Last post was on May 9th and i stated that
DOW is not going anywhere past 12500.
Before the memorial day weekend, DOW closed at 12487.
OIL $4 and grains/gold are still high.
Dick Bove states there is lot of capital but it is sitting on
the sidelines. Also he predicts the inflation calculated by
Reagan methods is 11% and not the 4% the govt claims.
He states that the capital is sitting on the sidelines with the soverign
funds and the money supply in the first quarter (M3) is explosive growing
at 16%.
9 may dow 12700
15 may dow 12992
19 may dow 13028
21 may dow 12601
23 may dow 12479.
from 19 thru 23 a fall of 4.3% 12479/13028
Tuesday, May 27, 2008
Friday, May 9, 2008
"Looks like a good runup and time market took a breather."
Is what i wrote last on April 25 Looks - Apri; 25 12891 DOW
May 09 - AIG screws up - Wants to raise 12 billion expected loss 0.76/sh cents
posts $3.09/sh loss. Down 8% in pre-market. OIL up $125.
I think the market is not going to go up beyond 12500 for sometime till OIL
subsides and the the credit crunch settles down.
Is what i wrote last on April 25 Looks - Apri; 25 12891 DOW
May 09 - AIG screws up - Wants to raise 12 billion expected loss 0.76/sh cents
posts $3.09/sh loss. Down 8% in pre-market. OIL up $125.
I think the market is not going to go up beyond 12500 for sometime till OIL
subsides and the the credit crunch settles down.
Friday, April 25, 2008
April 25th
From GE results (april 11) till today (April 25), S&P is up 4.2%, NASDAQ is
up 5.7%. What happened in between. GE bad, GOOG, CAT good, MSFT ok.
Looks like a good runup and time market took a breather.
Nobel Winner Stiglitz: US Facing Long Recession
Friday April 25, 12:16 pm ET
The U.S. economy is already in recession -- and may echo the 1930s, Nobel Laureate Joseph Stiglitz said Friday.
"The big question is: how will the government respond?" said Stiglitz, in an interview with CNBC. Stiglitz, a Columbia University professor and 2001 winner of the Nobel prize, detailed his bleak outlook for the American economy.
ADVERTISEMENT
"This is going to be one of the worst economic downturns since the Great Depression," said Stiglitz.
He explained that main cause of the current situation is historically unique -- and thus is befuddling those charged with creating solutions.
Other downturns were primarily caused by excesses in inventories or inflation; but this slowdown is due to the condition of "badly impaired" banks and financial entities, which are unwilling and/or unable to lend capital -- stymieing the very borrowers who usually drive the country back to vitality, Stiglitz said. And the Federal Reserve may have used up its ammunition -- and the faith investors and planners have put in it.
"[The Fed] will be between a rock and hard place. And we're not over-worrying about credit. But [simultaneously], we need to start worrying about the real sector," he said.
And if inflation wasn't the prime recession cause, it's still a menace. The professor points to the two-pronged danger of high oil prices joined by climbing food prices, harming businesses and scaring consumers.
"Oil is particularly bad," as it means that more U.S. dollars "will be going abroad," he said.
The housing downturn is an even worse economic factor than casual observers realized, Stiglitz said. He explained that during the real estate boom, Americans were able to withdraw billions of dollars from their home equity.
"[But] with housing prices coming down, it's going to be difficult to do that anymore," he said -- drying up a spending source. And within that problem, still another complication: people typically spent the money they drew off their home equity on consumption, rather than investment -- garnering no return on the spending.
"The savings rate as we go into the recession is zero. Which means [savings] will go up, " he said -- decreasing consumer spending and weakening retail further.
What about the government stimulus package?
"The Bush Administration's response is too little, too late -- and very badly designed," he declared. The amount ostensibly being infused into the economy by tax rebate checks will be a "drop in the bucket" compared to the money being held back and siphoned out by the factors he mentioned.
"If you really wanted to stimulate the economy, increase unemployment insurance," he suggested.
"The president is telling people to go out and get jobs -- and there are no jobs for them," he said.
up 5.7%. What happened in between. GE bad, GOOG, CAT good, MSFT ok.
Looks like a good runup and time market took a breather.
Nobel Winner Stiglitz: US Facing Long Recession
Friday April 25, 12:16 pm ET
The U.S. economy is already in recession -- and may echo the 1930s, Nobel Laureate Joseph Stiglitz said Friday.
"The big question is: how will the government respond?" said Stiglitz, in an interview with CNBC. Stiglitz, a Columbia University professor and 2001 winner of the Nobel prize, detailed his bleak outlook for the American economy.
ADVERTISEMENT
"This is going to be one of the worst economic downturns since the Great Depression," said Stiglitz.
He explained that main cause of the current situation is historically unique -- and thus is befuddling those charged with creating solutions.
Other downturns were primarily caused by excesses in inventories or inflation; but this slowdown is due to the condition of "badly impaired" banks and financial entities, which are unwilling and/or unable to lend capital -- stymieing the very borrowers who usually drive the country back to vitality, Stiglitz said. And the Federal Reserve may have used up its ammunition -- and the faith investors and planners have put in it.
"[The Fed] will be between a rock and hard place. And we're not over-worrying about credit. But [simultaneously], we need to start worrying about the real sector," he said.
And if inflation wasn't the prime recession cause, it's still a menace. The professor points to the two-pronged danger of high oil prices joined by climbing food prices, harming businesses and scaring consumers.
"Oil is particularly bad," as it means that more U.S. dollars "will be going abroad," he said.
The housing downturn is an even worse economic factor than casual observers realized, Stiglitz said. He explained that during the real estate boom, Americans were able to withdraw billions of dollars from their home equity.
"[But] with housing prices coming down, it's going to be difficult to do that anymore," he said -- drying up a spending source. And within that problem, still another complication: people typically spent the money they drew off their home equity on consumption, rather than investment -- garnering no return on the spending.
"The savings rate as we go into the recession is zero. Which means [savings] will go up, " he said -- decreasing consumer spending and weakening retail further.
What about the government stimulus package?
"The Bush Administration's response is too little, too late -- and very badly designed," he declared. The amount ostensibly being infused into the economy by tax rebate checks will be a "drop in the bucket" compared to the money being held back and siphoned out by the factors he mentioned.
"If you really wanted to stimulate the economy, increase unemployment insurance," he suggested.
"The president is telling people to go out and get jobs -- and there are no jobs for them," he said.
Sunday, April 13, 2008
GE saga
After the BSC saga, C got some funding from private equity,
Wamu got some and the stock market went up from the low of
1270 to 1370.
Most magazines were blaring that we had seen the bottom.
Then comes GE with a warning and the stock tanking 20%.
In a way, that is good for me since i am short GE.
Inflation, 80000 jobs lost in march (3rd month down in a row)
and what is going to cause this market to stablize of go up?
There seems to be enough cash in the sidelines, but a good chunk of
this may be smart cash.
Wamu got some and the stock market went up from the low of
1270 to 1370.
Most magazines were blaring that we had seen the bottom.
Then comes GE with a warning and the stock tanking 20%.
In a way, that is good for me since i am short GE.
Inflation, 80000 jobs lost in march (3rd month down in a row)
and what is going to cause this market to stablize of go up?
There seems to be enough cash in the sidelines, but a good chunk of
this may be smart cash.
Tuesday, April 1, 2008
April 01 2008
Just yesterday,i was feeling that i should pare down
the debt for vehicle. With DOW up 400 today, it appears natural to feel
that i should jump headlong into stks.
UP's make you feel regret for not getting earlier, DOWN makes
you feel that it is still not down to cover your shorts.
Volatility causes so much vacillation that it makes sense to
have a PP slide that clearly spells what one needs to do.
the debt for vehicle. With DOW up 400 today, it appears natural to feel
that i should jump headlong into stks.
UP's make you feel regret for not getting earlier, DOWN makes
you feel that it is still not down to cover your shorts.
Volatility causes so much vacillation that it makes sense to
have a PP slide that clearly spells what one needs to do.
Tue April 01 2008 DOW UP 400
Up's are getting bigger. Downs are getting smaller.
Short term market seems to be going up.
Next leg down, cover ge, close sds and start going long slowly.
Short term market seems to be going up.
Next leg down, cover ge, close sds and start going long slowly.
Monday, March 31, 2008
WHEN the going gets bad, it is a freefall.
When the going gets good, everyone rolls in $$$ and overextend.
When it gets bad, it is a freefall.
Careers vanish after subprime 'free fall'
Kent and Mysti Cope were well-paid executives at subprime lenders who never thought the industry could disappear overnight. Now they're just trying to get by.
EMAIL | PRINT | DIGG | RSS Subscribe to Economy
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See all CNNMoney.com RSS FEEDS (close) By Chris Isidore, CNNMoney.com senior writer
March 31, 2008: 5:30 AM EDT
Mysti and Kent Cope met when both worked at subprime lender New Century. Both lost their jobs last year when the industry collapsed.
Getting back in the job game
More Videos
--------------------------------------------------------------------------------
Homes for sale - cheap
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America's Money: In their own words
Everyday folks tell their stories about hard economic times. Check back frequently for new stories.
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Current Mortgage Rates
Type Overall avgs
30 yr fixed mtg 5.75%
15 yr fixed mtg 5.27%
30 yr fixed jumbo mtg 7.16%
5/1 ARM 5.67%
5/1 jumbo ARM 6.36%
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Fed up with the Fed
What would you ask Big Oil?
Color therapy to beat recession blues
Paulson offers sweeping rule changes
Careers vanish after subprime 'free fall'
SAN CLEMENTE, Calif. (CNNMoney.com) -- Kent and Mysti Cope met and fell in love working for one of the nation's top subprime lenders. Now, their life has been turned upside down after the sudden implosion of the subprime mortgage industry.
Mysti was one of the last people out the door at New Century Financial, once the nation's No. 2 subprime lender. She had been in charge of e-commerce customer service with dozens of employees reporting to her. It was at New Century where the Copes met in 2000.
Kent worked for several of the firms that helped give birth to the industry, which specializes in making loans to people with less-than-perfect credit, in the 1990s. He has been out of work since August when he was laid off by Friedman, Billings, Ramsey Group (FBR) unit First NLC Financial Services.
"We're still both in shock that it could go from something so good to so bad so quick," said Kent, 59. "New Century in 60 days went from top of the heap to out of business."
The two didn't say exactly how much money they made at their last jobs but Kent admitted they each had six-figure incomes.
Today, they're trying to get by on his unemployment benefits of about $450 a week, which covers only about an eighth of the basic payments they owe every month.
Only $1,800 to cover $10,000 in bills
Their home equity line, mortgage, health and life insurance premiums alone cost about $10,000 a month. Still, they are trying to hang onto what they call their dream home with a view of the Pacific Ocean where they live with Mysti's 11-year old son.
Kent estimates the mountainside home in San Clemente, Calif., which they bought in 2005, is worth 20% less than it was a year ago. And in the current market, he said he's not sure he could sell it for even that amount.
"We've used up most of our reserves, cashed in her 401K," said Kent. "We're going Mach 1 into a wall. When we run into it, then we've got to decide what to do next."
Despite their financial problems, the Copes have worked hard to protect their credit rating, staying current on bills. And they've made cutbacks: trading in Kent's Corvette for a Suburban and getting rid of the gardener, for example. But the couple also has learned that it didn't need everything it used to spend money on.
"We used to eat out a lot. Now we are the leftover king and queen," said Kent.
Since he lost his job, Kent has gotten a real estate license and is trying to start a business selling the rapidly increasing inventory of foreclosed homes in Orange County, Calif. Mysti is trying to build an online business selling jewelry and beachwear, some of which she designs herself.
"Is it scary? Yeah," said Kent. "How long do you have to hold on before it starts to turn around? If anything, that piece of it is the most unnerving for us."
For Mysti, 37, all her efforts to find work since she lost her job last May have been futile. She said she believes the attention given to subprime borrowers who have run into trouble paying their mortgages work against her and other former colleagues. It's almost like having "Enron" on your resume.
"The media has somewhat tarnished the subprime industry and all the employees, and portrayed them as being dishonest," she said. "We're not dishonest. Not everybody was a bad borrower. Not every company was a bad lender."
Hopes of hanging on to jobs quickly dashed
Mysti said she and many other employees who survived the early rounds of layoffs at New Century thought they'd be able to ride out the bad times even after the firm stopped taking new mortgage applications in March of last year and filed for bankruptcy in April.
"We were New Century. We were a large corporation. We were the No. 2 subprime lender in the industry," she recalled. "You figured someone would come in and want to invest and take it over."
But the potential buyers soon disappeared as did the remaining jobs. She and her co-workers got word on May 3 that they were being laid off, effective the next day.
Kent's story is similar. Throughout last summer, he tried to keep up the morale of the 150 sales people he had reporting to him. Friedman Billings had a deal to sell First NLC Financial Services to Sun Capital Partners, the private capital firm that had sold it to them only two years before. So there was hope. Or so he thought.
"We knew we're going to lose money, we were just going to try to not hemorrhage," he said. "That's the message we all had to deliver to our troops -- Sun Capital is going to come in, they're behind us, they wouldn't be buying us if they didn't think we could ride out the storm," Kent recalled.
But by August it was apparent that deal was no longer going to happen, and he too was laid off.
For some, getting laid-off is better than still working
The Copes are just two of many in Orange County, formerly the center of the nation's subprime lending industry, now trying to move on. Nearly 9,000 jobs have been lost there in the past year, with more than 4,000 alone in Irvine, where New Century was based.
But the damage extends far beyond those like the Copes who lost their jobs.
"You can't run into someone who isn't impacted by what's going on," said Kent. "It's very expensive to live in Orange County, and you pay a lot for your home and you can't get what it's worth now."
Some of their former colleagues found jobs with other lenders, only to get laid off again when those firms closed up. Kent said some of the sales people he knows who still have jobs are actually the worst off.
"They may be employed by a company for months and months, but they can't close a deal," he said. "They've got the borrowers, but unless that thing is pure gold, it isn't made. It's a commission business. They're to the point frankly where they would rather get laid-off so they can go collect unemployment than be employed and make no money."
The subprime industry in Orange County was a close-knit close cluster of lenders. The industry rapidly expanded as executives at one firm would strike out on their own and setup shop nearby. But the industry fell apart even more quickly.
The Copes and their colleagues tracked the collapse through rumors and Web sites, such as lenderimplode.com.
"You kept looking everyday to see if your company was on there or not," said Kent. "It seemed like every day there was a company going under."
"You know you could take a roller coaster ride down," he said. "But you never envisioned it could be a free fall."
Welcome to subprime's ghost town
10 resumes a day, no takers
When it gets bad, it is a freefall.
Careers vanish after subprime 'free fall'
Kent and Mysti Cope were well-paid executives at subprime lenders who never thought the industry could disappear overnight. Now they're just trying to get by.
EMAIL | PRINT | DIGG | RSS Subscribe to Economy
feed://rss.cnn.com/rss/money_news_economy.rss
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close) By Chris Isidore, CNNMoney.com senior writer
March 31, 2008: 5:30 AM EDT
Mysti and Kent Cope met when both worked at subprime lender New Century. Both lost their jobs last year when the industry collapsed.
Getting back in the job game
More Videos
--------------------------------------------------------------------------------
Homes for sale - cheap
More VideosPhotos
America's Money: In their own words
Everyday folks tell their stories about hard economic times. Check back frequently for new stories.
View photos
Current Mortgage Rates
Type Overall avgs
30 yr fixed mtg 5.75%
15 yr fixed mtg 5.27%
30 yr fixed jumbo mtg 7.16%
5/1 ARM 5.67%
5/1 jumbo ARM 6.36%
Find personalized rates:
Fed up with the Fed
What would you ask Big Oil?
Color therapy to beat recession blues
Paulson offers sweeping rule changes
Careers vanish after subprime 'free fall'
SAN CLEMENTE, Calif. (CNNMoney.com) -- Kent and Mysti Cope met and fell in love working for one of the nation's top subprime lenders. Now, their life has been turned upside down after the sudden implosion of the subprime mortgage industry.
Mysti was one of the last people out the door at New Century Financial, once the nation's No. 2 subprime lender. She had been in charge of e-commerce customer service with dozens of employees reporting to her. It was at New Century where the Copes met in 2000.
Kent worked for several of the firms that helped give birth to the industry, which specializes in making loans to people with less-than-perfect credit, in the 1990s. He has been out of work since August when he was laid off by Friedman, Billings, Ramsey Group (FBR) unit First NLC Financial Services.
"We're still both in shock that it could go from something so good to so bad so quick," said Kent, 59. "New Century in 60 days went from top of the heap to out of business."
The two didn't say exactly how much money they made at their last jobs but Kent admitted they each had six-figure incomes.
Today, they're trying to get by on his unemployment benefits of about $450 a week, which covers only about an eighth of the basic payments they owe every month.
Only $1,800 to cover $10,000 in bills
Their home equity line, mortgage, health and life insurance premiums alone cost about $10,000 a month. Still, they are trying to hang onto what they call their dream home with a view of the Pacific Ocean where they live with Mysti's 11-year old son.
Kent estimates the mountainside home in San Clemente, Calif., which they bought in 2005, is worth 20% less than it was a year ago. And in the current market, he said he's not sure he could sell it for even that amount.
"We've used up most of our reserves, cashed in her 401K," said Kent. "We're going Mach 1 into a wall. When we run into it, then we've got to decide what to do next."
Despite their financial problems, the Copes have worked hard to protect their credit rating, staying current on bills. And they've made cutbacks: trading in Kent's Corvette for a Suburban and getting rid of the gardener, for example. But the couple also has learned that it didn't need everything it used to spend money on.
"We used to eat out a lot. Now we are the leftover king and queen," said Kent.
Since he lost his job, Kent has gotten a real estate license and is trying to start a business selling the rapidly increasing inventory of foreclosed homes in Orange County, Calif. Mysti is trying to build an online business selling jewelry and beachwear, some of which she designs herself.
"Is it scary? Yeah," said Kent. "How long do you have to hold on before it starts to turn around? If anything, that piece of it is the most unnerving for us."
For Mysti, 37, all her efforts to find work since she lost her job last May have been futile. She said she believes the attention given to subprime borrowers who have run into trouble paying their mortgages work against her and other former colleagues. It's almost like having "Enron" on your resume.
"The media has somewhat tarnished the subprime industry and all the employees, and portrayed them as being dishonest," she said. "We're not dishonest. Not everybody was a bad borrower. Not every company was a bad lender."
Hopes of hanging on to jobs quickly dashed
Mysti said she and many other employees who survived the early rounds of layoffs at New Century thought they'd be able to ride out the bad times even after the firm stopped taking new mortgage applications in March of last year and filed for bankruptcy in April.
"We were New Century. We were a large corporation. We were the No. 2 subprime lender in the industry," she recalled. "You figured someone would come in and want to invest and take it over."
But the potential buyers soon disappeared as did the remaining jobs. She and her co-workers got word on May 3 that they were being laid off, effective the next day.
Kent's story is similar. Throughout last summer, he tried to keep up the morale of the 150 sales people he had reporting to him. Friedman Billings had a deal to sell First NLC Financial Services to Sun Capital Partners, the private capital firm that had sold it to them only two years before. So there was hope. Or so he thought.
"We knew we're going to lose money, we were just going to try to not hemorrhage," he said. "That's the message we all had to deliver to our troops -- Sun Capital is going to come in, they're behind us, they wouldn't be buying us if they didn't think we could ride out the storm," Kent recalled.
But by August it was apparent that deal was no longer going to happen, and he too was laid off.
For some, getting laid-off is better than still working
The Copes are just two of many in Orange County, formerly the center of the nation's subprime lending industry, now trying to move on. Nearly 9,000 jobs have been lost there in the past year, with more than 4,000 alone in Irvine, where New Century was based.
But the damage extends far beyond those like the Copes who lost their jobs.
"You can't run into someone who isn't impacted by what's going on," said Kent. "It's very expensive to live in Orange County, and you pay a lot for your home and you can't get what it's worth now."
Some of their former colleagues found jobs with other lenders, only to get laid off again when those firms closed up. Kent said some of the sales people he knows who still have jobs are actually the worst off.
"They may be employed by a company for months and months, but they can't close a deal," he said. "They've got the borrowers, but unless that thing is pure gold, it isn't made. It's a commission business. They're to the point frankly where they would rather get laid-off so they can go collect unemployment than be employed and make no money."
The subprime industry in Orange County was a close-knit close cluster of lenders. The industry rapidly expanded as executives at one firm would strike out on their own and setup shop nearby. But the industry fell apart even more quickly.
The Copes and their colleagues tracked the collapse through rumors and Web sites, such as lenderimplode.com.
"You kept looking everyday to see if your company was on there or not," said Kent. "It seemed like every day there was a company going under."
"You know you could take a roller coaster ride down," he said. "But you never envisioned it could be a free fall."
Welcome to subprime's ghost town
10 resumes a day, no takers
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