September was awful and October is looking worse. Everywhere I look I see stories about the financial crisis and people wondering if we're going to see another Great Depression. I keep hearing people on CNBC talking about defensive sectors and stocks. This is a totally academic exercise when all equities are getting punished. There is enough pessimism in the market to choke a horse. So have we reached a point of capitulation? I don't know. I don't care. I'm not a trader. I've... Read Full Story
These are the times that try men's souls--Thomas Paine Amy Winehouse is turning to Scientology. Previously unknown Jim Petruzelli TKOs Kimbo Slice. The most shocking event of all though: Jim Cramer is dissing the stock market. Jim Cramer went on the Today Show yesterday and advised people to take any money out of the stock market that they will need in the next five years. Why? He sees the possibility of a 20% decline in the Dow and wants to help the little guy get out of the way... Read Full Story
The last year of coverage on CNBC has featured relentless cheerleading. With every downward thrust of the market, we find a CNBC reporter or anchor talking about the wonderful values being created in the wake of volatility. Well, the bargains kept coming. When they weren't encouraging you to snap up wonderful banks at fire sale prices, they were kvetching about the need for a rate cut or anything that might stave off the impending recession. I turned especially negative on the network... Read Full Story
Uncle Sam is being especially generous. He has tried thrice to throw money at the problem(Bear Stearns, Fannie Mae/Freddie Mac, AIG) and failed. Now he is going to buy any and everything just about. Chairman Cox of the SEC has suspended shortselling in stocks. Of course, the stock market is eating it up. The question you must ask yourself is, "is it over?" I don't think it is, but I am often wrong. I venture to guess that you are often wrong as well. So what do you do when your... Read Full Story
I needed the Fannie/Freddie bailout during the last week of August, not yesterday. I shorted FNM at $3.99 on 8/21 and ended up covering at $6.18 on 8/27. I shorted FRE at $2.96 on 8/21 and threw in the towel on 8/27, covering at $4.54, They both climbed higher still that week before cratering yesterday. I knew a government bailout was coming, so why didn't I stick with the trade? It came down to money. First of all, this wasn't my money; it was my girlfriends and I wouldn't have slept... Read Full Story
Yale economist Robert Shiller gives his take on how to solve the subprime mess. He argues for more short-term help for consumers along with further innovation in the mortgage products space. Read Full Story
Real estate hasn't yet turned the corner. The top five states for mortgage fraud for the first three months of 2008 according to the Mortgage Asset Research Institute: 1. Florida 2. California 3. Illinois 4. Maryland 5. Michigan The last three are actually in a three-way tie. The report went on to say. The first quarter data reveals that loan application misrepresentation continues to plague the industry. According to the FBI’s 2007 Mortgage Fraud Report, “the downward trend in the... Read Full Story
This is a condensed version of a speech he recently gave in Vancouver. He can be a bit repetitive if you've heard him speak previously or read his books. Still, he makes a valid point. The commodity bull market has a long way to go. This bull market is not magic. It’s not some crazy “cycle theory” I have. It does not fall out of the sky. It’s supply and demand. It’s simple stuff. In the 80s and 90s, when people were calling you to buy mutual fund and stocks, no one called to say... Read Full Story
Things are hard all over the place. The market rallies, then declines, then rallies, then declines. It's positively Sisyphean. The banks keep on saying the worst is over. The homebuilders keep saying the worst is over. Pundits and permabears live in fear of the dreaded "r" word(recession). So who can you trust, when no one will tell the truth? The debt collectors. These guys are on the front lines. They've heard every excuse in the book and they know what's going on with the... Read Full Story
If you've own BAC, C, AIG, LEH, or heaven forbid,BSC, you've taken quite a bath. The money center banks, the regional banks, the savings and loans, insurance, investment banks, brokerages, pretty much have all gotten hammered( notable exception, Hudson City Bancorp-HCBK. However, on group within financials have actually done well over the last year: asset managers. The worst haven't suffered as much and the best have far outpaced the sector and the general market. I've put together a... Read Full Story
