Folks, WE ARE IN A SPIN LOOP AND ARE CRASHING ECONOMICALLY.

[Neubarth]

September Existing Home Sales Rebound to 2-Year High- Reuters

Sales of previously owned U.S. homes surged to their highest level in over two years in September, a survey showed on Friday, providing further evidence the housing market and economy were on the mend.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

A blatant lie by the administration. Nearly one million homes were sold at auction because of foreclosure in the recent period. Because of that housing prices are still collapsing. Just because there are all those foreclosure auctions does not mean this is a positive thing for the economy. Hopefully the sheeple will see though this.

 

[CrusaderFrank]

Our ZOG government will eventually straighten out the economy.

It is in their interest to keep American's working.

No it isn't.

Like FDR before him, Obama wants to crazy glue as many Americans lips to the teats of Big Gubbamint as possible.

 

[Maple]

This mornings economic headlines are just like all the others lately.

Dow Chemical revenues slide; company cuts spending

Dow Chemical revenues tumble and company is not counting on improving conditions for 2010.

Reports like this are happening all across the country. Spending cuts have the final result of millions of more unemployed. They, in turn, reduce their buying because they are living off of Unemployment Insurance. Because of their lack of spending other companies are hurt and they cut employment.

In computer language they have a term called a SPIN LOOP. That means one thing is causing another thing to happen which causes another thing to happen that causes the first thing to happen. SPIN LOOPS can cause the entire computer to CRASH!

What we have here is a SPIN LOOP in the economy. It is causing the entire economy to CRASH!

So far the Obama administration has done nothing about the Spin Loop and the consequence is that the economy is slowly being destroyed.

No Kiddin, I have been saying this for months and months. Economics is nothing more than common sense. When people do not have jobs, they have less money to spend, save and invest. Therefore business has less money because no one is buying anything, it self perpetuates, business then lays off more people. Wall street, looks at earnings, when no one is spending money, business is not earning any and then another sell off in the markets.

Another factor, that seldom sinks into the liberal brain, the more you tax people and business the less revenue the government actually takes in. The more you tax business the less people they employ, unemployed people DO NOT PAY TAXES, they recieve unemployment benefits, a further drain on government.

President Reagan inherited a recession, he spent 8 months putting together an across the board tax reduction that created millions of new jobs and INCREASED revenue to the government through taxes, because he had a very broad tax base with everyone working and everyone contributing.

The no stimulus stimulus bill has only CREATED OR SAVED 30,000 jobs nation wide, it's pathetic. We have 15 MILLION unemployed and that number is continually rising. All the no stimulus stimulus bill did was to increase our national debt, more money went to the arts and humanities than it did to small business which employs 70% of Americans. We need to rescind what is left of that bill and pay down our debt. 500 million dollars a DAY is being spent just to pay INTEREST on the national debt. This in turn hurts our business's they have to compete with government for loans.

Another factor, business is scared to death what this health care reform and cap and trade are going to do to them. So even if they need to hire, they won't, until they see how these two bills that are coming down the track are going to effect them. They are uncertain and uncertainty is never good for business or wall street.

 

[Maple]

September Existing Home Sales Rebound to 2-Year High- Reuters

Sales of previously owned U.S. homes surged to their highest level in over two years in September, a survey showed on Friday, providing further evidence the housing market and economy were on the mend.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

A blatant lie by the administration. Nearly one million homes were sold at auction because of foreclosure in the recent period. Because of that housing prices are still collapsing. Just because there are all those foreclosure auctions does not mean this is a positive thing for the economy. Hopefully the sheeple will see though this.

You got that right, they are lying to us. I don't know where everyone lives but it's very obvious that things are not as we are told they are. People are not getting jobs and that's really the only thing one needs to know, without jobs, nothing happens.

 

[Maple]

Hey Neubarth, who is being sarcastic? My portfolio has recovered about 75% of the loss from the crash last year. Let's hope it keeps going.

Be aware that the economy is still tanking. Look at Retail Sales, Durable Good Orders, Industrial Production, Initial Claims for Unemployment, and Mass Layoffs or Furloughs to see what is really happening with the economy.

Stocks right now are over valued by a factor of four or five, and are due for a massive correction.

It's going to be at least a 10 to 20% correction.

 

[Neubarth]

Hey Neubarth, who is being sarcastic? My portfolio has recovered about 75% of the loss from the crash last year. Let's hope it keeps going.

Be aware that the economy is still tanking. Look at Retail Sales, Durable Good Orders, Industrial Production, Initial Claims for Unemployment, and Mass Layoffs or Furloughs to see what is really happening with the economy.

Stocks right now are over valued by a factor of four or five, and are due for a massive correction.

It's going to be at least a 10 to 20% correction.

I see that as a conservative guess. Still, your guess is as good as mine. We will only know after the fact.

 

[Neubarth]

7,000 unemployed Americans lose their lifeline every day

* By Tami Luhby, CNNMoney.com senior writer

Another day, another 7,000 people run out of unemployment benefits.

One month after the House passed a bill extending unemployment benefits, the issue is still being debated in the Senate.

Democratic leaders in the Senate introduced a bill two weeks ago to lengthen benefits in all states by 14 weeks. Those that live in states with unemployment greater than 8.5% would receive an additional six weeks.

Senate Republicans want to add several amendments, including one that would pay for the extra benefits with stimulus funds

 

[Toro]

Housing prices forecast to fall in 2010 -- and could keep falling for years
Charles Hugh SmithCharles Hugh Smith RSS Feed
Oct 21st 2009 at 8:30AM



Fiserv, a financial information and analysis firm, is forecasting that national median home prices will fall 11.3 percent by summer 2010. The recent surge in home sales and new homes under construction have launched a feeding frenzy in the hardest hit Sunbelt and California markets as investors believe "the bottom is in." The Fiserv forecast -- and the fundamentals of supply and demand -- are throwing cold water on that confident enthusiasm.

Foreclosures are still rising as defaults rise in prime mortgages, which were once viewed as immune to the high defaults hitting subprime loans. As I have reported here before, the foreclosure pipeline -- not just homes that have been foreclosed, but those in default -- is bulging.

Banks are holding foreclosed and distressed properties off the market, hoping to sell them in a stronger economy. This stock of homes is called the "shadow inventory" because lenders have numerous ways to hide how many loans are in arrears and how many homes are foreclosed but not listed on the market.

Neubarth

Though I don't necessarily disagree with the post, I thought you said you didn't pay attention to forecasts.

 

[Neubarth]

Neubarth

Though I don't necessarily disagree with the post, I thought you said you didn't pay attention to forecasts.

I don't know that I ever said that I did not pay attention to forecasts. I do know that I do not pay attention to forecasts that are not based upon fact. If I see a forecast that has substance to it, I am prone to give it some creedence.

The purpose of posting this was (in case you did not guess) to counter your forecast posts. It was done in fun. You and I see things through different glasses. Only time will tell who is right, but to date, I see no real improvement in the economy.

 

[Old Rocks]

Worms eye view. Increase in sales of old homes here in Portland, Oregon, according to my realtor. Prices still going down, but much more slowly. Had an offer on my empty lot. A bit too low, but that should change by March.

Where I work, ad out for a millwright and a materials handler. First hire ads I have seen for my company since last September. Of course, the people hired will be some that were laid off. But it is better than a continued layoff. For the company as a whole, an international conglomerate, things are still a bit shaky.

 

[Toro]

Entered into a contract to buy an empty lot of land in a nice little subdivision a block from the beach today. Its down 92% from the peak three years ago.

 

[Paulie]

Hey Neubarth, who is being sarcastic? My portfolio has recovered about 75% of the loss from the crash last year. Let's hope it keeps going.

Be aware that the economy is still tanking. Look at Retail Sales, Durable Good Orders, Industrial Production, Initial Claims for Unemployment, and Mass Layoffs or Furloughs to see what is really happening with the economy.

Stocks right now are over valued by a factor of four or five, and are due for a massive correction.

Jobs haven't added yet. You can't expect retail to pick up until that point. Since people aren't buying, durable good orders aren't picking up either.

And stocks aren't overvalued when you factor earnings. Companies are still profiting because they trimmed the fat. P/E ratios are averaging like 14 or 15 on the S&P right now. Historic P/E's are 15.

Nothing is off the wall here. If there are earnings, then it makes sense to be a shareholder. Revenues are down because spending is down, becuase jobs are down. But earnings are keeping pace or rising. This is bullish for equities.

I'm not understanding why you think we're so overvalued?

We have earnings, and we have the highest monetary base in history right now. Current stock prices make complete sense.

The only thing I don't get is that there really hasn't been ANY kind of healthy correction yet, which is strange. In July we pulled back a bit and everyone thought it was a rollover, even Toro. He went massively short if I remember correctly. But it was short lived. Perhaps that was our correction.

I don't see anything wrong with the price range we have now, but I certainly don't see any reason for it to go much HIGHER than this until we start adding jobs again.

 

[Toro]

By my metrics, the SP is trading at 17x normalized earnings, which are sales multiplied by a cyclical average profit margin. I think this is expensive for today's environment, though the oceans of liquidity could take us higher.

I was short in July, but covered soon after and went long. Today, I hedged out all my long stocks and am net flat for the first time since then, though I am still long gold, which has been correlated to stocks the past several months.

 

[Paulie]

By my metrics, the SP is trading at 17x normalized earnings, which are sales multiplied by a cyclical average profit margin. I think this is expensive for today's environment, though the oceans of liquidity could take us higher.

I was short in July, but covered soon after and went long. Today, I hedged out all my long stocks and am net flat for the first time since then, though I am still long gold, which has been correlated to stocks the past several months.

So is that a better or more accurate way of valuing stocks, compared to P/E?

 

[DonKayrouz]

stocks are not indicators, they go up and down at anytime
the stock market is based on speculation
the real problem you should talk about is the national debt
The US is going bankrupt and the whole world will fall as well
The debt in the UK will double in less than 3 years

 

[jillian]

Yeah it's all doom and gloom. SOmeone needs to tell these folks:
Leading economic indicators rise again in Sept. - Yahoo! News

People are pointing to the lagging indicators, like employment. Or non indicators like what the market is doing today. Yes there are conflicting signals but there weren't a year ago.

For some reason, he has an obsession with misrepresenting things. I'm not quite sure why, but whatever.

Reality is that it isn't great... but things are slowly improving.That's the nature of recoveries unless something (e.g., tech bubble) sends things rapidly into the statosphere. And jobs always lag behind the rest of the economy near as I can tell.

 

[California Girl]

Can anyone say the phrase 'commercial mortgage market tanking'?

The UK has tried to bullshit it's citizens that they are out of recession too.

 

[Toro]

By my metrics, the SP is trading at 17x normalized earnings, which are sales multiplied by a cyclical average profit margin. I think this is expensive for today's environment, though the oceans of liquidity could take us higher.

I was short in July, but covered soon after and went long. Today, I hedged out all my long stocks and am net flat for the first time since then, though I am still long gold, which has been correlated to stocks the past several months.

So is that a better or more accurate way of valuing stocks, compared to P/E?

It is a normalized PE.

Sales per share of the SP500 = $920.
Normalized profit margin = 7%
Normalized earnings = $920 x 7% = $64.40
SP500 = 1079.6
Normalized PE = 1079.6 / $64.40 = 16.8x, or ~ 17x

Whether or not that is more accurate, I don't know. It is less cyclical though.

It is important to understand this graph that Neubarth posted when making an analogy to the Great Depression

During the time the market fell from the first 50% bounce in 1930 to the bottom in 1932, there were four waves of bank panics, which began in September 1930. Literally, thousands of banks failed. If we were to repeat the conditions of the Depression, we would need to see the equivalent of 4000 banks fail. Thus far, we have had 100. It is also important to understand that we had 1600 fail during the S&L crisis and did not get a repeat of the Depression. The main difference is we have a myriad of government support systems today that we did not have in the 1930s.

Now, maybe Neubarth is correct, I don't know. Maybe we will have another 3900 banks fail. Or perhaps, more ominously, we'll have a failure in the daisy chain of the derivatives markets. However, I think it is more likely that we are probably going to have to have a repeat of the 1970s where we collapsed 50%, had a 65%-75% rebound, then moved sideways for five-six years.

However, nobody has any idea what is going to happen. The amount of stimulus the government has injected is unprecedented. Nobody knows, and there is no historical precedent.

 

[jillian]

Can anyone say the phrase 'commercial mortgage market tanking'?

The UK has tried to bullshit it's citizens that they are out of recession too.

The commercial mortgage market is reflecting the same facts that the residential market reflected a year ago when Bush signed the TARP.

Maybe the banks need to stop taking absurd risks and capitalizing their profits while socializing their losses. They also need to stop sucking all the money out of the economy in bonuses and start loosening credit for good risks again.

 

[dilloduck]

Can anyone say the phrase 'commercial mortgage market tanking'?

The UK has tried to bullshit it's citizens that they are out of recession too.

The commercial mortgage market is reflecting the same facts that the residential market reflected a year ago when Bush signed the TARP.

Maybe the banks need to stop taking absurd risks and capitalizing their profits while socializing their losses. They also need to stop sucking all the money out of the economy in bonuses and start loosening credit for good risks again.

Maybe if the gov would let them go bankrupt instead of bailing them out there would be some incentive to do just that.