November 19, 2008

Soot and Ashes Quote of the Day

"Prices are in a virtual freefall. Either the market is right and expecting a default rate considerably higher than it was in the Great Depression, or we have such profound dislocations and selling pressures going on that it really is creating extraordinary fundamental value"

- Martin Fridson, chief executive officer of money management firm Fridson Investment Advisors, November 19, 2008

So which is it gonna be Sashers? The buying opportunity of a lifetime, or a depression even worse than the Great Depression? Which is it gonna be...? (thanks Mark)


Anonymous said...

The Greater Depression. We consume more then we produce!

George L said...

it's going to be "the great recession " or "the great depression-lite"

but either way very the way is anybody buying financials long term?

Anonymous said...

Don't worry, be happy. In six months debt burdens will be 10% of what they are today, all courtesy of a New Deal II. The trick is to be out of USD treasury paper by June 1st 2009.

Anonymous said...

My vote is for greater depression. I don't see "value" in the markets yet.

Anonymous said...

This will be a horrendous depression. 1960 living standards minus infinity due to lack of manufacturing. What kind of deflation gets you there. What kind of damage does that deflation do to an already destroyed economy. Talk about burning the furniture to heat your 5000 sq foot macmansion. Hey you can burn the tires off the hummer or Escalade. Can't afford gas anyway.

signed: Debt free hayseed. PS I don't even own a giant flat screen tv with the high def thingy.

Owner Earnings said...

Link to a post on Today's Market Action and What To Anticipate Tomorrow

Anonymous said...

I think the ones in charge have decided to let it go to rock bottom and hope there's a reset button to push. I vote stone age.

Malcolm said...

Buyers are in a panic, holding on to their money, avoiding stocks, driving all the prices down.
With GM and Ford as low as their are, it's almost worth gambling a few thousand $. IF they can survive, you're bound to make a few bucks with as low as they are.
Other than that, Cash.

Afterthought said...

When our collective polity chooses pain, that will be the bottom.

Anonymous said...

Value in the housing market? It's just not there. As the mortgages got more "creative" that allowed higher prices while the home sits there. It does not gain _value_ unless legitimately improved. (granite countertops don't count)

Value does not equal what some idiot with an exploding mortgage is willing to pay. Note that foreclosures are STILL accelerating. BTW, swimming pools don't add value unless the pool is maintained - and banks don't maintain pools. Result? West Nile becomes a disease of the rich! Just go to Google and throw in "foreclosures" and "mosquitoes" and have fun.

Batman said...

So do we retest the Oct 9 bottom tomorrow? This could be interesting.

Anonymous said...

I thought the point in the hearings today was a good shot. Why didn't they take one jet? Why wouldn't they sell the jet before going home and fly commercial?

If we (society) want to avoid the "pain" lots of people are suddenly required to talk about, why not economize, across the board? Compromise - across the board.

Balance deflation with inflation, so that the (national) pay cut across the board, which is part of the compromise that eases credit markets and lets company's survive, is off set by the devaluation of the dollar and potention inflation.

The debt just gets let the now proverbial tool bag floating in space.

People have suggested not paying taxes, or not going to how about a law so blunt it's perfectly understandable, but also temporary.

"We the people of the world, given the choice, have decided to decree that we will no longer indulge in excess and profit, but rather, defer our accumulation of stuff until that which we've acquired is paid off - rather than go through what we know will be an extremely ugly, international experience."

We are actually getting down to "make or break" time, so we better do something...even if it's wrong.

Anonymous said...

Wow, it just looks really bad out here.

If you could have had a glimpse 5 years ago at today's consitant headlines on a regarding how every apect of the economy is falling apart, you would not have believed it.

Now we are here, living in it and I think there is a bit of a disconnect where we know it is bad, but we have yet to really feel how bad it is and will get.

Mark in San Diego said...

Considering Hoover left Roosevelt with a pretty balanced budget at least, it was easy for Roosevelt to crank up the printing presses. . .the 1920's were without a war, a period with few expensive social programs, prosperous, with good tax revenue. . .NOW - broke USA, broke states and local governments, broke consumers, broke banks. . .doesn't take a genius to figure the "mother of all depressions."

YoungExec2B said...

Can't it be both?

Roccman said...






still thinking keith...

7 billion...?



working on it keith.


ok - war.

and a really big and nasty one.

oh and ...?


yes death...

lots of dead people.

I would go long Hillenbrand Industries.


So to answer your question.


vanilla ice said...

1/3 Great Depression. For most people that means a lot of pain because they've cannot remember experiencing any economic downturn.

This downturn will feel so much worse because we are falling off such a high.

Paul E. Math said...

This is really looking bad. It hasn't looked this bad since, oh, last week.

The question you have posed is doing my head in just like the inflation v. deflation debate did my head in.

I think the inflation v. deflation debate was tough because the answer was a 3rd unstated option: both. Is that also the answer to this depression v. opportunity question? I think so.

casey said...

we are far from a depression.keep renting you pos shack and jerking off to danceing w/ the stars.some of you people here are so clueless.

Anonymous said...

"1960 living standards minus infinity due to lack of manufacturing."

LOL! OK buddy, whatever...

investorinpa said...

I am going to tell the honest truth here...I have no fricking clue. We could be in a state of "downward pressure" with no growth (stagdisinflation) or the Muddle Through economy as John Mauldin says we'll probably soon enter. I just don't know. It makes this very difficult to prepare. You almost want to allocate yourself to 45% cash, 40% gold/silver/hard assets, and 15% cheap liquid stocks.

bobby lee johnson said...

it's going to be the great depression since the stock market boom was fueled by leverage. i.e. GM could do stock buy backs with borrowed money, etc... this shell game is over since the boomers are going to retire so America's intellectual peak was hit and that means America's output has peaked unless "the smaller workforce" somehow figures out how to do a lot more with less.

Anonymous said...

Ok , I hate bail outs and wasted money ,but now I'm in favor of keeping us out of the Great Depression . Ok, so that might mean
giving a loan to the Car-makers,so be it . Think about the unemployment insurance costs of 3 million unemployed . Think about the fact that the government is liable for
the underfunded insurance accounts on retirement benefits anyway .

The car-makers can adapt and come up with energy savings cars and no doubt there will be a market for them ,even if it isn't until 3 or 5 years from now . I don't think that Americans really want to give up the car .Also no excuse for the car companies not putting away the money they promised ,but the government let them do it .

I would actually be willing to buy a American car ,just to keep American workers working ( OK I'm a jerk that way ).

Look ,I don't want a bunch of people walking the streets unemployed ,or old people eating cat food .

If you look at the root of all the evil ,it was government not keeping to sound requirements of the out of whack Corporations and Wall Street Lender greed machines . The lobbyist are the great evil behind the curtain . Capitalism will always go haywire if it isn't regulated ,history has proven that ,
Unchecked Globalism and lack of control over money supplies was a great evil . Did the planning departments control unchecked building

Part of the function of Government is to promote the general welfare under a Capitalism system ....that means regulations . Part of the function of the police is to enforce laws . We don't get rid of laws and the police and expect people to regulated themselves do we(?), we know how human nature is . Government has failed in part because of the power brokers .

The people are a bunch of brain-washed people who have been screwed by the forces that controlled them going to far .

The average American is pissed right now because of the betrayal of Corporations , Wall Street ,and the Government . To bad the sheep didn't say screw you when Wall Street marketed the Housing Boom with a greed that knew no bounds .

Ross said...

Since we are going nostalgic today, I have to say that I can't believe the conversations I'm hearing on CNBC.

I wish I could skip back in time one year and show the world a tape of today's FAST MONEY.

They are all fretting over deflation and how devastating its effects can be because of the unknown.

The whole panel argues about whether or not BofA is a good buy with a 10% yield. 10%!! Google is at $275 today. $275!!

One of these boobs said that deflation actually causes more uncertainty than inflation. Maybe he's right, but only because all we know as consumers is inflation. Target, Best Buy, Sears and other major retailers are having their very survival questioned.

Jeff Macke(bald guy) just suggested we should invade Canada. "That should cause some stimulus."

I keep picturing the scene from Back to the Future II, where the old guy in the parking lot tells Marty he wishes he could go back in time and put some money on the Cubbies.

Anonymous said...

"Anonymous said...
Ok , I hate bail outs and wasted money ,but now I'm in favor of keeping us out of the Great Depression ."

Now you are? Magnanimous of you. Too Late. Unemployment line is over there by the Ladies Room...


Anonymous said...

My husband talked about a depression in 2005 due to the housing effects .I think he will turn out to be right. I thought he was smart but not that smart hehe . There is light here in Fl. lol

Anonymous said...

"...this shell game is over since the boomers are going to retire so America's intellectual peak was hit..."

Yeah, all those boomers with 60K of savings, reduced to 30K in the current market, are going to retire.

Please. Not only do boomers lack the intellectual capacity to operate in today's technical world, they can't retire. The 60-something in my department at work just bought a shiny new vehicle and has to pay $200/mo to make up for his pathetic lack of savings. Not only is he broke, he has no idea of how to do anything other than complain all day long and bully people who don't have the 'nads to stand up to him.

Lost Cause said...

No, no, no, no! You are going to look back at 2009 as the year that made you rich. There are going to be many buying opportunities. Wait until spring and summer. It is going to be bad until then.

Anonymous said...

In a GREAT DEPRESSION the longer you wait the cheaper the thing you want to buy will become.

If your cup is half full then you could think of it as going to Macy clearance rack and then getting an addition 50% off and extra 10% if you have a Macy card.

It is like going shopping the day after Thanksgiving when retailers cut the prices for the early birds; except in a GREAT DEPRESSION each day you wait the lower the sell price will be.

So if you want a sell price on your luxury items just wait several months and you will give yourself another discount.

The median price of the houses sold in Santa Clara County last month was $515,250, plunged 34 percent from a year earlier, according to MDA DataQuick, which gathers its information from public records of completed sales.

Contra Costa County's median house price plunged 49 percent,to $275,000

San Mateo County's median price of houses plunged 26 percent last month,to $642,500

Alameda County's median prices of house plunged 39 percent,to $380,000

yu been skooled said...

Malcolm is correct...

A+ for you Malcolm.