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Ira:
I'm not trying to vie for the crustiest, dourest,
crankiest or oldest trader here--and I'd be the last
to claim I was the only one warning of a day of
reckoning coming.
But having worked for a forecasting economist for the
Bureau of Labor Statistics and then for Reagan's
election campaign [then I swore off the profession for
good], I am constantly amazed when I point out the
rate of growth of M3 and explain how that 17 pct
annualized growth translates into real 17-20 pct
inflation, I get blank stares from other traders that
actually tell me with a straight face, 'But the
government says inflation is only running at 3-4 pct!'
I've seen them doctor the official numbers, I worked
on a research project at the University of Chicago for
a Professor that then got a Nobel prize in Economics
in part for his work in the study of the 'creeping
revisions' inherent in the 'official' economic
releases by our government, I was the main person
doing intervention for the Fed for about 7 years in
the U.S. in the currency markets, stock indices
futures, interest rate markets, and credit markets [as
in washing a firm's name because they baankrupt but
the market didn't know it yet]. But you don't have to
have done any of that to know the truth about
inflation or the housing mess. For inflation, look at
your grocery bill, your energy bill, your medical
insurance bill. If you think they are only growing at
4 pct a year...Oh boy. Please tell me where you get
your food, energy and health care so I can get some at
that rate. In terms of the housing market...In the
Chicago-land area, two of the oldest and largest home
builders have already went bankrupt and are in such
debt, they both announced that are not coming out of
bankruptcy--they had no assets to liquidate. And even
though housing prices are not going to fall here like
they have on the east and west coasts, there is little
or no demand at any price. There's going to be more of
these large builders failing, and you won't even read
about the mid to small builders that fail.
Lending institutions? They should get what they
deserve. They made a pact with the devil. Let them
roast for it. I have no sympathy. And there is
literally nothing the Fed can do--ask the Japanese
government how easy it is to prop up a falling mess.
If it's too good to believe, it just ain't true.
Believe what you know and what you can see and touch
and feel...all else, treat with pure skepticism until
you can verify it yourself. Gurus and governments?
Bahhh...and that includes me. If you cannot verify
what I say, take it with a large grain of salt. It's
the best way to approach trading, the markets,
anything involving money and most of life in general.
Of course, it does mean you have to think for yourself
instead of listening to the steady offical beat of the
talking heads and the government...
Here's to a healthy, happy 2008!
Tim
--- Ira <mr.ira@xxxxxxxxxxxxx> wrote:
> There are several of us that have warned about what
> is about to happen. Those of us that have posted
> this warning lived during those times. I have
> posted many times about inflation, interest rates
> and the falling dollar. It is always the young
> Turks that feel they have the answer to everything.
> I remember the foreign loan fiasco when all the
> large banks tried to out do each other and got stuck
> with a lot of bad loans where the foreign
> governments just said that they weren't going to pay
> any time soon. So the banks rolled the principle
> and accumulated interest into a bigger loan that
> wasn't going to get paid and it worked magic on
> their books. At the time if those banks had to
> submit a financial statement for a car loan they
> would have been refused. Now we have the mortgage
> scandal. They did learn from the 60s on this one.
> They packaged all the bad loans instead of keeping
> them and got them on someone else's books as
> mortgage backed securities. Some of these bad loans
> have insurance and some insurance companies are
> going to be in trouble. If not now, soon. This is
> like a giant sink hole and it will suck a lot of
> people and companies down into it. The fall from
> 2000 to 2003 could just be a walk in the park before
> this one is over.
>
>
> Just one man's opinion, Ira
> www.delta100.com
>
>
> ----- Original Message -----
> From: Timothy Morge
> To: realtraders@xxxxxxxxxxxxxxx
> Sent: Wednesday, January 02, 2008 9:00 PM
> Subject: Re: [RT] wachovia May Face New Mortgage
> Writedowns - Financials * US * News
>
>
> Ben:
>
> I have been speaking about this happening for the
> past
> 18 months at seminars and Traders Expos. Most
> people
> trading today were not around to see the oil
> embargo
> in the 1970's and then the near hyper inflation
> that
> Volker then wrung out of the economy.
>
> Greenspan printed money like there was no tomorrow
> after 9/11 for over 3 years. M3 has been growing
> at
> around 17 percent. This will all come due and we
> are
> only now seeing the beginning of the current Fed
> chairman dealing with this situation. Those he has
> been lowering 'official' rates, he has NOT been
> handing out free money at the window to
> institutions
> with troubled portfolios--and I doubt he will,
> being a
> staunch monetarist. I think he will say, as Volker
> did: You enjoyed the good times, now the situation
> must be remedied--the price will be paid.
>
> Who in their right mind lent people 125 pct value
> of
> their homes in interest only loans? And then...the
> incredible part is that some of the largest
> institutions BOUGHT those rediculous loans as
> bundle
> investments. What a crazy mixed up world. Hot
> potatoe!
> Those that hold this awful paper last...lose.
>
> I wish you all a healthy and happy 2008.
>
> Best,
>
> Tim Morge
>
> www.medianline.com
> --- Ben <profitok@xxxxxxxxxxxxx> wrote:
>
> >
> > Sent: Wednesday, January 02, 2008 3:03 AM
> > Subject: [TimeandCycles] Wachovia May Face New
> > Mortgage Writedowns - Financials * US * News
> >
> >
> >
> > Wachovia May Face New Mortgage Writedowns -
> > Financials * US * News * Story - CNBC.com
> >
> > I've been in the industry for 32 years, and I've
> > been CEO for seven years, and this is as tough
> an
> > environment as I've seen," Wachovia Chief
> Executive
> > Ken Thompson said at a Dec. 12 Goldman Sachs
> > financial services conference
> >
> > this is pattern, they will have new writedowns
> every
> > month for the rest of the year
> >
> >
> >
> >
> >
> >
>
>
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>
>
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> >
> >
> > No virus found in this incoming message.
> > Checked by AVG Free Edition.
> > Version: 7.5.516 / Virus Database:
> 269.17.13/1207 -
> > Release Date: 1/2/2008 11:29 AM
> >
>
>
>
>
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