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Normally, I feel hypotheticals are contrary to actual P&Ls. But here, a
comment MUST be made in response to - and not as a criticism of - Chris'
post.
A "72-year cycle of financial panics"? Well, there may be some
Kondratieff-type basis for that, but consider this. Today's Bill Gates' of
the world and their companies have made yesterday's Carnegies and their
companies look like a Sunday afternoon walk in the park. Today's
Electronic, world-wide (and beyond?) Revolution pales yesterday's Industrial
Revolution. More money has been made by more people in more industries -
both primary and secondary - in a shorted period of time, than in any other
time in world history.
While today's minor DOW correction may or may not be part of a 72-year
cyclic revolution, remains to be seen. What CAN be projected though, is
that in the not-to-distant future, progress and developments will minimize
our current Electronic Revolution to an even greater degree than we have
altered the results of the Industrial Revolution. Computer trends, albeit
with minor setbacks, are flourishing; steel mills are consolidating or going
bust.
Our grandchildren will be having high-school graduation parties in space
rather than in an amusement park.
Which brings up the second point - "Gov bailout of the mutual fund
business???"
LET'S ALL AGGRESSIVE PREVENT THIS! Here my conservative dander has risen
just 'bout as far as it can go - out of fear THAT THIS could HAPPEN, however
remote the chance.
It is said, "Profit from the devil today and he will have your soul
tomorrow".
Understand that our Founding Fathers gave us a Constitution the RESTRICTS
the Feds power - not INCREASES it. It is way, WAY beyond the privilege of
the Fed to dabble, however remotely, in the private sector. It is the
private sector who should be taking over and regulating the Fed - not the
other way around.
Mutual funds, for all their worth and of whatever type - have only one
purpose: TO GENERATE PROFIT.
The Federal Government has only one self-anointed purpose: TO SPEND PROFIT.
The Government makes nothing; the Government generates no profit (other than
what its taxpayers pay to it); and its only "product" is as a
grotesquely-overgrown service industry - and even THAT, it does not do very
well.
The small business owner, working 12 - 14 - 16 hours a day, whose business
has several employees, generates more proportionate value for America's GNP
than all of Washington's regulations passes by pompous, self-important
bureaucrats.
To allow government ownership of private-sector entities through a "bail
out" of mutual funds would truly sound the death kneel of, as is the company
slogan of one famous trader, "Free Markets for Free Men." Neither the
Markets nor the Men who "make them happen" would any longer be free.
Any momentary gains would surely turn into unabated government give-aways.
Those that had invested hard-earned capital would see it dissipate into
government coffers, never, as with the Bermuda Triangle, to be seen again.
And those that suckle at the breast of government would only deprive those
that have given them assets on which they can draw.
No, government intrusion on capital assets of the private sector, is a BAD,
BAD IDEA. Let's put it to rest - here and now!
----- Original Message -----
From: "Chris Cheatham" <nchrisc@xxxxxxxxxx>
To: "Jim Johnson" <jejohn@xxxxxxxxxxxxxxxx>
Cc: "Bilo Selhi" <citadel@xxxxxxxxxxxx>; "Omega List"
<omega-list@xxxxxxxxxx>
Sent: Thursday, September 06, 2001 11:20 AM
Subject: Re: Re[2]: off topic: well, another rumor, about house market
shakeout...
> Hi Jim,
>
> A few things ...
>
> apparently there is a quite precise 72 year cycle of financial panics for
> the entire history of the US...astrology attributes it to procession of
the
> equinoxes...not sure about that but with its accuracy I pay attention.
>
> late fall particularly, due to the Oct y/e for lotso mutual funds and the
> tax bills going to holders for gains they did not get, etc. Forced
> liquidation to pay redemptions in an illiquid mkt, brings lower prices and
> even more redemptions. Thre boys have done a very nice job of keeping the
> small/midcaps up while they've been liquidating the GEs, IBMs, MSFTs, etc.
> When the mid market funds try to sell in a now falling mkt, there is no
mkt.
> I used to trade midcap futures...when it goes (up or down) it goes big
> without much of the specialist churn of the S&P/NYSE. And undoubtedly,
some
> brilliant fund manager will try to pay redemptions on their credit line
and
> will go poof! Gov bailout of the mutual fund business???
>
> Actually Japan gov is considering buying stock to prop up mkt right now.
> Not sure about the timing, but Japan is going to reach a crises point
> someday too. My long term targets for the Nikkei are 4000-5000; given
cross
> share holdings, etc. many Japanese banks are probably close to bankrupt
> now...derivative issues if no one will trade with them? Must be some very
> interesting conversations going on with the rating agencies right now. :-)
>
> Astro wise, there is a quite malefic pluto saturn opposition off and on
til
> next May. What has been has happening to day is every small planet
trigger
> seems to bring on a little more selling.
>
> Regards,
> Chris
>
>
>
>
> ----- Original Message -----
> From: "Jim Johnson" <jejohn@xxxxxxxxxxxxxxxx>
> To: "Chris Cheatham" <nchrisc@xxxxxxxxxx>
> Cc: "Bilo Selhi" <citadel@xxxxxxxxxxxx>; "Omega List"
> <omega-list@xxxxxxxxxx>
> Sent: Thursday, September 06, 2001 7:12 AM
> Subject: Re[2]: off topic: well, another rumor, about house market
> shakeout...
>
>
> > Hello Chris,
> >
> > love the multi faceted analysis. just curious--what is leading you
> > to expect fall mutual fund shakeout? seasonality? uncle point?
> > plantets?
> >
> >
> > Wednesday, September 05, 2001, 11:22:34 PM, you wrote:
> >
> > CC> Bilo,
> >
> > CC> A very astute trader/astrologer I know from another group picked Aug
> as a
> > CC> likely top for real estate. Apt Reits topped in Aug, despite
chugging
> > CC> higher for most of the last couple of years, as did freddie and
> fannie.
> > CC> Also, my Agency note/treasury spread chart broke a couple of year
> > CC> uptrendline the last few days too. We'll see. I have a 16 year reit
> cycle
> > CC> that is next due to bottom in the fall of 06 (after 74 and 90)... so
> we're
> > CC> late in the game. My mid-range homebuilder friends here in TX are
> still in
> > CC> the "sell em as fast as they build em phase", but I suspect high end
> is
> > CC> different.
> >
> > CC> When I was in the real estate biz, I developed a theory that no
> developer
> > CC> that built high rise condos in places like Dallas or LA ever made
any
> money
> > CC> on them...maybe the guy who bought it from the bank (after
> foreclosure)
> > CC> did...and here in Dallas there are a lot of new high rise projects
> around.
> > CC> That time of the season I guess.
> >
> > CC> People I know who retired on their stock market winnings a couple of
> years
> > CC> ago are now selling their luxury homes and downsizing, oh, and
getting
> jobs
> > CC> too.
> >
> > CC> Personally I think the late fall mutual fund shakeout is going to be
a
> much
> > CC> bigger problem for this year than RE. Next year may be a different
> story.
> >
> > CC> Chris
> >
> >
> >
> >
> > CC> ----- Original Message -----
> > CC> From: "Bilo Selhi" <citadel@xxxxxxxxxxxx>
> > CC> To: "Omega List" <omega-list@xxxxxxxxxx>
> > CC> Sent: Wednesday, September 05, 2001 7:19 PM
> > CC> Subject: off topic: well, another rumor, about house market
> shakeout...
> >
> >
> > >> this time the rumor is that US house market
> > >> is nearing a shakeout.
> > >> one shake out down, another one to go.
> > >> my RE sources are telling me that the luxury housing
> > >> market is grossly overheated all around the country
> > >> and is about to correct, especially higher prices
> > >> ( expensive ) housing. the rational is that the
> > >> expensive homes are speculative investment
> > >> and as the owners
> > >> will try to take profits towards the end of the trend
> > >> the crash is imminent.
> > >>
> > >> i kinda feel it myself and you might start hearing
> > >> it on CNBC more often.
> > >> could anyone with RE connections please confirm
> > >> that you there is talk going on around...
> > >>
> > >> if that's the case then selling the overprice house now
> > >> and buying back similar house later might be
> > >> the best buy of the decade???
> > >>
> > >> certainly sounds and feels like that buying a house now
> > >> is tempting with low interest rates but what if it
> > >> collapses and rate goes even lower???
> > >> bilo.
> > >> ps. luxury housing ( whateverfront ) went up to 100-150 %
> > >> in the past 2-3 years... houses that were worth
> > >> 1-2 mil 2-3 years ago are now up to 5-6 mil.
> > >> waterfront luxury condos that were worth 1/4 mil
> > >> then are now more than 1/2 to a mil...
> > >> although those are price setters but feels like
> > >> reversion to the mean is a must here as those
> > >> investment have to be turned into hard cash.
> > >>
> >
> >
> >
> > --
> > Best regards,
> > Jim mailto:jejohn@xxxxxxxxxxxxxxxx
> >
>
>
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