[NoWorries]

http://www.bloomberg.com/apps/news?pid= ... refer=home

Whew! That's a relief. I was afraid things were going to look like 1929.

[SoylentGreen]

I have been a freddie Mac/subprime auditor for the last 4 years. trust me, its gonna look more like 10/1929. Freddie and Fannie are all but insolvent. Indy is out of business.the problem....foriegn investment.Nobody wants to invest in the US anymore and I dont blame them.

[Fiddlerdave]

http://www.bloomberg.com/apps/news?pid=20601213&sid=au9lYw3WnbS8&refer=home

Whew! That's a relief. I was afraid things were going to look like 1929.

They were just talking Friday. Who can say about the far future, like Monday?

[CarlosFerreira]

I have been a freddie Mac/subprime auditor for the last 4 years. trust me, its gonna look more like 10/1929. Freddie and Fannie are all but insolvent. Indy is out of business.the problem....foriegn investment.Nobody wants to invest in the US anymore and I dont blame them.

We've been reading for years now that the US economy was the most dependent of foreign money in the world. So, if there's a confidence issue, people won't risk burying money there. How will they solve the problem, I can't see.

[SoylentGreen]

IndyMac is also a bank. This is the 1st time I am aware of since the 1930's depositors are going to loose $ in deposits.
FDIC gaurantees $100,000. In this case ,if you have more than that which about 10,000 customers do, they will only get 1/2 of theyre money beyond $100,000 and must file a claim with the FDIC.
Maybe they will get it,maybe they wont. More bank failures are imminent. If you have more than $100K in one bank, you need to spread it around?
Without more mega foriegn investment,I dont see how we are going to unplug this comode?
Moronically liberal Stated Income loans since 2002 made by Fannie Freddie and big investment houses Bear Sterns and Lehman among others have gone bad in such quantities, no foriegn investor will touch the US with a 3 metre pole.(10 foot)
Fannie Mae and Freddie Mac started the retardedly liberal lending underwriting standards and there is still no talk of crucifying the people in charge.
They should be treated like the executives of WorldCom,HealthSouth,Enron and Tyco.Prosecute them, lock them up, find and seize thier assets.At least that would be a sign of trying to solve the problem from the roots and maybe we can go forward from there.
The folks on the top floor of Fannie and Freddie are as guilty and have caused the country more damage than anybody since the great depression.

[BigTex]

Since the S&P has no aerodynamic qualities (of which I am aware), it will do what any ballistic object does when it runs out of fuel or momentum--it will fall...

And it will continue falling until more propellant is provided.

The question is: what will the propellant be?

Historically, the propellant has ALWAYS been cheap energy (short term bursts can be provided through cheap credit as well). Since there is no reason to believe that cheap energy is anywhere on the future horizon (and we have already done the cheap credit thing), there is no propellant that I can see anywhere in the future.

Does anyone else see propellant for more upward movement?

[DantesPeak]

Does anyone else see propellant for more upward movement?

I think if you took out energy related issues from the S & P over the last two years teh resulting S & P would look pretty bad. So bad that no one would have any doubt there is a bear market in progress.

The stocks of many financial related companies may well eventually go to zero. But the stocks of unleveraged companies and especially natural resource firms may do well as the next wave of Fed induced inflation spreads.

The potential problem later with natural resource, oil service, etc., issues is that since mostly only companies making money pay tax, there will be a great effort to raise the tax on that group due to their 'windfall' profits.

[SoylentGreen]

90 US banks have been put on "FDIC watch list". I havent been able to find a list of these institutions. To be put on the FDIC watch list, loan portfolio delinquencies over 90 days has to be major and the reserves to deal with them, doubtful.

[DantesPeak]

90 US banks have been put on "FDIC watch list". I havent been able to find a list of these institutions. To be put on the FDIC watch list, loan portfolio delinquencies over 90 days has to be major and the reserves to deal with them, doubtful.

The watch list is not public information but an educated guess can be made as to who is on the list (not that I know).

Any financial firm that has any kind of government order in force against it, which IndyMac did, is a prime canidate.

[SoylentGreen]

Im not aware of anywhere close to that may banks on the watch list in FDIC's history ?

[BigTex]

The stocks of many financial related companies may well eventually go to zero. But the stocks of unleveraged companies and especially natural resource firms may do well as the next wave of Fed induced inflation spreads.

The potential problem later with natural resource, oil service, etc., issues is that since mostly only companies making money pay tax, there will be a great effort to raise the tax on that group due to their 'windfall' profits.

I think a lot of the bull market in natural resource stocks may be behind us, since the market seems to be figuring out slowly that if your costs are rising as fast as your profits, things may not be as rosy as they appear.

The fact that Exxon doesn't seem to have anything better to do with its profits than buy back its own stock is also not encouraging.

I think that we are in a very strange place right now, where there is an excessive amount of risk that doesn't appear to be priced into either the bond or the stock market.

What rational person would buy a 10 year Treasury bond at under 4% right now? That just doesn't make any sense to me.

[DantesPeak]

The stocks of many financial related companies may well eventually go to zero. But the stocks of unleveraged companies and especially natural resource firms may do well as the next wave of Fed induced inflation spreads.

The potential problem later with natural resource, oil service, etc., issues is that since mostly only companies making money pay tax, there will be a great effort to raise the tax on that group due to their 'windfall' profits.

I think a lot of the bull market in natural resource stocks may be behind us, since the market seems to be figuring out slowly that if your costs are rising as fast as your profits, things may not be as rosy as they appear.

The fact that Exxon doesn't seem to have anything better to do with its profits than buy back its own stock is also not encouraging.

I think that we are in a very strange place right now, where there is an excessive amount of risk that doesn't appear to be priced into either the bond or the stock market.

What rational person would buy a 10 year Treasury bond at under 4% right now? That just doesn't make any sense to me.

I agree with your point that costs for natural resource companies are also rising rapidly, and for example, may be behind the reason that drilling is not being conducted on some off shore leases even where there is some promise.

However because the US Treasury bond market serves as a financial hedge to the even larger mortgage market, the actual yield of bonds at 4% reflects more the lack of investment alternatives and mortgage hedging than inflation.

[BigTex]

However because the US Treasury bond market serves as a financial hedge to the even larger mortgage market, the actual yield of bonds at 4% reflects more the lack of investment alternatives and mortgage hedging than inflation.

I agree with you regarding how we got to 3.95%. What concerns me is that I feel like there is a thick rubber band that is being stretched between Treasury rates and U.S. dollar inflation. The rate of inflation can only exceed Treasury rates for so long before the tension gets too great and the rubber band breaks.

If the market is rational, sooner or later capital will look for a new home where the reward is proportionate to the risk, right?

[SoylentGreen]

On the Natural resources side..... I still think Nat Gas, Canadian Oil Sands and N. American Coal have more upside because there is so much of it and the fact that America and most industrialized nations will depend on those fossil fuel sources more as conventional Oil gets harder to get out of the ground.

another side note...the just failed IndyMac Bank wasnt even on the FDIC watch list....??????

[SoylentGreen]

Now the news is saying 150 US banks could fail.So how much more feces has to hit the fan to cause a depression?

[SoylentGreen]

Im hearing Wachovia and US Bancorp are all but toast, Wash. Mutual in deep doodoo too

[SoylentGreen]

Five Top Stories on Yahoo Business??????8am 7/17/08
> JP Morgan Profits down 53% in 2nd Qtr. due to bad loans
> Coca Cola profit drops 23% in 2nd Qtr
> Continental Airlines has loss in 2nd Qtr due to fuel costs.
> How Bad is it? Some say worse since great depression.
> Stocks Head Higher on Upbeat earnings results.

WTF?


SEC also prohibited naked short selling on 19 stocks. Lehman,Bear Sterns,Fannie Mae ,Freedie Mac, and 15 other financial companies who are responsible for the martgage crisis. Last time SEC did this....1931.