Markets woes- blame the scarity American consumer

[PAPA ROACH]

Spoken like a true bull that is underwater in his trading/investment portfolio, lashing out at everyone for their failure to spend like drunken sailors. Little does he know the rum ran out awhile ago and the party is over. Now all there is left is a bunch of hung over fools adrift on an ocean, wondering where the next bottle is. You can always tell a posters position by the desparation of his written word.

I laughed all the way to the bank!!!

Quote from day7793:

American consumer is a scarity cat.

Fearful, unsure, running at the slightest noise and a total wimp. American consumer does not have balls, its a soft baby with pink feet and a fragile ego. Slightest of adversity spooks the be juses out of him. Having grown up with a silver spoon and golden parachute of welfare system attached to its umblical cord he cannot face life when it get rough or when the rough gets going.

What does the American consumer do at the slightest dark cloud on the horizon? He freezes like a deer in the headlights. He is sacred to death about horrible consequences that hardly materialize. He stops SPENDING MONEY and sulks in a corner waiting for a green signal that all is well and he can cross the street. American consumer's habits beguile and frustrate everyone, from realtors,bankers, lawyers, landscapers to construction workers.

What happened in the real estate market is prime example of this behavior since late 2005. The American consumers saw dark clouds on the horizon for some reason and froze in its tracks. He immediately stopped buying real estate with bit of greed set in his eyes for bargain. Instead he sought security in renting 1 bed shacks and passing the night under someone else's roof. The magnitude of such a move killed the fledging real estate market and than the banking and mortgage lifeline attached to it.

Things started going worse and he became ever more fearful and scared. Pretty soon lenders had no business, they started going belly up and than the sub prime mess shit hit the fan in the summer of 2007. Since than it started effecting changes in the equities market and stock markets responded negatively and the overall general economy started get threatened by it. But since market has responded accordingly as expected, the neurotic consumer is now fully convinced that sky is about to fall and a talk about recession and obsession with doom gloom has taken hold of him. He is convinced and he is holding back spending on big ticket items like homes and cars etc.

If this scarity cats stops spending totally and tightens its belt further than I can bet the whole economy will be shattered and a recession will knock the winds out of the sails in America. And that is how American recessions usually start.

Lets hope our Government can coax this cat out of its hole into spending money and convince his fragile ego its Ok to come out and its not as dangerous as you have imagined. Lets hope he starts buying real estate and supported businesses starts spurting.

This is where the truth lies. How to deal with the American consumer ?

You can always take the horse to the water, but you can't make him drink. Hope we are wrong and the horse starts drinking.

 

[Lamont_C]

Quote from day7793:

I am an inhabitant of this country USA and I know my fellow Americans real well.

For how long? A few months? Given your writing, you could not possibly have gone to school here.

LC

 

[HedgefundTrader2]

Quote from PAPA ROACH:

Spoken like a true bull that is underwater in his trading/investment portfolio, lashing out at everyone for their failure to spend like drunken sailors. Little does he know the rum ran out awhile ago and the party is over. Now all there is left is a bunch of hung over fools adrift on an ocean, wondering where the next bottle is. You can always tell a posters position by the desparation of his written word.

I laughed all the way to the bank!!!

You speak as if you have some magical quality to know my portfolio? Little you know you are a full fledged idiot.

The market has not gone down and the recession has not come and those are facts. While the stupid consumer stops spending he can ring a death knell on all of us.

 

[HedgefundTrader2]

Quote from Lamont_C:

For how long? A few months? Given your writing, you could not possibly have gone to school here.

LC

You have magical powers dude. You know all about an Internet poster don't you?

Keep drumming your stupid conclusions and I will keep yanking your eyeballs little clown.

 

[PAPA ROACH]

Your incessant babbling and blame-mongering tell me exactly what is in your portfolio.

Here is a hint that might save you alot of money in the future:

http://www.investorwords.com/1641/economic_cycle.html

economic cycle
Definition

Predictable long-term pattern changes in national income. Traditional business cycles undergo four stages: expansion, prosperity, contraction, and recession. After a recessionary phase, the expansionary phase can start again. The phases of the business cycle are characterized by changing employment, industrial productivity, and interest rates. Some economists believe that stock price trends precede business cycle stages.

Quote from day7793:

You speak as if you have some magical quality to know my portfolio? Little you know you are a full fledged idiot.

The market has not gone down and the recession has not come and those are facts. While the stupid consumer stops spending he can ring a death knell on all of us.

 

[Misthos]

Quote from day7793:

a


You have no more discretionary income? What the hell they pay your for? So you can live well and have a house and car. But at some point you got greedy ( Honey I can get that house for $50,000 less) or fearful ( we donot have discretionary income) and stopped buying. Froze in the headlights like a deer and look where things are... even the stock market not doing too well.
Tail ( real estate ) wagging the dog ( stock market).

How do I know this ?

You are talking to a tight fisted mortgage banker and a trader in equities.

Now I understand. I guess telling you a little 'bout me will shed some light onto my views. And I also understand your anger - you're still in the mortgage biz and still in that denial/anger phase.

I too was in the mortgage business. Did well, and did the right thing. (Which means I made OK money not crazy money) Lost quite a few deals to dirtbags pushing Option Arms. Either way, saw the storm clouds coming and left the business.

Got a job, back on my feet, and beginning to trade on the side. Not manic mind you - My job takes a lot of my time - but I'm happy with it.

I left the mortgage business because I knew it was going to go through a massive correction not seen before. I remember the late 80s and the S&L crisis, the RTC.

And I thought, this is much bigger. Not a few wildcat savings and loans involved here, but global banks - and derivatives. And I thought "HOLY $HIT" this can really destroy the housing industry. (Much more if you ask me)

Also, I have watched our economy radically change. No more manufacturing, just pushing paper. A share of a company goes up we call it wealth. Gold goes up we call it inflation. Kinda strange.

We live in strange times. We rely on a middle class that is subjected to the most darwinistic side of capitalism, while those with the most capital - the big banks, privatize their gains and socialize their losses thru debt monetization. And we all pay.

I'm doing fine - but am extremely uneasy. As Joe Sixpac flounders, we will feel it too. Remember, I left this mortgage biz when I saw so many people on the edge of foreclosure, and I could do nothing to help them.

I am just a lurker here. Sorry to waste your time. I just visit this site for tips and learning.

But I'll tell you this. What you guys are doing - and I am envious, may not last. (I'm assuming worst case scenario)

No one knows how this mess will play out. I'm preparing for the worst, but not letting it change my life either.

Good luck all.

 

[PAPA ROACH]

In case your reading comprehension lacks, I will give you a visual reference to the economic cycle. It happens like this as sure as the sun rises, to bet against it is not only futile, but can be detrimental to your portfolio. Recognize where we are in the cycle and learn to profit from it. Markets never go one way forever dude.

 

[HedgefundTrader2]

Quote from PAPA ROACH:

In case your reading comprehension lacks, I will give you a visual reference to the economic cycle. It happens like this as sure as the sun rises, to bet against it is not only futile, but can be detrimental to your portfolio. Recognize where we are in the cycle and learn to profit from it. Markets never go one way forever dude.

I have no problem with that economic cycles. Real estate is cyclical and it always comes back and when it comes back it come back with vengeance unseen before- since there is this pent up demand built in, prices zoom and you pull your ejection buttons and eject with profits/

 

[Lamont_C]

Quote from day7793:

You have magical powers dude. You know all about an Internet poster don't you?

In your case, it's not difficult.

LC

 

[PAPA ROACH]

Quote from day7793:

I have no problem with that economic cycles. Real estate is cyclical and it always comes back and when it comes back it come back with vengeance unseen before- since there is this pent up demand built in, prices zoom and you pull your ejection buttons and eject with profits/

Real estate doesn't correct and rebound that fast, this will play out for awhile before there is a bottom. Check out japans real estate prices for a very good reference to what happens when prices deviate from the mean in a parabolic fashion.