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Kass: Why the Bears Are Wrong
- Thread starter aresky
- Start date
- I wouldn't be so sure about this.Quote from gnome:
An entire echelon of consumers were "borrow and spend to the hilt"... they are gone.
- I wouldn't be so sure about this.Quote from gnome:
Lenders won't give them the chance to default AGAIN...
- I wouldn't be so sure about this.Quote from gnome:
The rest of us won't be "motivated" to become borrow-and-spenders regardless of interest rates or Gummint pleas for expanding credit.
- This comment I can dig.Quote from gnome:
Boomers are getting into retirement age, but are not financially prepared. They'll be spending what they can, of course... but it will be on utility bills and Raisin Bran.
Quote from gnome:
That too.
Disclosure: I shorted SPG way too low and am eating a small loss, but today the S&P was rallying and SPG was not moving with it towards the second half of the trading day. Institutional sellers moved in and cranked it down a notch and it's moved back towards the upper end of its trading channel.
So clearly, someone out there is still selling this, and selling with enough force as to stop the usual ebb and flow of normal trading, where the stock tracks the index at roughly some multiple. They're just gearing up for when the index itself capitulates.
If we assume I caught a real signal, then there are market players still looking to take down commercial real estate further than it really is. The current market move is only because the financials will have better looking books, but it has no bearing on everything else going on in the economy. I expect the market to account for this and turn right around.
Quote from lolatency:
Don't get why consumer spending will rebound on account of more lending. More unemployed people, more people with wrecked credit, and more foreclosures on the way [mortgage resets.] If spending doesn't increase, it doesn't matter that the financial sector is back to normal. Don't forget commercial real-estate. They will get socked during the poor-spending cycle.
Exactly right, many believe that once banks start lending again that consumer spending will pick back up, that is just insane to think that, the reason the markets are 50% off their highs and unemployment and foreclosures continue to move higher is because of excess liquidity and easy credit given to consumers over the last decade.
Quote from lolatency:
Disclosure: I shorted SPG way too low and am eating a small loss, but today the S&P was rallying and SPG was not moving with it towards the second half of the trading day. Institutional sellers moved in and cranked it down a notch and it's moved back towards the upper end of its trading channel.
So clearly, someone out there is still selling this, and selling with enough force as to stop the usual ebb and flow of normal trading, where the stock tracks the index at roughly some multiple. They're just gearing up for when the index itself capitulates.
If we assume I caught a real signal, then there are market players still looking to take down commercial real estate further than it really is. The current market move is only because the financials will have better looking books, but it has no bearing on everything else going on in the economy. I expect the market to account for this and turn right around.
One more thing, this guy (SPG) is overvalued because the company announced it was issuing more shares at $31.50. IMO, $31.50 is still a pipe dream. These guys are -screwed- in 2009, and this is on top of their dilution that they've pushed. All the people who received their shares as a function of the dividend are likely going to sell also. Big players are going to push this thing into the dirt, imo ~$10/share or worse.
Quote from S2007S:
Exactly right, many believe that once banks start lending again that consumer spending will pick back up, that is just insane to think that, the reason the markets are 50% off their highs and unemployment and foreclosures continue to move higher is because of excess liquidity and easy credit given to consumers over the last decade.
How can you be sure consumer spending won't pick back up? I think you are overestimating the intelligence of most people...
Once the economy appears to be back on track, asset values stablize, and the media stops predicting the end of the world, I think most consumers will forget all about the crash and resume life as it was before this mess. It is entirely possible another credit bubble will be created.
As strange as this may sound, even after this mess and what we've learned, I'm not sure the average consumer has learned the lesson of easy credit. If banks are once again willing to dish it out, consumers will keep on taking it in.
Quote from Kassz007:
How can you be sure consumer spending won't pick back up? I think you are overestimating the intelligence of most people...
Once the economy appears to be back on track, asset values stablize, and the media stops predicting the end of the world, I think most consumers will forget all about the crash and resume life as it was before this mess. It is entirely possible another credit bubble will be created.
As strange as this may sound, even after this mess and what we've learned, I'm not sure the average consumer has learned the lesson of easy credit. If banks are once again willing to dish it out, consumers will keep on taking it in.
Because unemployment will only get worse. GM just sent out pink slips to white collar employees. GM goes, supply chain goes, and we're looking at 3mil+ more jobs gone. There's a consumer spending contraction in place.
Second, if China does start to move to kill the dollar, the cost of consumer goods will go up. They can't maintain that loose-peg. If consumer buying power goes down, we get hit with a double whammy over top of the unemployment. Clearly, China is not pleased with the way the US is managing things. They're going to try and save their investment.
Quote from Kassz007:
How can you be sure consumer spending won't pick back up? I think you are overestimating the intelligence of most people...
Once the economy appears to be back on track, asset values stablize, and the media stops predicting the end of the world, I think most consumers will forget all about the crash and resume life as it was before this mess. It is entirely possible another credit bubble will be created.
As strange as this may sound, even after this mess and what we've learned, I'm not sure the average consumer has learned the lesson of easy credit. If banks are once again willing to dish it out, consumers will keep on taking it in.
It might pick back up but I see no way of any economic expansion based on this just alone. This is not a crisis that will be forgotten sometime in 2009 or 2010, this is an economic downturn that will take many years to unfold. Yes we may see the economy stabalize and see some signs of growth once again, but that will be limited as well, the boom in the economic cycle that we have been through over the last 20-25 years has come to an end. Easy credit is history, and if anyone thinks easy credit is the only way to jump start an economy like I feel they are doing at this very moment, is an idiot.