Comments for "Market and a few Credit Indicators"

bobnbot (member) wrote on Tue, 04/14/2009 - 1:01pm.

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other anonymous fellow wrote on Tue, 04/14/2009 - 1:02pm.

Hey CR,

DId you see this from Judge Posner in the NY Times:

The banking collapse occurred last September. The government's unpreparedness (for which Greenspan and Bernanke, successive chairmen of the Federal Reserve, and academic economists bear a large part of the responsibility because of their failure to spot the housing and credit bubbles and their mistaken belief that a depression, as distinct from a mild recession, could never again happen in the United States) and its resulting spasmodic, improvisational responses allowed the crisis to deepen, precipitating the depression we're now in. Contributing factors, besides the dearth of "safe" savings, were our huge budget deficits, which have greatly added to the costs and the inflation risk of the immense federal expenditures on recovery. Indeed, it is those costs and that risk that justify calling the present downturn a depression rather than just a recession; for the costs of a depression/recession include not only the loss in output and employment during the depression period, but also include the costs of recovery.

Now both Robert Reich and Judge Posner have beaten you to the call. They're both saying we're already in a depression!

But you're still holding out!!!!!!!!

Tim waiting for 2012 wrote on Tue, 04/14/2009 - 1:02pm.

Second to last

Intel will disappoint in revenue IMO

Nemo (member) wrote on Tue, 04/14/2009 - 1:03pm.

I'd still like to know how we can be sure the 1929 bear market ever ended.

- Nemo

Lucifer (member) wrote on Tue, 04/14/2009 - 1:07pm.

CR,

Do the stock market numbers matter?

Think about it.. who is going to buy all the stocks held by the current shareholders. The generation after the baby-boomers is numerically smaller and poorer than them.. How can the stock market go up if there are will be more sellers than buyers?

Any Moose wrote on Tue, 04/14/2009 - 1:08pm.

I certain don't want any of that boomer stock unless there is a 2 for 1 deal going on.

Lucifer (member) wrote on Tue, 04/14/2009 - 1:09pm.

What could go wrong?
_________________________________________________
Goldman Sachs's Viniar 'Mystified' by Interest in AIG (Update1)

By Christine Harper

April 14 (Bloomberg) -- David Viniar, Goldman Sachs Group Inc.'s chief financial officer, said he's "mystified" by the interest investors and government officials have shown in the bank's trading relationship with American International Group Inc.

"They're one of thousands and thousands and thousands of counterparties and the results of any trading with AIG are completely immaterial to what we do," Viniar said today in an interview. "I am mystified by this fascination with AIG."

Tim waiting for 2012 wrote on Tue, 04/14/2009 - 1:13pm.

12 Months from the bottom for today's SP500... At least 12 months.

My prediction tomorrow gap up to 745-750 than break down on Wed or Thurs.

Lucifer (member) wrote on Tue, 04/14/2009 - 1:13pm.

The problem with the stock market is quite simple..

You cannot convert stocks (notional money) into cash (real money), unless someone buys the notional money instrument with cash.

The stock market is, over the long run, linked to the ratio of buyers: sellers. I think that might be a bigger problem than many want to believe.

Rob Dawg (member) wrote on Tue, 04/14/2009 - 1:15pm.

CR,
As much as I appreciate the data I wish you'd reconsider the LIBOR due to being so manipulated as to be misleading.

ATM card and $19 in the bank wrote on Tue, 04/14/2009 - 1:19pm.

"I am mystified by this fascination with AIG."

I am mystified why AIG gave Goldman billions in bailout money if GS was truly hedged as firm representatives continue to claim.

Hoopajoops LTD (member) wrote on Tue, 04/14/2009 - 1:21pm.

Jesus christ I miss CR Companion.

-------

http://www.afterthecrash.net - After the Crash, a blog shared by the CR Commenting Community. Hoopajoop on over.

Lucifer (member) wrote on Tue, 04/14/2009 - 1:22pm.

Future guillotine operators are going to chuckle on that one.

//"I am mystified by this fascination with AIG."//

nova (member) wrote on Tue, 04/14/2009 - 1:22pm.

I heard Reich speak. I don't remember a word he said.

http://afterthecrash.net - Home of the Doomer Story Portal and Other Stuff

mock turtle (member) wrote on Tue, 04/14/2009 - 1:23pm.

Rob Dawg

from a previous thread you and i were discussing what kind of a crisis this is

and agreed with you on 3 out of 4 points... yes this is a debt, a valuation ,and (so far) a deflation event

but we disagreed on the 4th point

i believe this is a credit crisis...due to the unwinding, we have a massive credit contraction

here are a few links with supporting arguments

-------

Trichet sounds alarm credit contraction
By Ambrose Evans-Pritchard
Last Updated: 8:16PM GMT 23 Feb 2009

http://www.telegraph.co.uk/finance/4789171/ECBs-Trichet-sounds-alarm-ove...

Mr Trichet said the bank was disturbed by signs of an fully-fledged credit crunch as banks shut off lending to healthy borrowers. Credit has contracted in absolute terms for the first time in recent weeks.......

Professor Tim Congdon from the London School of Economcs said the contraction of eurozone credit was "extremely disturbing" but inevitable after moves in October to force banks to raise their capital ratios. "It was a catastrophic decision," he said.

---
Wall Street Jopurnal
We need to recapitalize the banks...credit contrction
http://online.wsj.com/article/SB122282719885793047.html?mod=googlenews_wsj

Among banks that had excessively leveraged their capital through borrowing and other devices, the losses wiped out much or all of their capital, and this near-insolvency has dampened their willingness to lend.

The resulting credit contraction is starting to crimp working capital and investment outlay at small businesses and is having wider effects on business activity through its impact on interest rates, exchange rates and consumer loans. This feedback is causing a fall of employment on top of the direct effect of the housing contraction on employment in construction and finance. The added fall in jobs will in turn add to mortgage defaults.

---

Credit contraction
http://www.franchisetimes.com/content/story.php?article=01105
By Dennis Monroe
As published in: Franchise Times - November-December 2008

It will take some time for the credit freeze to cycle through. In the meantime, here are some tips to help you out. ,,,I don't have to tell you franchise financing is tight. All you have to do is open up The Wall Street Journal, local newspapers or trade magazines to understand the present credit crunch. In my 30 years of working in the franchise space, I have seen many contractions and have been through many periods when franchise financing was virtually nonexistent. What is unique about this situation is that the credit crunch is not just affecting franchise financing, but financing in general.

---

It's Crunch Time
Evidence That The Credit Contraction Is In Its early stages... the loan categories in which credit contraction is most evident ... auto, credit card, student, and other personal loans slowed ...

www2.standardandpoors.com/spf/pdf/media/Evidence_Crunch_Time_02_19_09.pdf -

---

i rest my case

mt

anonymoos wrote on Tue, 04/14/2009 - 1:23pm.

Canadian warship Winnipeg is about to collect its 3rd win this month evicting Somali pirates from a Greek ship. http://steynian.files.wordpress.com/2008/09/lumberjack-commandos.jpg

Lucifer (member) wrote on Tue, 04/14/2009 - 1:25pm.

Evicting.. eh?

//Canadian warship Winnipeg is about to collect its 3rd win this month evicting Somali pirates from a Greek ship.//

Comrade Terry (member) wrote on Tue, 04/14/2009 - 1:26pm.

" Hoopajoops LTD (member) wrote on Tue, 04/14/2009 - 4:21pm.

Jesus christ I miss CR Companion."

+1

Lucifer (member) wrote on Tue, 04/14/2009 - 1:26pm.

You cannot convert stocks (notional money) into cash (real money), unless someone buys the notional money instrument with cash.
The stock market is, over the long run, linked to the ratio of buyers: sellers. I think that might be a bigger problem than many want to believe.

mock turtle (member) wrote on Tue, 04/14/2009 - 1:29pm.

other anonymous fellow wrote @1:02

Now both Robert Reich and Judge Posner have beaten you to the call. They're both saying we're already in a depression!

But you're still holding out!!!!!!!!

---

hey other anonymous fellow

before this is over we are gonna need a term worse than depression

why?

because a constellation of problems beyond those economic, are bearing down on us at the same time

mt

MLM (member) wrote on Tue, 04/14/2009 - 1:32pm.

The stock market is, over the long run, linked to the ratio of buyers: sellers.

It's linked to the ratio of buyers : sellers over the short run (Buffet's voting machine).

Over the long run, it's linked to the income producing capacity of the companies whose shares are included in it (Buffet's weighing machine).

Lucifer (member) wrote on Tue, 04/14/2009 - 1:35pm.

What if the consumers have no jobs, money or confidence to buy the products of these companies?

//Over the long run, it's linked to the income producing capacity of the companies whose shares are included in it //

MLM (member) wrote on Tue, 04/14/2009 - 1:37pm.

What if the consumers have no jobs, money or confidence to buy the products of these companies?

Over the long run, they will. We may have a few little depressionary bumps in the road between here and there though.

mp wrote on Tue, 04/14/2009 - 1:37pm.

mock turtle- "...a constellation of problems beyond those economic, are bearing down on us at the same time"

+1,000,000

There comes a time when those who know should show some moral responsibility and point out the glaringly obvious to those who don't.

kcoop (member) wrote on Tue, 04/14/2009 - 1:38pm.

Hoops, Comrade Terry, CR Companion features are coming soon. Please be patient. I'm working on less glamorous work right now like getting the site solid, fast, backed up, all comments properly imported, comment counts on CR's site, visitor counts, a cleaner look...

BTW, what feature of CRC do you miss the most?

Lucifer (member) wrote on Tue, 04/14/2009 - 1:39pm.

Not with our current "system".. our current "system" is almost designed to stop that from happening.

//Over the long run, they will. We may have a few little depressionary bumps in the road between here and there though.//

Michael (member) wrote on Tue, 04/14/2009 - 1:40pm.

"The Constitution is not an instrument for the government to restrain the people, it is an instrument for the people to restrain the government -- lest it come to dominate our lives and interests."
-- Patrick Henry

--------------------------------------------------------------------------
Learn the 7TH Amendment maggot! That's how you restrain the government.
Red Beckman - Fully Informed Jury
http://video.google.com/videoplay?docid=7385583011526915030&hl=en

Tupuli (member) wrote on Tue, 04/14/2009 - 1:40pm.

There comes a time when those who know should show some moral responsibility and point out the glaringly obvious to those who don't.

Is it fair to say that you and Conjure aren't very popular at dinner parties?

--
The Zombie Apocalypse begins when U3 hits 15%

Tupuli (member) wrote on Tue, 04/14/2009 - 1:41pm.

kcoop, thanks for your efforts, this site is a huge improvement over the previous experiments.

--
The Zombie Apocalypse begins when U3 hits 15%

Rob Dawg (member) wrote on Tue, 04/14/2009 - 1:43pm.

mp wrote on Tue, 04/14/2009 - 1:37pm.
There comes a time when those who know should show some moral responsibility and point out the glaringly obvious to those who don't.

There's a word for those willing to stand up for what's right in times like these; targets.

[It's not like the messenger ever got shot before.]

Lucifer (member) wrote on Tue, 04/14/2009 - 1:44pm.

I have been saying that for some time now.. this is much bigger and potentially more disruptive than GD1.

//There comes a time when those who know should show some moral responsibility and point out the glaringly obvious to those who don't.//

Lucifer (member) wrote on Tue, 04/14/2009 - 1:44pm.

Dec 2009? or maybe July 2010?

//The Zombie Apocalypse begins when U3 hits 15%//

REally wrote on Tue, 04/14/2009 - 1:45pm.

mt - And what little stars do you see in the heavens? Seriously.

Rob Dawg (member) wrote on Tue, 04/14/2009 - 1:47pm.

Is it fair to say that you and Conjure aren't very popular at dinner parties?

Conjure is welcome any time. One question; Is squirrel an appetizer or a main course?

MLM (member) wrote on Tue, 04/14/2009 - 1:46pm.

Not with our current "system".. our current "system" is almost designed to stop that from happening.

Then the system will tend to get fixed over time. Or, we'll all be fighting for gas out behind the Thunderdome. Could go either way, but I would still bet more heavily on "fixed over time".

Comrade Terry (member) wrote on Tue, 04/14/2009 - 1:48pm.

"BTW, what feature of CRC do you miss the most?"

Rating of posters, and the associated filters.

creditcriminals... (member) wrote on Tue, 04/14/2009 - 1:48pm.

its all priced in...love the first headline...street view also means your looking from the gutter

4:20 p.m Intel reports lower profit, but beats Street views

4:18 p.m [INTC] Intel sees 2009 R&D spending of $10.4 bln to $10.6 bln

4:18 p.m [INTC] Intel Q1 spending at $2.5 bln

4:17 p.m [INTC] Intel Q1 gross margin 45.6%

4:17 p.m [INTC] Intel sees Q2 gross margin expected in mid-40s

4:17 p.m [CSX] CSX Corp. Q1 rev falls 17% to $2.2 bln

4:16 p.m CSX] CSX Corp. Q1 net income 62c vs 85c a share

4:16 p.m [INTC] Intel Q1 net rev $7.15 bln vs $9.67 bln

4:15 p.m. [INTC] Intel Q1 net income 11c vs 25c a share

_______________________________________________________________________________________

I emptied my bank account so the bastards can't use it. Being in debt is like diving with great white sharks.

Lucifer (member) wrote on Tue, 04/14/2009 - 1:49pm.

I would too, though the old system might not get fixed.

The most likely option is that we will abandon the old system in a series of nasty disconnections (shocks), punctuated by brief equilibria... basically how accelerated evolution works. But you right that short of some change and hope, it will be thunderdome time.

//.but I would still bet more heavily on "fixed over time".//

azurite wrote on Tue, 04/14/2009 - 1:50pm.

OT, Dryfly are you out there? Are you the author of this Bloomsberg article on the Jetta vs. the Prius? It reads so much like a post you made, oh, some time ago, regarding the excellent gas mileage of your diesel VW Jetta. http://www.bloomberg.com/apps/news?pid=20601093&sid=aCq7MT7Uv0gQ&refer=home

I'm hoping this link worked, when I read the FAQs for hoocoodonode it seemed as though anything prefaced w/a http would post as a link.

rich (member) wrote on Tue, 04/14/2009 - 1:51pm.

To say that stocks are "notional money" and cash is "real money" is a little simplistic.

But it's also insightful. The real gap is not between the value of stocks and the value of cash. It's between what stocks are being priced at by the market (based on earnings, revenues, and other metrics) and what actually going business of comparable value are worth.

You would almost never pay 10 X or more trailing earnings to buy a whole company in the middle of a deep recession, with no bottom in sight. Never. Nobody is doing it in the real world, are they?

But the stock market still is. When the stock market starts to value companies at 7-9 times trailing earnings, we can speak about a bottom.

Small companies with a higher average weighted cost of capital should sell for lower trailing multiples than big companies with lower average cost of capital. That's discounted cash flow analysis 101.

Also, stocks that pay decent dividends, and can reasonable expect to keep paying them, should have higher multiples. But right now, dividends are cratering across the S&P 500 and R 3000.

Lucifer (member) wrote on Tue, 04/14/2009 - 1:51pm.

Intel makes CPUs and other stuff.. They are useful and have changed the world for the better, created more jobs, advanced science and technology.

Goldman-Sachs have done... never mind!

See.. there is your problem.. part of it.

Lucifer (member) wrote on Tue, 04/14/2009 - 1:54pm.

Ok, once again..

When baby-boomers, pension funds, endowments and other assorted scams want to cash out of the stock market.. who will buy their shares? and with what?

Think about that!

Cinco-X (member) wrote on Tue, 04/14/2009 - 1:54pm.

" The problem with the stock market is quite simple...... over the long run, linked to the ratio of buyers: sellers. I think that might be a bigger problem than many want to believe. "

Especially as baby boomers cash out either to live on or convert to "safer" instruments. I'm hoping that all of this money printed by the Fed ultimately results in interest rates like the early '80s, so that my "201k" can begin to grow again.

creditcriminals... (member) wrote on Tue, 04/14/2009 - 1:55pm.

So Lucifer what your saying is we need more intel on goldman sachs?

_______________________________________________________________________________________

I emptied my bank account so the bastards can't use it. Being in debt is like diving with great white sharks.

Assume Crash Po... (member) wrote on Tue, 04/14/2009 - 1:56pm.

The Zombie Apocalypse begins when U3 hits 15%

I'd been debating whether to get Resident Evil 4 for the Wii. This settles it.

nova (member) wrote on Tue, 04/14/2009 - 1:57pm.

I love a brown skinned women. Yes, indeed. I tell you my fellow Virginians that it is the only way to survive here in the new world. Get that brown sugar and enjoy the freedom that comes with it. Do not let common place tradition tie you down! Yea, verily I say brothers we need to open it to all landowning white males

- Thomas Jefferson

http://afterthecrash.net - Home of the Doomer Story Portal and Other Stuff

ghostfacedinvestah wrote on Tue, 04/14/2009 - 1:57pm.

" MLM (member) wrote on Tue, 04/14/2009 - 1:32pm.

It's linked to the ratio of buyers : sellers over the short run (Buffet's voting machine).

Over the long run, it's linked to the income producing capacity of the companies whose shares are included in it (Buffet's weighing machine)."

I'm in between the two of you on this one. Being more of a bond guy, I never understood why someone would buy a stock, like, say, AAPL, that pays no dividend, even though it generates tons of income.

Over the long run, the value of stock SHOULD be linked to the discounted value of the dividend stream (a la Benjamin Graham, Buffett's idol). However, you have companies out there like AAPL whose growth has slowed considerably (compared to startup days), but yet refuse to pay a dividend. If they aren't going to pay one now, when will they?

For a company like that, you are truly depending on some greater fool to buy your shares from you.

I believe that after the next major leg down, stocks will be viewed more as yield instruments, as they once were, whose main advantage over bonds is that dividends can be increased over time.

But at the S&P div yield of about 2.6% today, that is far from a bargain.

Interesting Times (member) wrote on Tue, 04/14/2009 - 1:58pm.

OT - Does anyone have a US Government and obligations Debt to Revenues chart? (Not Debt to GDP)

Even just the ratio would be nice.

Thanks.

Haha wrote on Tue, 04/14/2009 - 1:58pm.

ESSENTIAL READING :

http://www.scribd.com/doc/14227076/Behind-the-Curtain4909

Read them all at : http://www.scribd.com/people/documents/10432015-kris

Do so before they are taken down, an eye opener.

Cinco-X (member) wrote on Tue, 04/14/2009 - 1:58pm.

"BTW, what feature of CRC do you miss the most? "

filters linked to author ratings.....

nova (member) wrote on Tue, 04/14/2009 - 1:59pm.

lucifer

You running on caffiene or something a lot stronger?

http://afterthecrash.net - Home of the Doomer Story Portal and Other Stuff

Michael (member) wrote on Tue, 04/14/2009 - 2:00pm.

I'm so excited Mike Morgan published my comment about the 7th Amendment. I feel like I'm in the club now.
http://www.goldmansachs666.com/2009/04/is-goldman-sachs-running-us-gover...

--------------------------------------------------------------------------
Learn the 7TH Amendment maggot! That's how you restrain the government.
Red Beckman - Fully Informed Jury
http://video.google.com/videoplay?docid=7385583011526915030&hl=en

Lucifer (member) wrote on Tue, 04/14/2009 - 2:00pm.

Society should realize that institutions like GS are parasitic and at best a closely monitored evil. WE need more Intels, AMDs, Samsungs, IBMs, Apples.. We need a GE that makes nuclear reactors, jet engines and does path-breaking research. We need a GM that develops better and more reliable cars..

Enough of this financialism!

//So Lucifer what your saying is we need more intel on goldman sachs?//

Tupuli (member) wrote on Tue, 04/14/2009 - 2:01pm.

I'd been debating whether to get Resident Evil 4 for the Wii. This settles it.

See also: "Are Violent Video Games Adequately Preparing Children For The Apocalypse?"
http://www.youtube.com/watch?v=45tLWuEw4r4

--
The Zombie Apocalypse begins when U3 hits 15%

nova (member) wrote on Tue, 04/14/2009 - 2:01pm.

Michael!

Mike Morgan runs a front orginization for the CIA! They will have your soul soon! Then they will come AT NIGHT!

http://afterthecrash.net - Home of the Doomer Story Portal and Other Stuff

Hoopajoops LTD (member) wrote on Tue, 04/14/2009 - 2:03pm.

BTW, what feature of CRC do you miss the most?

The most essential feature -- Ignore!

I didn't mean to seem impatient, your work on this site has been amazing. I can't praise it enough. I love the simple layout, the ease of posting (the fact that it doesn't lose posts), I'd have to say the interface is sleek and close to absolutely perfect. You've saved the CR Commenting Community. Beyond backend solidifying, I'd say the following features would be on the top of the list:

1. Option of no ajax-autorefresh, or f5 only refreshing. (Sometimes when it's running a little slow, the ajax refresh can cause browser stuttering; also, if an alternate tab is opened to a thread it'll ajax-refresh, slowing firefox.
2. a divider ------ line and line break placed between the posts and the sig.
3. Ignore feature.

Things that would clutter and destroy the sleek design:
1. Avatars
2. Tons of emoticons
3. Threading

-------

http://www.afterthecrash.net - After the Crash, a blog shared by the CR Commenting Community. Hoopajoop on over.

Lucifer (member) wrote on Tue, 04/14/2009 - 2:03pm.

If you look at his wife's portrait, you know why *S*

Put yourself in his shoes.. would you rather tap an older, wrinkled fat white woman or a Vanessa Williams type (Sally Hemmings)

//I love a brown skinned women. Yes, indeed. I tell you my fellow Virginians that it is the only way to survive here in the new world. Get that brown sugar and enjoy the freedom that comes with it. Do not let common place tradition tie you down! Yea, verily I say brothers we need to open it to all landowning white males
- Thomas Jefferson//

Lucifer (member) wrote on Tue, 04/14/2009 - 2:04pm.

I am always like that.. when I have time to write.

//You running on caffiene or something a lot stronger?//

Cinco-X (member) wrote on Tue, 04/14/2009 - 2:04pm.

"4:20 p.m Intel reports lower profit, but beats Street views....

4:18 p.m [INTC] Intel Q1 spending at $2.5 bln....

4:17 p.m [CSX] CSX Corp. Q1 rev falls 17% to $2.2 bln "

If their revenue is $2.2B, and their spending is $2.5B, how did they make a profit? Accounting games?

Hoopajoops LTD (member) wrote on Tue, 04/14/2009 - 2:04pm.

above post was meant for kcoop.

-------

http://www.afterthecrash.net - After the Crash, a blog shared by the CR Commenting Community. Hoopajoop on over.

nova (member) wrote on Tue, 04/14/2009 - 2:05pm.

Lucifer,

You must be young. Don't mind me. I am impressed

http://afterthecrash.net - Home of the Doomer Story Portal and Other Stuff

Haha wrote on Tue, 04/14/2009 - 2:05pm.

From Jesse :

Goldman Sachs Buries Losses to Beat the Estimates
http://jessescrossroadscafe.blogspot.com/

The only thing getting blown away around here are the shareholders, taxpayers, and anyone else who buys what Wall Street in general is selling these days.

The banks must be restrained and the financial system reformed before we can have a genuine economic recovery.

EvilHenryPaulson (member) wrote on Tue, 04/14/2009 - 2:07pm.

Cinco-x
I believe that is because Intel (INTC) is a separate entity with its own balance sheet separate from the railroad company (CSX) ; )

creditcriminals... (member) wrote on Tue, 04/14/2009 - 2:08pm.

ot-fwiw- I will say this, cargo ship activity has picked up from my point of view (literally) looking towards point reyes both in and outbound. more than feb 09? yes, more than feb last year? no..

_______________________________________________________________________________________

I emptied my bank account so the bastards can't use it. Being in debt is like diving with great white sharks.

Michael (member) wrote on Tue, 04/14/2009 - 2:08pm.

You complete me nova.

--------------------------------------------------------------------------
Learn the 7TH Amendment maggot! That's how you restrain the government.
Red Beckman - Fully Informed Jury
http://video.google.com/videoplay?docid=7385583011526915030&hl=en

gab wrote on Tue, 04/14/2009 - 2:09pm.

"I'm in between the two of you on this one. Being more of a bond guy, I never understood why someone would buy a stock, like, say, AAPL, that pays no dividend, even though it generates tons of income.

Over the long run, the value of stock SHOULD be linked to the discounted value of the dividend stream (a la Benjamin Graham, Buffett's idol."

MPT would posit that it really doesn't matter whether the income is paid out in dividends or kept in the company, thus increasing the enterprise value of the corporation.

Not saying that's right, just saying it's a possibility.

RockyR (member) wrote on Tue, 04/14/2009 - 2:11pm.

mp, I'm only certain of one thing. And that is that I don't know much.

nova (member) wrote on Tue, 04/14/2009 - 2:12pm.

AH Michael. You saucy patriot!

http://afterthecrash.net - Home of the Doomer Story Portal and Other Stuff

Assume Crash Po... (member) wrote on Tue, 04/14/2009 - 2:12pm.

See also: "Are Violent Video Games Adequately Preparing Children For The Apocalypse?"

Ha!

Alex from Sweden wrote on Tue, 04/14/2009 - 2:13pm.

ForeclosureRadar.com
March California Foreclosure Report
FORECLOSURE NOTICES SOAR, FORECLOSURE SALES DROP Government Intervention Continues to Play Havoc in Foreclosure Market

https://s3.amazonaws.com/CA_Foreclosure_Report/March%202009%20CA%20Forec...

Johnny Lee wrote on Tue, 04/14/2009 - 2:13pm.

stock certificates as notional money being purchased with currency which is subject to the whimsical flexing moves of central bankers.

Stocks have their numbers of shares daily inflated/deflated through naked shorting and options which borrow without taking delivery before transaction close.

Everything is now denominated in IOUs of such slippery and mutable nature that valuation is itself almost a randomness.

How can corporate earnings even be accurately accounted in an environment of CE, QE, commodity boom/busts, daily currency manipulations, epic volatility. Not to mention government sponsorship of elite industry, changing tax policy, miscue and counter market cues, off-balance sheet vehicles of intentional opacity, imbedded instruments with timed blowups that few know the day and time of...etc.,etc.,etc.

That anyone tries to make profit or invest in an environment where the country and household are in a tornadic funnel is humourous at best. People are still making the token daily efforts of normal society and economic contribution but intuitively know that nothing, NOTHING has any absolute, intrinsic, and enduring values.

Eat your bread today, for on the morrow it may well disappear.

This we have for trusting in the arm of flesh and thinking prosperity can exist independently of morality.

What natural law does not exist within a system must be imposed from without.

This depression is the imposition of natural laws that man has ignored to his peril

Michael (member) wrote on Tue, 04/14/2009 - 2:13pm.

Just don't get me started, I'll bring us the J-People again.

--------------------------------------------------------------------------
Learn the 7TH Amendment maggot! That's how you restrain the government.
Red Beckman - Fully Informed Jury
http://video.google.com/videoplay?docid=7385583011526915030&hl=en

MLM (member) wrote on Tue, 04/14/2009 - 2:14pm.

ghostfacedinvestah -

I agree with everything you said.

As far as AAPL and a lot of their slow growing tech brethren, my take would be that in the long run they'll have to start paying dividends -- look at MSFT. There's a good argument to be made for not paying dividends if you need the cash to grow, but after that?

Cinco-X (member) wrote on Tue, 04/14/2009 - 2:16pm.

"Cinco-x
I believe that is because Intel (INTC) is a separate entity with its own balance sheet separate from the railroad company (CSX) ; )"

DOH!

Lucifer (member) wrote on Tue, 04/14/2009 - 2:20pm.

What can I say? Religious beliefs.. Economic theories.. never mind
______________________________________________________________________
Decline could be slowing, Bernanke says Fed chief points to 'tentative signs' of leveling out

By Rex Nutting, MarketWatch
Last update: 11:22 a.m. EDT April 14, 2009

WASHINGTON (MarketWatch) -- The most severe economic decline since the Great Depression could be leveling out, Federal Reserve Chairman Ben Bernanke said Tuesday.

//Pointing to another time of upheaval, Bernanke presented his remarks as answers to four questions - mirroring a question-asking tradition of the Passover meal that commemorates the exodus of the Jewish slaves from Egypt. President Obama also evoked religion Tuesday by quoting the Sermon on the Mount, and saying that the economy must be built on rock, not sand -- an economy that is "proud, sturdy and unwavering in face of the greatest storm."//

creditcriminals... (member) wrote on Tue, 04/14/2009 - 2:20pm.

today you would want to be an a cargo container if heading past the farallones...50+kt wind gusts for sure..

_______________________________________________________________________________________

I emptied my bank account so the bastards can't use it. Being in debt is like diving with great white sharks.

debtinator wrote on Tue, 04/14/2009 - 2:21pm.

AAPL used to pay dividends. They had to stop dividend payments and eventually had to have Bill Gates purchase a large chunk of the company and make massive concessions to Microsoft to keep Apple solvent.

ac wrote on Tue, 04/14/2009 - 2:25pm.

Lucifer (member) wrote on Tue, 04/14/2009 - 2:00pm.
Society should realize that institutions like GS are parasitic and at best a closely monitored evil. WE need more Intels, AMDs, Samsungs, IBMs, Apples.. We need a GE that makes nuclear reactors, jet engines and does path-breaking research. We need a GM that develops better and more reliable cars..

Enough of this financialism!

Amen to that.

OTC wrote on Tue, 04/14/2009 - 2:27pm.

Tremendous contribution to a macroeconomic blog, Nova. Taking a teabagging break?

Johnny Lee wrote on Tue, 04/14/2009 - 2:29pm.

We should be gleeful at the emerging "new green shoots" of economic recovery.

Until we realize that every blade of grass and living plant was gobbled to the sand by a steroidal plague of locusts.

And, that that same swarm is at the margin waiting to again devour every photosynthetic thing which shows until the roots too wither and die.

Famine in the land may be more than just the foodstuffs.

MLM (member) wrote on Tue, 04/14/2009 - 2:30pm.

debtinator wrote on Tue, 04/14/2009 - 3:21pm.

AAPL used to pay dividends.

I forgot that if I ever knew it. Pretty interesting. I guess that was roughly while Sculley was running the company?

gab wrote on Tue, 04/14/2009 - 3:09pm.

MPT would posit that it really doesn't matter whether the income is paid out in dividends or kept in the company, thus increasing the enterprise value of the corporation.

Not saying that's right, just saying it's a possibility.

Have seen some research in the last few years saying that MPT neglects all the agency problems that are created by companies holding too much cash for too long.

Lucifer (member) wrote on Tue, 04/14/2009 - 2:33pm.

Change we can believe in..

//Looks like Obama did what many organizations have asked him not to do. In a disappointing move, he has tapped a fifth RIAA lawyer to a top spot in the Justice Department//

Chainsaw (member) wrote on Tue, 04/14/2009 - 2:34pm.

I liked this nugget from the CA Foreclosure Report linked above (thanks Alex from Sweden)...

U.S. efforts to stabilize financial institutions, including TARP, PPIP and changes to "mark-to-market"
accounting practices, among others, may be leading some lenders to avoid completing
foreclosures in the hopes of selling the troubled loans, to gain government guarantees for those
loans or to continue avoiding losses by holding the assets on their books at higher values than
they could get in today's real estate market.

Shadow inventory indeed! Hoocoodanode???

Lucifer (member) wrote on Tue, 04/14/2009 - 2:35pm.

Why are you letting WFC and BOA's secret out of the bag?

//Shadow inventory indeed! Hoocoodanode???//

lawyerliz (member) wrote on Tue, 04/14/2009 - 2:36pm.

Just how tin foil hat is that stuff written on GS by Armstrong?

lawyerliz

sanityclause (member) wrote on Tue, 04/14/2009 - 2:38pm.

Lucifer (member) wrote on Tue, 04/14/2009 - 4:44pm.
I have been saying that for some time now.. this is much bigger and potentially more disruptive than GD1.
--------
If I end up getting killed in a funny looking uniform, that's pretty much a personal bottom for me.

Lucifer (member) wrote on Tue, 04/14/2009 - 2:39pm.

It is GS you are talking about.. I had to design a new level of hell for them..

//Just how tin foil hat is that stuff written on GS by Armstrong?//

The Middling Lebowski wrote on Tue, 04/14/2009 - 2:40pm.

mp wrote
There comes a time when those who know should show some moral responsibility and point out the glaringly obvious to those who don't.

Yeah, but they should do it in riddles in case they're wrong.

lawyerliz (member) wrote on Tue, 04/14/2009 - 2:41pm.

There are a lot of reasons for not completing a foreclosure--you can't sell for anything like the mtg amount, the vacant house will deteriorate, the HOA and condo people will expect you to start paying; you have to pay taxes. If there is a ticket or lien on the prop, you are responsible etc, etc.

The Fla Bar ammounced it would study foreclossures, my first and second and third thoughts were for what--are you gonna try to speed them up or slow them down. The article didn't say.

lawyerliz

Haha wrote on Tue, 04/14/2009 - 2:41pm.

Just how tin foil hat is that stuff written on GS by Armstrong?
----------------------
We'll see if it ever gets published mainstream, but it looks like another expose like John Perkin's Economic Hitmen. (http://en.wikipedia.org/wiki/Confessions_of_an_Economic_Hit_Man).

ghostfacedinvestah wrote on Tue, 04/14/2009 - 2:41pm.

"Have seen some research in the last few years saying that MPT neglects all the agency problems that are created by companies holding too much cash for too long. "

Exactly, agency problems. What do a lot of companies do with extra cash? Buy back stock at inflated prices, of course. And why do they do that? To sop up all the dilution produced from offering too many options to executives.

Of course, they also p*ss it away on add-on products where they have no competitive advantage, or useless acquisitions.

MSFT is a good example, they pay a dividend, but not nearly enough relative to their lack of growth and cash flow. Instead, they build the Zune.

That is interesting that AAPL did pay a dividend, I had to change the date range on my Bloomberg, and there it is, 3 cents a quarter back in 1995.

Given that they are now earning $5 a share, you would think they could reinstitute it. But, they will probably spend the money buying back diluted shares.

lawyerliz (member) wrote on Tue, 04/14/2009 - 2:43pm.

Ahhhhh, ghostf, it finally makes sense.

Thanks.

lawyerliz

ghostfacedinvestah wrote on Tue, 04/14/2009 - 2:46pm.

The shadow inventory in foreclosures is real, but has little to do with some insidious plot, and more to do with incompetence. The poor people working on the delinquency inventories are totally overwhelmed and undertrained.

Add to that various foreclosure moratoriums, and it will be literally years before all the delinquent loans are worked out one way or another.

prime rig wrote on Tue, 04/14/2009 - 2:47pm.

once again. the credit issues are meaningless. let the fed take the pedal off the accelerator and see what happens. the economy is dying and on life support these figures are meaningless

bobnbot (member) wrote on Tue, 04/14/2009 - 2:52pm.

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Homer wrote on Tue, 04/14/2009 - 3:05pm.

AAPL used to pay dividends. They had to stop dividend payments and eventually had to have Bill Gates purchase a large chunk of the company and make massive concessions to Microsoft to keep Apple solvent.

Probably right about the dividends but I have to take exception to the rest of it, as these misconcptions about Apple get repeated ad nauseum.

1) Even in its darkest days Apple had a very large cash cushion (billions); even if Steve Jobs had never come along and revitalized the fortunes of the company, they could have gone on many years before solvency became an issue.

2) Purchase of Apple stock by Microsoft: this is the biggest canard that gets repeated. Microsoft bought a token amount of Apple stock as part of a truce between Apple and Microsoft that Jobs engineered. The purpose was purely P.R. Microsoft never owned a substantial amount of stock, the dolllar value was small compared to the size of Apple or compared to Apple's cash reserves (I forget the exact amount of stock but the dollar amount was in the millions) and Microsoft did not "save Apple" as is sometimes asserted. The stock purchase was not financially significant to Apple.

3) Massive concessions? I think this is the first time I have heard this one. Can you be specific about the nature of the massive concessions? There could have been some concessions on Apple's part, but the only concessions I can remember were from Microsoft (like a promise to continue developing versions of MS Office for the Mac for some number of years, can't recall the exact number).

BTW, there is no doubt that the temporary truce between Apple and MS was helpful in allowing Apple to refocus without the distraction of the MS competition. I believe Microsoft's motivation was to keep Apple around to help fend off anti-trust actions against MS.

M-F wrote on Tue, 04/14/2009 - 3:05pm.

ghostfacedinvestah wrote

"Over the long run, the value of stock SHOULD be linked to the discounted value of the dividend stream (a la Benjamin Graham, Buffett's idol). However, you have companies out there like AAPL whose growth has slowed considerably (compared to startup days), but yet refuse to pay a dividend. If they aren't going to pay one now, when will they?

For a company like that, you are truly depending on some greater fool to buy your shares from you."

BINGO! ghost ... exactly - what value is a stock that never pays a dividend? The company starts, operates and eventually goes bankrupt 20, 40 or 100 years later (as most all companies do that are not bought out). However long it takes doesn't matter, if they never pay a dividend, it's all for nothing and never does any investors any good except the ones that gamble on the prospect of higher future prices.

unearthly (member) wrote on Tue, 04/14/2009 - 3:25pm.

Annual Revenues and Net Profits (MSFT):

2005 Rev/Net Profit: $40B/$12B
2006 Rev/Net Profit: $44B/$12.5B
2007 Rev/Net Profit: $51B/$14B
2008 Rev/Net Profit: $60B/$17.5B

Microsoft has done well enough to pay a better dividend; they also stopped giving options in 2001 (switched to stock grants).

bobnbot (member) wrote on Tue, 04/14/2009 - 4:58pm.

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bobnbot (member) wrote on Tue, 04/14/2009 - 4:58pm.

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