Or, for your consideration, is it possible to interrupt the cycle, and skip from "Fear" to "Hope" by spending $10 trillion plus to push off the problem to another day.
You know, like Bush and Greenspan did after 9/11?
Years from now, we'll look back at these posts and laugh.
Those of us who survived.
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45 comments:
OK, you guys are starting to convince me that we're only in "Fear" stage. Wow. If that indeed is the case, can you even picture what is to come?
Here in northeast Wisconsin people are starting to feel a little anxiety what with all the layoffs on the news. But we haven't reached the point of fear yet.
Kenduffelsniffenspotzen
http://www.youtube.com/watch?v=Vfyw1hAkgfY
You know how the conventional wisdom on Wall Street goes that "every bull market has to climb a wall of worry"? Well, I firmly believe the reverse is also true. A slow downward slide isn't nearly as terrifying as a roller coaster ride. The Stimulus and Mortgage Rescue legislation will give us that little bit of rise that makes the next big drop truly terrifying.
I'm still stocking my bunker with imported beer... so everything is fine.
Here in West LA, I'd say people are somewhere between denial and fear. Restaurants are still hopping, and the one-week-old movie I went to last weekend was nearly full.
Buy a safe and a gun. Stock up on canned foods and prepare for the zombies (housing porn idiots).
Seems to be the only thing to do with your money now.
Speaking of zombies, would a 9mm take them down? Or is it time to upgrade?
THE real question is:
Can YOU picture it?
DIE
Be Prepared.
That is their 'plan' for lack of a better word. The powers that be want a slow descent. The stimulus and the train of bailouts yet to come is designed to gradually let everything back down. Of course it will be paid for over the next 40 years.
That is the 'best case scenario', a slow descent followed by 3-4 decades of lower life styles to pay for it all.
I got out of the stock market at 14000, sold my 2 Florida houses in 2005, and made some nice moves based on this and the HP blog. But frankly I have no clue now at all whether their plan will work or whether we will be in utter chaos in 2 years. The market may be at 15000 in 2 years or 1000.....no one could possibly know because all this mess is historic.
Are the Eurotards killing each others in the streets on a mass scale?
Then no, we are still in Denial.
As I've said before, I think the capitulation stage will come when everyone sells off their 401ks. There's a huge population out there that own equities in these accounts and NO ONE (well, 95% of folks) sold them during the market tank in Sept/October 2008. As this market continues to decline to an as yet unknown level, the losses -- and lack of hope of recovery in the near or medium future -- will trigger a massive sell-off of 401ks.
Once this happens, the market will reach a bottom, or one soon thereafter. I say this with one caveat: that the economy starts to turn around. If the economy continues to decline, as it did in the Great Depression for years, then there will be a further decline in the market after the capitulation phase I just described. The trajectory for the financial markets to the final bottom would be a gradual and slow one.
Housing will continue to decline during this entire cycle for obvious reasons: huge number of alt-a and option arms resets forcing folks to foreclose, high unemployment and the prospect of job losses keeping folks on the sidelines, and generally a depressed economy forcing people to stop spending.
People are fearful now about the economy and the future. Some, however, are still in denial about their homes and what they are worth. But even these people are fearful of what's going on. As I said, capitulation will come...the only question is when?....
you probably have bushaphobia a serious trauma caused by the inability to live your life without the constant thought of the former president in your head and if left untreated will cause many people to just slit their groin but the treatment is relatively safe if taken daily but why give it out i would rather more people like you to continue suffering and so the sitcom is about to start frankie lymon and the teenagers getting rave reviews for helping out all those homeowners struggling with those nice houses and 2010 doesnt seem that far away
SOME CRASH!
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ALL THE PLACES AROUND HERE ARE STILL HIGH!
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REALESTATE AGENTS ARE STILL LIVING LARGE!
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STILL ASKING ONE MONTHS FEES!
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GOOD TIMES ARE HERE AGAIN, OBAMA IS BAILING EVERYONE OUT!
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PRICES WILL BE RISING AND YOU ALL WILL MISS OUT AGAIN!
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BITTER RENTERS!
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DOPES!
Changes in states of mind take time. The people who read your blog, even though many of them are anonymous idiots who can't even think of a temporary screen name, are still among the minority who are paying attention to news trends. I reckon 80% of the American population is either too stupid, too uninterested, or too messed up with alcohol/drug/personal tragedies, to know what's going on.
A big difference between a recession and a depression is length of time. A depression must drag on and on and on and on and on and on and on and on and on and and on and on and on and on and on and on and on and on and on like this sentence until people are screaming "PLEASE GOD MAKE IT STOP!!!!!"
More people in the sheeple 80% will get it as the tragedy hits home in their own little lives. They'll lose their job. They'll be three years from retirement and realise they don't have enough money to survive for more than one year. They'll get a new diagnosis of Type II diabetes because they're obese, and find out that they can't get health care, and that weeping sore that won't heal on their lower leg is starting to turn black...
One by one, the lights will be going out all over America. That's what it's going to take to move to the next stage. No mass awareness -- just individual life destruction. The right-wing corporate media will keep the lid on the awareness side because riots are bad for advertising sales.
America's getting there, but it's not to the tipping point. I'd give it two years.
The 'stages' from my experience in NoVa. Desperation in 2006 as the get-rich-quick flippers realize their 25% ain't coming in. Panic in 2007 as everyone tries to unwind and sell assets at greater losses. Capitulation in 2008 - Accept loss in home values (15 to 35%); Soon to retire people realizing they must work for another 10 years; people accept and do not expect their 401Ks to recover. Despondency in 2009 - no matter what we do, it does not matter. It's all going down hill. I think this stimulus plan can push us through to the wonderful world of depression in quick order and we might see a glimmer of hope in 2010.
Psst. I think my family is planning an INTERVENTION. They are telling me to “get off the shit”, you have to quit that shit it is killing you.
See, I went to the ER the other day thinking I was having a heart attack. All the symptoms – chest pain, shortness of breath, numb left arm, upper back & shoulder pain, family history of early heart attacks.
As a W/F of 45 I guessed this was unusual, but didn’t I see more people my age at the hospital stress test area than old F’s!
The “shit” of which they are speaking – THE NEWS (CNBC, I-Net, blogs, …). It’s part of my job. I can’t help it..
Oh crap, here they come… Gotta find some butterflies and roses site to switch to when they are lurking. Any suggestions? I know of none.
I’ve heard these interventions start with the net and newspaper, then cable, then the hit-bottom Baker Act type thing is the cell phone. Pretty soon you find yourself parking your grocery cart at the library and waiting in line for a 1 hr fix with an anon. hot-mail address... Oh God, Please No!!
I told you that before....
That's right, but at least give me credit. Remember you asked if the Obama stimulus bill would be the shock and awe needed?
It'll take at least a $10T nuke to shock the economy.
And DOPES' message may not be too far off the mark. There's a hell of a lot of truth in it.
New crackerbox plain-jane houses in Seattle still going for $400,000+.
You think they're gonna negotiate price as soon as they try to convince the masses (already getting e-mails from Centex) that NOW is REALLY the time to buy?
Even though as mentioned in news analyses, the Obama housing portion would only technically halt house price declines by about $6000. You can bet homebuilders will play hardball now and the continued decline we SHOULD see (Case-Shiller graph reversion to mean) will be delayed.
"...bushaphobia a serious trauma caused by the inability to live your life without the constant thought of the former president..."
Sure; a lot of people believe he wasn't just a frontman.
Those same people also believe it of Obama.
The REAL bosses remain, no?
Awesome.
I really appreciate the MSM pointing out EVERY 5 FVCKING MINUTES WHAT THE TERM 'UNDERWATER' MEANS!!!
Boy.
They really are on top of things. What a bunch of lazy, worthless, sleazebag clueless morons.
Bet they can't wait for HURRICANE SEASON AGAIN so they can get past this economic stuff and analyze clouds all day!!!
DOPES!!!!
Thanks Keith.
Even for the dumb posts.
Keith-
if we were beyond the Denial stage you wouldn't see articles like this:
http://www.pressdemocrat.com/article/20090215/NEWS/902150336/1036/NEWS07?Title=-Feeding-frenzy-creates-strong-sales-for-starter-homes
Only people who read the comments section of sites such as yours are beyond Denial. Virtually all the peeps with whom I've had economic discussions recently are only slightly fearful--they figure they'll get back to 'even' when the markets recover.
Me and my family will be ok. We've got our guns, food, portable water filter, vests, oil lamps, and canned cooking fuel.
If there is any rioting in this city, we are one family the cops/military won't have to worry about. We won't be the ones rioting...we prepared ahead of time, so we have no reason to go apeshit.
Keith,
no way.. because if you look at a chart of the nominal unit output of GDP per every unit of debt issued it is reaching ZERO.. we are at the end of the road my freinds. 2010 will be the year of social unrest.
Keith, The biggest problems are yet to come! The banks have not even felt the effects of job losses and reduced consumer spending yet. Why? Because banks won't really start receiving updated financial statements (i.e. 2008 data) on their commercial borrowers until March - April.
When banks start receiving the new information, showing losses (are ANY industries are doing well??), they will have to begin massive downgrades, causing a huge loss of capital for the industry. Many more banks will fail. Credit will tighten further since few business will qualify for even what credit they have, let alone more. Thus the banks will be weakened from yet another direction! This will be true of the big money center banks and the small-to-medium hometown banks where you or I might keep our accounts!
By late 2009, the most sought bank employees will be loan workout officers. Banks do not have the extra staff to handle time-consuming loan workouts in addition to their ongoing business. This will further clog up the process for those few borrowers who will actually continue to qualify for credit. Since even most bankers haven't thought of this yet (if they did they'd be REALLY scared!), I'd say they are still in the "ignorance" stage!
When the US looks like GM you'll know the bottom is in.
have a cap one cc with 9.9%interest rate. 200.00 balance. got a letter this week stating (due to the extraordiary changes in the economic invironment were reviewing our existing card accounts. a new variable rate of 17.9%or by adding 14.65%to the prime rate)and at the bottom it read if you do not accept these terms, you can decline this change and close your account.meaning the good customers that pay on time and do not abuse the cards will pay for the slugs that go b.k
Anonymous said...
have a cap one cc with 9.9%interest rate. 200.00 balance. got a letter this week stating (due to the extraordiary changes in the economic invironment were reviewing our existing card accounts. a new variable rate of 17.9%or by adding 14.65%to the prime rate)and at the bottom it read if you do not accept these terms, you can decline this change and close your account.meaning the good customers that pay on time and do not abuse the cards will pay for the slugs that go b.
All of their customers got this. They have a 10% default rate right now. I have had this card for 10 years. I got it with a teaser roll over rate and then it set at 6.5% and has been there ever since. I am never late, never have more than a thousand bucks at a time on it.
They will increase my rate to 29.5% if I am late by 2 days twice in one 12 month period.
Moral of story is pay em off, cancel and cut em up.
Frankie Lymon and the Teenagers
http://tinyurl.com/cbwm6p
Rodney King will have to come back on to say "Can't we bankers and slaves just get along?"
Has Robert J. Shiller ever updated his chart titled "A History of Home Values"
http://www.bulle-immobiliere.org
/drupal/sites/default/files
/house_his.gif
"As I've said before, I think the capitulation stage will come when everyone sells off their 401ks. "
Mass 401K withdrawals are definitely coming, but as a sign of panic, not capitulation. My guess is the feds may even eliminate the penalties and taxes on the withdrawals if it encourages people to pump money into the sagging economy. They will of course institute capital controls to make damn sure the money doesn't leave these shores.
Look for the 401K deal in the next stimulus bill in June.
i SEE APARTMENT UNITS SELLING FOR 20,000 AND I WONDER WITH BANKS PAYING SUCH HORRIBLE INTEREST RATES THAT MUST RISE, WHAT WILL HAPPEN TO THE NORMAL PRINCIPLE THAT HOUSING PRICES FALL WITH RISING RATES??????????????
Yes Keith. I can picture EXACTLY what's to come.
You know those "wilderness" boarding schools that you have seen advertised in the back of Sunset Magazine at the Dr's office?
I went to one of them in the 80's.
They are anything but "wilderness" boarding schools.
So...yes...I know what is to come. And in a fucked up way, I was made ready for it long ago.
Try googling schools like Provo, Elan, Cross Creek Manor, Casa By The Sea, Paradise Cove, Tranquility Bay, Cedu, Rocky Mountain Academy and on and on and on.
Then, do a search within results for any one of those schools for the word "abuse".
Then, learn about Synanon, EST, Lifespring etc.
Combine Isolation from the world with gulag labor 30 hours a week.
12 hours a week of Synanon's "game"
Seminar after seminar.
Sleep deprivation.
Stress positions.
NO formal education.
Purposely underfed/malnourished.
Rules about what you are allowed to even talk about.
No contact whatsoever with outside world. NONE. No news, no nothing. Only monitored calls with parents where you are told what you can say under the threat of punishment.
You don't even want to know what the punishments were.
And it has flourished and grown into a multi-billion $ industry with hundreds if not thousands of these "specialty" schools charging anywhere from $4000 - $10,000 per month.
How deep do you want me to take you down the rabbit hole Keith? Do you want to know who's involved?
I'm not shitting you. Sure. It sounds like a conspiracy theory, but I lived it. Had to sign a confidentiality agreement upon leaving. But they have since been sued out of existence (only to pop up again under a different name).
Oh...and Keith. You'd be shocked if I told you who's children were at the school with me.
The SERIOUS movers and shakers children.
The future: until we start doing it right, there will be a world of hurt.
Doing it right will bootstrap the economy. But...this means major change in our values and habits along with other minor things like alternative energy, tighter regulation and enforcement in financial sector, an much more.
We need to re-invent everything into a sustainable society. This means giving up toys and glamor and scaling down consumption, something that goes against our nature. It also means correcting our "accounting" to include the environment. We are past the carrying capacity of Earth, and even if we weren't no one knows if we can actually live in our closed ecosphere whilst keeping it in balance.
This project is more than a way to jump start the economy: it is the great challenge of humanity. See Buckminster Fuller's Opoerating Manual For Spaceship Earth, written way back in the 70's.
It's the end of the world as we know it, and I feel fine.
Banks semi-nationalized, debt moved to gov balance sheet, inflation embraced by debtors and a mini-boom goes forward. The collapse is one or two cycles away when Asia is prepared for decoupling. Finally, Schiff will be right. A warm war runs around the room as various alliances compete for resources. You have been warned. When it gets "all better" don't get complacent.
re:is it possible to interrupt the cycle?
ABSOLUTELY! There's hundreds of things that could happen in both directions. 2 examples: A tech breakthrough could change energy generation (great for the economy and world). Global climate change could accelerate and we could go beyond the tipping point (the extinction of most of the human race). The Chinese have a saying "May you live in interesting times". Right now, I think I'd prefer less interesting times.
Keith, I do not think that any stages can be skipped. What I think has happened is that people have been pulled back from stages several times back to past stages due to Government intervention. Think back to when we were entering the very beginning stages of Anxiety which people began to feel during the latter Bush days. TARP 1 helped to push people back to the Euphoria stage. I sense people were starting to realize that was not the solution to our problems around September / October and so the Anxiety stage began to creep back in. I think that the Fear stage ever so slightly started to show up around December, but then the Obama inauguration and hope pushed us back to the Anxiety stage again. Now that TARP 2 has passed people are starting to realize that once again this is not a solution, the Fear stage is now creeping back in.
What we can learn from this is that most efforts to manipulate an economy and its people are only short lived developments that cannot be maintained. I think that a stage is missing in the chart however. That stage is Reality and it comes between the stages of Anxiety and Fear. Those two stages are the last of the stages where people can be manipulated in the way that they think. You can’t change the way people think once they are in the stage of Panic for example because it is too late. Reality has always been a very tough stage to come to in common every day life, and it is no different during a crisis. People naturally do not want to face it and won’t until they have too. Once the stage of Reality is reached however, there is no going back again and all attempts at manipulation fail miserably. In fact all of the stages after Reality begin to come much more rapidly once the Reality stage is in fact reached. People enter varying degrees of different stages after that depending on where they are at in their own personal lives. While most will then enter the Fear stage, some others are in the beginning stage of Panic while some may have already reached the stage of Despondency.
Right now I would suggest that we are at the very final stages of the Anxiety stage albeit many have already passed it and have reached the beginning stages of Reality and there are many signs that support this feeling. People going out to eat that have seen their incomes decrease due to the economic slow down. People purchasing homes and automobiles at a time of uncertainty. People are still going out to the bars on Friday and Saturday nights. People have Anxiety and know they must stop some of this behavior, but that means Reality must set in and again once it is reached there is no going back. That is what makes the Reality stage such a harsh stage to bring your self too. You know the ones that have already reached the Reality stage because they are the ones staying home more and eating out less if at all. They stopped buying things, bring their lunches to work and talk about where we are heading and not where we are at because they already know the answer to that question.
I think the most recent Obama speeches and further attempt’s to manipulate markets is forcing the Reality stage to set in quickly now, and eventually it will be reached by the overall society. Once that happens, the next stage is Fear and then all hell begins to break loose, because after that the Desperation stage comes and we all know how volatile and uncontrollable that stage can be. I sense that the Reality stage will be reached by early this summer the absolute latest, and that the Fear stage will be reached shortly there after. I don’t think Government intervention and manipulation will pull us back this time. All of these silly proposals out of Washington and the many failed attempts to manipulate the economy will see to that very quickly I am afraid to say…
It's not the fear stage that worries me. It's the "I'm angry, hungry, my wife and kids are hungry, I have no money and I have nothing to lose by pointing this gun at you" stage that really worries me!
"There's a huge population out there that own equities in these accounts and NO ONE (well, 95% of folks) sold them during the market tank in Sept/October 2008."
(sigh) Google 401(k) equity outflows to find out how wrong you are.
This blog would be worth the time to read if it had more verifiable data, and less opinions.
What really cracks me up are the "stocking up" babies that don't understand the Great Depression was 3 times worse. Anyway, where were the rioting masses in 1929-1933? I guess "this time it will be different", right?
MSM tools...
"Anonymous said...
It's not the fear stage that worries me. It's the "I'm angry, hungry, my wife and kids are hungry, I have no money and I have nothing to lose by pointing this gun at you" stage that really worries me!"
Prescient. Priceless.
Coming to a formerly safe nieghborHOOD near you soon.
Thank you Bo Jangles, Bushco and Cheneyburton.
Punish the Guilty.
SORRY FOLKS ALL OF YOUR FEAR AIN'T GONNA HAPPEN. YOU'LL LOOK BACK AT THIS RHETORIC BULL JUST LIKE Y2K, END OF THE WORLD CRAP. GO AHEAD PACK YOUR BOMBSHELTERS WITH FOOD, GET YOUR GUNS AND KEEP YOUR HEADS UP YOUR ARSES. A FEW YEARS FROM NOW YOU'LL ALL STILL BE WAITING FOR 'THE END'. MEANWHILE PEOPLE IN SANTA ROSA CA. ARE SCOOPING UP HOMES AT AN INCREDIBLE INEXPENSIVE PRICE AND YOU'LL ALL STILL BE STILL RENTING UNTIL YOU CAN NO LONGER AFFORD IT. GOOD LUCK WITH YOUR DOOM.
HA HA
Ladies & gentlemen, I present you the desperate troll who's probably 40% underwater in the market + home leveraged to his eyeballs and losing value by the day. He now wants to tell you what to do next or forecast the future. We've seen the type here before, many times.
Thanks for your "insightful" advice buddy but I'll stick to my strategy, since I, like many here, saw this mess coming way way way in advance, prepared accordingly for it, and my portfolio's been returning 7% for the last 3 years. Hell, I'm even beating Warren Buffett!
Oh yeah, sure, the US will survive off GOOG, AAPL, and INTC. We all going to be buying $4k laptops and doing searches all day just to click on those worthless links next to searches. Hmmm...I probably clicked on those links once in the last 5 years. How many times have you?
Here's my forecast, wizard: huge phony rally next week to call more sheep to be fleeced by the Madoffs running the Ponzi Wall Street, and then a huge nosedive again to DOW 7,200.
And to think that commercial real estate has yet to blow in dramatic fashion. Oh but what about the BRICs, the Madoffs ask. Here are the headlines today: "Brazilian Industry lays off 100,000 workers in Jan, while Russia lays off 300,000." Oh yeah, the BRICs are swimming in money!
Jump in it fools, because the Madoffs and Stanfords are waiting for you with their fingers on the keyboard. C'mon sheep sheep, come buy rotten stocks rigged with made up valuations...Buy Buy Buy! bwahahaha
Oh crap, here they come… Gotta find some butterflies and roses site to switch to when they are lurking. Any suggestions? I know of none.
I do. Get as many BO desktop wallpapers as you can, and start playing them at random. Get that "fancy" one, all colorful, with the word "hope" right below. Then on the desk you place this BO chia plant:
http://tinyurl.com/cg97vd
Sadly, Keith we are only in the "bezzle" stage. We first have to find all the crooks so we really know how bad things are.
http://www.doctorhousingbubble.com/
The current phase we are in is what John K. Galbraith calls the “bezzle” stage. That is, we are now in the process of discovering the Madoffs and Stanfords and what they have been doing for years if we only had competent enforcers and politicians who would have had the guts to take a stance. Only now after things have gotten so rotten, do we take action. Yet the deed is done. I liken this to many California homeowners thinking their home was “worth” $600,000 only to realize that when they go to sell, they can only get $300,000. They lived a life of phony money and are now coming to terms with a brutal contracting economy.
I thought we were still in U For eee a. maybe it was the drugs. couldn't buy a parking spot at the
mall on the weekend. wtf.....
"...Homeowners who do convince their lender to forgive part of their principal face another hurdle in a falling real estate market...
“It might get them from under water to above water for now...but how much of a percentage decline from here would it be to put them back into the current situation?“
;^D
WHEN is it going to dawn on people that the ONLY solution is to walk/rent/save for when prices bottom?
They've gone WAY TOO FAR this time.
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