you was more centered on the actual US economy verses stock market performance. The markets can be very humbling.

[LA_Renter]

Chris, there is also a saying that “the market can stay irrational longer than you can stay solvent”. The Nasdaq wasn’t exactly correct when it climbed from 4000 to 5000 in 99/00. I was one of the people getting into sync with that market and i learned a lesson I will never forget. Markets can be wrong and always correct. I am sure you agree with that statement. Personally I don’t feel good about this run and I would like to point out that the bears aren’t all that wrong up to this point. We are all mesmerized by the current run in the stock market but the very bearish gold bugs are celebrating with everybody else. The price of gold pushed over 670 and could go on a run. There is something wrong with that. I keep hearing the term Goldlocks economy and this looks nothing like it. Here is one definition of where that term came from

‘Goldilocks was the nickname given to the soft-landing in 1995 that kicked off one of the biggest 5-year bull runs in the equity market in history. That soft landing consisted of a slowdown in growth along with a corresponding falling rate of inflation that allowed the Fed to ease, cushion the economy’s landing and thereby avoid a recession.

The result back in 1995 was that commodities turned down despite economic growth continuing at a healthy, yet slower pace in the US. Corporate profit growth continued to rise. Long-term interest rates followed the Fed’s lead and fell, and earnings multiples on equities expanded as the Fed lowered interest rates and made money “cheaper.” The resulting positive financial flows into the equity market and bond market also helped to rally the dollar, as dollars from overseas were “re-invested” back into US financial assets. It truly was a Hollywood-ending”

Now contrast that with today, the dollar is at a 30 year low (dangerously testing 80 super support), gold has pushed over 670, we have $75 oil, and a gallon of milk cost over $4. Check out this link to see what the stock market looks like adjusted for today’s dollars and gold.

http://www.kitco.com/ind/B_Hunt/jun052007.html

Now what the markets seem to be telling us right now is that we have inflation. When you have gold bugs over in the corner clicking champagne glasses exactly how much of a bull market is this??

[LA_Renter]

Chris, there is also a saying that “the market can stay irrational longer than you can stay solvent”. The Nasdaq wasn’t exactly correct when it climbed from 4000 to 5000 in 99/00. I was one of the people getting into sync with that market and i learned a lesson I will never forget. Markets can be wrong and always correct. I am sure you agree with that statement. Personally I don’t feel good about this run and I would like to point out that the bears aren’t all that wrong up to this point. We are all mesmerized by the current run in the stock market but the very bearish gold bugs are celebrating with everybody else. The price of gold pushed over 670 and could go on a run. There is something wrong with that. I keep hearing the term Goldlocks economy and this looks nothing like it. Here is one definition of where that term came from

‘Goldilocks was the nickname given to the soft-landing in 1995 that kicked off one of the biggest 5-year bull runs in the equity market in history. That soft landing consisted of a slowdown in growth along with a corresponding falling rate of inflation that allowed the Fed to ease, cushion the economy’s landing and thereby avoid a recession.

The result back in 1995 was that commodities turned down despite economic growth continuing at a healthy, yet slower pace in the US. Corporate profit growth continued to rise. Long-term interest rates followed the Fed’s lead and fell, and earnings multiples on equities expanded as the Fed lowered interest rates and made money “cheaper.” The resulting positive financial flows into the equity market and bond market also helped to rally the dollar, as dollars from overseas were “re-invested” back into US financial assets. It truly was a Hollywood-ending”

Now contrast that with today, the dollar is at a 30 year low (dangerously testing 80 super support), gold has pushed over 670, we have $75 oil, and a gallon of milk cost over $4. Check out this link to see what the stock market looks like adjusted for today’s dollars and gold.

http://www.kitco.com/ind/B_Hunt/jun052007.html

Now what the markets seem to be telling us right now is that we have inflation. When you have gold bugs over in the corner clicking champagne glasses exactly how much of a bull market is this??

[LA_Renter]

By the way the dollar is just crumbling right now. I imagine Ben will come out swinging against inflation tomorrow, at least with words. It should be good theater with this Bear Stearns debacle as a back drop.

[LA_Renter]

By the way the dollar is just crumbling right now. I imagine Ben will come out swinging against inflation tomorrow, at least with words. It should be good theater with this Bear Stearns debacle as a back drop.

[LA_Renter]

He does drive them crazy, he did the same thing on AHM and just nailed it. Now he has also been wrong but I really enjoy his posts. He has some keen insight into the financial markets.

[LA_Renter]

He does drive them crazy, he did the same thing on AHM and just nailed it. Now he has also been wrong but I really enjoy his posts. He has some keen insight into the financial markets.

[LA_Renter]

I have been reading this guy’s post lately, he’s good. This is his take on the Bear Stearns debacle

http://market-ticker.denninger.net/

[LA_Renter]

I have been reading this guy’s post lately, he’s good. This is his take on the Bear Stearns debacle

http://market-ticker.denninger.net/

[LA_Renter]

Bear Stearns Link

Updated from 4:26 p.m.
It is looking like a bear of a summer for Bear Stearns (BSC – Cramer’s Take – Stockpickr) hedge fund manager Ralph Cioffi.

Wall Street learned Tuesday just how bad the carnage is in two of Cioffi’s funds, a month after they nearly collapsed under the weight of bad bets on the swooning subprime mortgage business. The two funds chock full of esoteric securities — High-Grade Structured Credit Strategies Fund and its sister vehicle, High Grade Structured Credit Enhanced Leveraged Fund — are now worth less than 10 cents on the dollar, according to media reports.

Sources say investors had been expecting a recovery of around 50 cents on the dollar for the less leveraged fund. Bear shares fell almost 3% in after-hours trading.

The credit markets and parts of the stock market — particularly Bear’s own shares, which are down nearly 20% this year — have already felt subprime pain. The fear in some quarters is that Bear’s pain could have a cascading effect that forces hedge funds and others on Wall Street to offload hard-to-sell assets in a fire sale.

http://www.thestreet.com/s/bear-stearns-funds-on-hot-seat/newsanalysis/wallstreet/10368396.html?puc=_googlen?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA

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