Hello from your favorite Pessimistic Investor

[RJP]

You pretty much nailed it there.

Let me add a couple:

U.S. stopping short selling while China begins allowing it. Very real chance of high (in not hyper) inflation. 50% of U.S. treasuries foreign owned. U.S. now a net debtor nation. Asia threatening a flight of capitol out of the U.S.. Wachovia or National City (or both) on the edge of the cliff. Russia seriously considering creating a gold ruble. Venezuela and Russia signing bilateral agreements. Russian fleet sailing into the Caribbean. Citizens protesting by dumping their garbage on Wall Street. And let's not forget Ben Stein appologizing all over the place for not calling this mess!

Damb ........ we Americans are resilient.

I thought I was smart buying SRS, GLD, CEF & FXF.

I'm going back to letting my six year old make the picks with his dart board while I put on some brain numbing American Idol.

Actually.... I'm praying this mess will not be as large and as long as it is looking to be. (stock picks or not).

P.S. - you've got some very good (logical) posts on this board.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[unicon]

Randall, very good thought provoking!!!

Thought I should rush in and buy puts up the ying yang, but what do I give up? Massive control of what I currently have in liquidity!

One cannot give up control - any control in this enviornment. Does one trust the markets?

Was this a long time coming? Did Foreign nations set us up for a fall? Are the waiting for another $700 billion before they pull all their money? Where would the control be then?

Are we down to our last 700bil - our fighting weight? Giving up our last bit of control - is it suicidal or just advertising to the vultures to strike?

From a pure business standpoint this might be easy pickins when we are most vulnerable??

Remember questions are the answer!!!

 

[^eagle^]

How do you think the current agreement for the bailout will affect the US dollar?

I can see you guys are 100X more knowledgable in this area than I.

 

[randallg99]

the 64k questions are:
1. what happens if the bailout happens - and the variable being when
2. what happens if the bailout doesn't happen
3. what happens if this bailout is just not enough?

I won't make any hard predicitions.... financials will probably not like the bailout plan as much as it was originally intended, but it's the best medicine today.

if we don't have a bailout soon, the markets will probably react terribly... credit markets are still all but frozen... so knowing this, the politicians are under the gun and the bailout is probably 99% going to be finalized tonight or tomorrow morning before the markets open.

anything after tomorrow, the gyrations will probably be incredible

all in all, I believe we are still headed for a down market regardless of the bailout.... there have already been HUGE amounts of liquidity injections into the markets and they have not averted recessionary pressures.... another 700bil may or may not do it, but that's a HUGE price tag....

in regards to the US$, the 6 year steady decline was a direct correlation of emerging markets, Japan, China, Canada and Europe thriving while the USA was status quo. a lot of question marks were hanging over the dollar's ability to consume much at the expense of debt. We know now how it's done: leverage, leverage and leverage some more. When the well dries, print more money. Currency traders spotted this trend miles away (and years ago)

if there's anything we should learn from this mess is that politicians should refrain from making fiscal policy

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[^eagle^]

the 64k questions are:
1. what happens if the bailout happens - and the variable being when
2. what happens if the bailout doesn't happen
3. what happens if this bailout is just not enough?

I won't make any hard predicitions.... financials will probably not like the bailout plan as much as it was originally intended, but it's the best medicine today.

if we don't have a bailout soon, the markets will probably react terribly... credit markets are still all but frozen... so knowing this, the politicians are under the gun and the bailout is probably 99% going to be finalized tonight or tomorrow morning before the markets open.

anything after tomorrow, the gyrations will probably be incredible

all in all, I believe we are still headed for a down market regardless of the bailout.... there have already been HUGE amounts of liquidity injections into the markets and they have not averted recessionary pressures.... another 700bil may or may not do it, but that's a HUGE price tag....

in regards to the US$, the 6 year steady decline was a direct correlation of emerging markets, Japan, China, Canada and Europe thriving while the USA was status quo. a lot of question marks were hanging over the dollar's ability to consume much at the expense of debt. We know now how it's done: leverage, leverage and leverage some more. When the well dries, print more money. Currency traders spotted this trend miles away (and years ago)

if there's anything we should learn from this mess is that politicians should refrain from making fiscal policy

The bailout will happen because the the president will either be a great hero for signing it and it works or he will go down in history books as the worst president ever if it fails. He's not up for re election so why should he care? He had his shot at running the country. Time to let someone else clean up the mess.

I may not know ecomics but I do know human nature.
His speech to the nation clearly suggests he will sign whatever is put in front of him.

 

[andviv]

Please DO NOT DISCUSS POLITICS IN THIS FORUM.

 

[Russ H]

Think of a growing tree. If you see the tree growing in the wrong direction, you gently guide it back on track. If a branch starts turning brown, you cut it off.

If the whole tree turns brown, you try to figure out why, and give it the nutrients it needs.

As you learn more about the tree, you may even prune its branches to foster stronger growth.

I honestly thought that this is what we were doing w/the economy.

But I am starting to wonder about this.

Why are we so afraid of a recession-- of an entire forest that grows a bit slower?

I understand the loss in revenue/jobs/GNP, etc.

Bu slow growth is a part of growth-- part of the natural cycles of life.

Where we're going w/things makes me think of Yellowstone Park and Big Sur: For decades, small fires were put out as quickly as possible to preserve the awesome beauty of these areas.

But while this happened (and things were very, very beautiful), small amounts of very flammable materials grew and grew-- what was once a small problem (having a wildfire that would take out, say, a few 100 acres) now became a MAMMOTH problem (a wildfire that would burn out of control, devastating 800,000 acres (Yellowstone) and 240,000 acres (Big Sur).

By stopping smaller fires, we set the stage for much larger, much more dangerous and devastating fires.

Are we doing the same w/our economy?

By working on putting out small recession fires, are we just adding fuel for a much larger, more devastating global fire?

Again, I am very, very naive about these things.

Just curious if this metaphor applies.

-Russ H.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[AroundTheWorld]

But slow growth is a part of growth-- part of the natural cycles of life.

Not only slow growth, but contraction is a part of the natural cycle.

The human body grows, then contracts
The human mind. Plants. Trees. Animals. Stars. The universe. The growing season. Spring brings new seedlings. Autumn brings harvest. Winter brings a time of rest. Imagine never having a winter? The soil needs the rest and the soil needs the variety. Corn one year, grass the next, and the soil needs a few years of pasture.... of rest. Of contraction.

Nothing can go up forever. Nothing can grow forever.

And, just as you pointed out with these gigantic fires.... each postponement of what must eventually naturally happen... leads to a bigger event when it does happen.

Think of raising children.

If a child does not experience the small bumps of life.... (feeling consequences) of their actions, what will happen when they go out into the "real world"? They will be in big trouble - - - crash!

Parents are doing their children a disservice if they are always pushing for growth, accomplishment, and never leaving room for mistakes and "failures."

Growth over the last few decades has been fed by a low interest rate and by the printing of money. The "fuel" left behind by this constant growth is a potential inflation / hyperinflation.

 

[AroundTheWorld]

Oh, and one more thing...

Contraction is NOT A BAD thing!!!

The forest fires renew our forests.... They bring us new seedlings and morels and later, huckleberries. Fire adds nutrients to the soil.

Contraction makes room for new.

A contraction (recession, depression, hyperinflation or otherwise difficult economic times) will bring about the financial responsibility that has been lacking in the average household. A contraction will remind us all not to waste our resources, live within our means. This is the benefit - or the "new birth" that can result from a contraction of our economy.

 

[randallg99]

those analogies above are good and I lke them... unfortunately, the markets do not.

C EO/FO/OOs etc of publicly traded companies are consistently scrutinized under a microscope to perform quickly, just like coaches of major sports teams, elected government positions, shareholders, etc... I think I wrote extensively about this a while back: the above mentality leads to very short term solutions and gives very little consideration to long term goals... our government has to constantly campaign every several years (mayors, governors, senators, congresspeople, pres, etc) and promises are made every few years.... people are only reelected, managers are rehired, coaches are re-signed only when they perform to expectations after only a couple of years +/-...

has anyone seen a coach hired for a major team and told they have 10 years to rebuild? that would be nice, but they're given only a couple of years and that is it... the pressure created to perform is apparently status quo and that pressure is consistent throughout all aspects of business.

let's face it: a real viable solution to the problem will take many years and a lot more than just throwing dollars at the problem. (again - the gov't is trying this weekend to solve a trillion dollar crisis. A whole single weekend is dedicated to a 700 billion dollar expense package) IMO, that's probably a little quick to the draw, no?

a real diagnosis of the problem at hand regarding the credit markets (MBS, auto, credit card, CDO, CDS, etc) requires economists, not politicians and requires a lot more evaluation than just a long weekend with legislators.

ps. Andviv - I looked back to see what posts about politics were made and only found very generalized references and not actual discussions....

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[^eagle^]

Please DO NOT DISCUSS POLITICS IN THIS FORUM.

I get your point andviv. I was merely stating an observation of human nature. I would say the same thing if a democrat was in office.

My point is the bail out WILL happen. Randall posed the question Will IT HAPPEN.

I answered it.

Nothing more.

Please do not take this as condescending as it is not menat to be. I value your input and am extremely grateful you referred me here.
:cheers:

 

[randallg99]

lots of news and a little banter on this forum about HELOCs, Reits, Home values... but very little about the Fed, Interest rates, credit risk and the corresponding credit bubble.... its not all bad news, but the changes are coming faster than ever...

lets review what seems like years worth of news all packed in the past couple of weeks...

1. Housing- still in free fall. inventory levels and foreclosures continue to creep up. My opinion is that we aint seen nothin` yet.... I am in the `waiting` camp and may pursue property in the form of low ball offers of 50%+/- the asking prices...

and inventories are still increasing. Foreclosures are still at record highs. Some area pricings are down by 50% while others are "only" down by 10% ... it's a wait and see game. However, while residential is taking it on the chin, we saw that the commercial arena was stable for a long time only to falter recently. Commercial lending has all but frozen, which partially contributes to the problem, but so has the residential equity positions.

2. Interest rate today was cut by 1/4. Many wanted 1/2, but they will live with it. The concern is not that the rate was `only cut` by 1/4, but the language used in the report... Bomber Ben all but told us flat out not to expect any more cuts and started using inflation (gasp!) as his basis... so what now, Ben? dont worry about the dollar anymore? ... unfortunately, it will take much longer for any positive effects of a lower dollar to take hold than the negative effects on the economy....

after all this time and even with a bailout, the huge amount of rate cuts to loosen lending have not worked hence the bailout plan... rate cuts are still forthcoming to fight inflation and to help continue the loosening of credit ... this in itself is a vote for NO confidence in the economy. Still.

3. Looking at new cars for my wife. All German cars are holding firm in value, if not downright increasing in price... what this means? My vanishing US$ is starting to hit the consumer where it hurts....

shit, I rented a honda odyssey for 36 months... WTFDIK?

4. Oil at $94 per barrel. You have got to be kidding me... one slip in logisitics, any more congestion at the ports and any indication of a refinery shut down will send gas prices to the moon.... mark my words. (I have bought slugs of PBT in the past week, mid 15s).

and oil hit 147 and is not going to stabilize below 90. gyrations are unbelievable. on a sidenote, I have been considering reentering Petyo trust (hey MJ, if you want a CRT, this might be the one to have, if you're having more than one... do your own dd )

refineries have gotten slammed but the prices didn't go up because of that... but speculation and the olympics were the primary culprits.

I still believe to this very day, this very moment, if oil fell back to the 30-40 range per bbl, we will immediately end the recession almost instantaneously

5. Merrill just had the single largest write down in history.... and THEY STILL CANNOT VALUE IT PROPERLY. (Hate to use caps, but if this doesnt freak people out, then I dont know what will...) Friends on wall street are glad they are able to kill this quarter once and for all so they can focus on profits again. But even they admit they freaked out and are not sure all of the bad news has come out because the true cost vs. current basis has a spread so out of whack they dont know which a$$ the dirt is flying out from next....

holy crap, did I nail this or what????

6. Did anyone see the MasterCard earnings report? This all but confirms credit has ever so quickly shifted the risk from home eq lines that were used as ATMs over to plastic credit.... the problem? for the consumer, higher interest rates/higher pymts and lower net worth. (IMHO, Mastercard will realistically be a strong short when a lot of the dust settles).

holy crap, did I nail this too or what????

7. Default rate at Alt-A levels are increasing... see #1..

we all knew this already

In summary- the economic reality of Americans is that they cannot afford all of the above in one full swoop... Lower $, higher oil, reduced home equity/net worth, higher payments... the economy reminds me of a table with a broken leg being held by books...

but who am I? currently investing in gold, silver and bulk shipping companies and recently have reentered the oil/gas arena. So far, so good. good luck to the rest of you.

I exited the bulk shippers (whew!) since then. also got out of most of the oil/gas sector... I made my money when I could but it's too volatile to stomach.

see prior posts to see my current positions. It looks like I might sell into strength tomorrow ... I am in very liquid positions now and can liquidate easily

60 minutes came on immediately after the football game tonight inteviewing Paulson, Pelosi etc... the best part by far was from Altman which totally summed up the entire mess.... a must see if you can get on You-Tube.... go for it.... what really sucks is that there isn't a true cure-all and this 700bil package is a shot in the dark...

Paulson all but admitted that we're only going to see more shit hit the fan no matter what happens.

 

[LightHouse]

didnt know where else to plug this and appologize if i am interupting the convo here but here is the draft agreement for the bailout if anyone is interested

http://i.cdn.turner.com/cnn/2008/images/09/28/ayo08c04_xml.pdf

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[randallg99]

lots of developments -

Paulson barely able to stand up while announcing the plan.... had to supported by being elbow locked with Senator....

section 132 of the plan allows the elimination of mark-to-market accounting.... is that only for the distressed assets? is that only temporary???? this is pretty big...

mark-to-market is assigning a hypothetical or a fair market value to an "asset" that may not sell in within a short duration just so a dollar figure can be used for balance sheets and accounting purposes

the elimination of this means they can just produce any number that fits???? or they will just eliminate this from the balance sheets????

OR ARE THE ACTUAL VALUES OF THE MORTGAGE POOLS THAT ARE BAILED OUT BEING PRICED AT THEIR ORIGINAL PURCHASE PRICE ???

I just glanced at this plan.... but I highly doubt 99% of the population will read beyond the table of contents.

it's amazing they figured out how to spend 700 bil in 106 pages.

the asian markets are down tonight. they don't like the american bailout...They probably read between the lines but our financial system really needs Asian confidence and support. Without their holding our debt, not many of the bail out or cash injections are possible

here are some articles/links....

Ben Stein sums up my perspective: http://www.nytimes.com/2008/09/28/business/28every.html?_r=1&oref=slogin


Asian indices: Major World Indices - Yahoo! Finance


and this is what the legislators were reading before they approved the bailout: Bailout failure 'will cause US crash' - Telegraph


we a strong finish in tomorrow's market activity for any relief... if the markets go down by the end of the day, then we will retest new lows in upcoming week. JMHO.

 

[china]

There is some good discussion about the Treasury's phone call tonight in this blog:

naked capitalism

 

[randallg99]

Europe is blowing chunks... B&B, Fortis, Dexia, all needing injections and cash raising sales....

the bill will get passed... but it takes a couple of days for legislators to vote on it due to procuedures.... and then it will take weeks for the gov't to buy the "dirty" assets...

but the meltdown can happen within a day. As we've seen with Bear Sterns, AIG, Lehman, etc...

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[randallg99]

I also meant to add that if more people who are able to pay their mortgages but elect not to (in retaliation to the crisis) then the gov't will have a much bigger and much more serious problem on their hands since they are going to own a lot of the paper!

 

[LightHouse]

randall from parts i picked up only about 350B is being approved at first. Also they are aiming to lower the payments of the defunct lenders so that they can keep their houses. some interesting stuff. i plan to read the bail-out today.

 

[kimberland]

those analogies above are good and I lke them... unfortunately, the markets do not.

C EO/FO/OOs etc of publicly traded companies are consistently scrutinized under a microscope to perform quickly,

The Exec suite will play the usual game.
They'll take a massive hit one year
(usually this means the current execs get turfed
but then they simply move onto another company)
and then all their numbers afterwards
are judged against a lower base.

Remember this short term thinking
means they are only compared year over year.
One bad year will reset expectations.

You want an example?
McDonalds does this ALL the time.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[randallg99]

The Exec suite will play the usual game.
They'll take a massive hit one year
(usually this means the current execs get turfed
but then they simply move onto another company)
and then all their numbers afterwards
are judged against a lower base.

Remember this short term thinking
means they are only compared year over year.
One bad year will reset expectations.

You want an example?
McDonalds does this ALL the time.

that's exactly what Lehman, AIG, Wachovia, WAMU, merrill etc all said when they did their first batch of write downs and made their balance sheets leaner.... fortunately for McD's, they have a fast turnover for their inventory and I don't think they leveraged using default swaps on their burgers... or did they? lol....

side note- did you see bloomberg headline that McD's franchises have to look elsewhere for retrofitting/renovation credit lines since BAC tightened them....

here are my thoughts du jour. worth all but 2 cents-

so much attention has been given to the bail out but there's a really dark cloud looming beyond.... and we have totally been losing sight of what's going on in the US and global economy.... the media, news and even these discussions is emphasizing a lot on the bailout....

what got the banks into this mess where they are sweating bullets and trying to calm customers?

I was making my deposits yesterday and got to speak with the local branch manager who told me of 2 different clients - average Joes- wanting to cash their settlement checks of 200k +/- each.... they didn't want to deposit the money fearing the local bank collapsing (despite that it's owned by TD - a Canadian co. and has one of the most stellar balance sheets today)

customers were convinced to open up accounts and learn how FDIC rules applied... thankfully.

mentality like above is not only created by media hype, but fear... a lot of it.... even a thread on this forum has people contemplating owning gold coins and ammo and I saw news of people who are building cubbie holes underneath the house foundations... (fastlane thinking? exploit the fear? anyone handy with a good shovel? heh)

my point is: we have to not only get this financial crisis behind us, but we need to look at what else is driving the economy.... so much attention is given to the bailout that we totally missed some of the most atrocious economic indicators in 25 years! unemployment, home pricing, dollar, etc...

by the way, the euro is collapsing and the us$ is up a whole 2% today! this is making me dizzier than my daughter with her hula hoop but this speaks volumes about the condition of the Euro... any one in forex have the play?

another side note - I have 2 friends/acquaintences who have lost their wall street jobs in the last month and I have another who confided in me that his department would be the first to be slashed if taken over by Citi/JPM, etc... problems loom for my friends is that there are 1000 applicants for every possible job opening.

a couple of others are sitting in drivers seats, they bring in so much money for their company they aren't worried.

I pray for their security. they have a much different mind set than us here with fastlane mentality.... they need their J-O-Bs and will seek furiously for a new job if push comes to shove....

 

[kimberland]

that's exactly what Lehman, AIG, Wachovia, WAMU, merrill etc all said when they did their first batch of write downs and made their balance sheets leaner.... fortunately for McD's, they have a fast turnover for their inventory and I don't think they leveraged using default swaps on their burgers... or did they? lol....

Well, wasn't Lehman, etc's problem mainly
that they no longer HAD a product?
They sell confidence,
when that is gone...

McD's sells burgers.
If burgers and fries were no longer eaten,
they'd be obsolete also.

 

[RJP]

Interesting article in regards to the Euro and the situation in Europe. Seems the ECB cannot inject any more liquidity into the market.

Banking crash hits Europe as ECB loses traction - Telegraph

Quote from article:

"The interbank market has collapsed," said Hans Redeker, currency chief at BNP Paribas.
"We're now seeing a domino effect as the credit multiplier goes into reverse and forces banks to cut back lending to clients," he said.
Mr Redeker said the latest alarming twist is a move by banks to deposit €28bn in funds at the European Central Bank in a panic flight to safety. This has jammed the mechanism used by the authorities to shore up the financial system in a crisis.
"The ECB is no longer able to inject liquidity because the money is just coming back to them again. This is extremely serious. If monetary policy is no longer working, there is a risk that the whole system will blow up in days," he said.
The euro plunged on Monday as the wave of bank failures hit the newswires, dropping 2pc to $1.43 against the dollar. It recovered slightly as the US Federal Reserve flooded the markets with $630bn of dollar funding with fellow central banks in the biggest liquidity blitz in history.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[unicon]

Interesting, "Banks cannot inject more liquidity, because it comes back to them for safety?"

Throwing money at something does not get "Production" especially in a contracting enviornment!!!

Production is about character and real work not a disassociation with reality!!

 

[^eagle^]

Just read on my Forex wire that a european bailout's chances are "slim to none"

The eur/usd is bouncing like a ping pong ball. Any bad news on the dollar and the euro rockets.

Any bad news on the euro and the euro plummets.

Good news also about the american bailout causes a drop for the euro but people are skeptical congress can push it through so the drop isn't as violent.

Going to be an interesting week.

 

[randallg99]

kinda fascinating how many people are so inclined to reject the bail out... credit markets are all but frozen - overnight rates are astronomically high. society is damed if they do and damed if they don't... yes, taxpayers will get off the hook but at the expense of the economy. No lending = no economic growth.

it just seems so many times we were told in the last year that "everything was ok" and that the "subprime" mortgages were contained which has made it difficult to believe anyone spitting any iota of info from the politicians and spokespeople from the financial sector...

just seems that politicians are not best suited to handle this country's fiscal matters and the Wall Streeters aren't either since their ulterior motives have nothing in common for the country's best interest as a whole.... and people regarded Meredith Whitney as a ladder climbing bitch making ludicrous claims... she's having that last laugh now. She's been right and if people listened, they would have adjusted their portfolios accordingly and made money.

and speaking of Nouriel Roubini who was considered just another "attention grabber" even in this forum... but reality is that he has called this mess and been outspoken for a couple of years now. He really believes it's going to get much worse... I give him a lot of credit and take what he says much more to heart than many other doomsayers. Roubini isn't an "end of the world" gold bug and has actually offered viable solutions that some nations have already followed and successfully contained their crises

pretty soon, it's gonna be time to buy everything in sight.... I just don't believe we've seen that level just yet but it's gonna happen.... maybe soon... my crystal ball is just too fogged up with so many crazy indicators, and the one that keeps sticking out is unemployment. It keeps creeping higher and this is a kiss of death for any economy

another data point that is keeping me from "jumping in" today is the trailing earnings.... just recently read that trailing p/e is still in mid 20s.... even if we don't have a meltdown, equities are still priced high vs. historical data....

good article here:
Bloomberg.com: Opinion

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[randallg99]

Well, wasn't Lehman, etc's problem mainly
that they no longer HAD a product?
They sell confidence,
when that is gone...

McD's sells burgers.
If burgers and fries were no longer eaten,
they'd be obsolete also.

that's an excellent point....

except Lehman's among other's inventory was actual $$$$ in forms of loans and leveraged hedges and securities....

and they ran out of inventory. very simple way of looking at it, but so very clear

 

[randallg99]

we're not getting close to the bottom... and the fundamentals keep supporting my positions however crappy they're performing.... best position in my port? JPM... go figure!

how do we play SRS???? I am long a slug of shares.... all of the layoffs/firings means empty spaces, means no rent, no lease renewals, etc... just seems so logical to go deeper into SRS

contemplating going deeper and using more of the keg powder at hand... if I go longer, I'll need put protection


http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aM7LINS06Ewo

>>>The Labor Department may report on Oct. 3 that the economy lost jobs in September for a ninth consecutive month. Economists surveyed by Bloomberg News forecast payrolls dropped by 105,000 in September after declining by 84,000 in August. <<<

>>>Companies have announced a total of 763,090 cuts so far this year, up 30 percent from the first nine months of 2007, according to Challenger's survey. >>>

 

[randallg99]

Just another nervous nellie move - sold JAG and sold SRS.... will pick up SRS again in the morning.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[randallg99]

morning musings

unemployment = 7 year high.... this has got to stabilize if we're gonna have a rebound in the markets and the economy...

buy when there's fear, right? it's hard to see thru all the negativity.... Buffet was interviewed by Charlie Rose - made very interesting observations that he has never seen so much fear in all of his investing years.... good transcript.

this is coming from a guy who now owns chunks of large corporations and banks on the cheap! GE at a 10% rate of return plus deep in money warrants... he did fine... no need to worry about Brkshire for a while.

on a good note? illegal immigrants are headed home... can't find jobs here anymore to funnel cash back to their families.... more openings for US laborers and more importantly, can alleviate unemployment.

on Good Morning America, I just saw a handful of people whose 100 yr old birthday is today... I have all but to wonder if they've seen the worse of it. The main difference, in my mind, is in 1930, the depression came on with a vengance swiping people upside the head... today, it's like a tidal wave that started in the middle of the ocean and we're all kinda like expecting it to hit the shore... we just dont know how high the wave will be and how hard it will hit.... it could amount to nothing more than a surfers wave or then it could be....

it's this very uncertainty that's driving this economy and the market... banks aren't lending (anyone see the LIBOR rates in this past couple of weeks????) and the fear instilled in one of my businesses has all but frozen activity... for all we know, maybe we've hit bottom.... I hope so, but hope doesn't make money in the markets

 

[kidgas]

I honestly don't think we will hit bottom until the gold: Dow ratio hits single digits likely 7 or 8.