We could stay in Despondency and Depression for a long, long time, based on the magnitude of what they have done. But I think all of you would agree by now that we're past Fear, Desperation and Panic.
The past week, starting with Geithner's disastrous amateur hour, feels like the start of Capitulation. Throw-in-the-towel, I'll never invest again, I trust nobody or nothing, houses are completely worthless, capitalism is dead, the Dow is going to 1,000 and will never recover Capitulation.
If that's the case, then Despondency (and worldwide riots, famine and awfulness) is around the corner.
Whatever it is, it's been amazing to follow this chart. It's told us everything. EVERYTHING. After this is all said and done, and you go back and look at this chart, it will all become clear.
It hath been foretold.
Posts
118 comments:
Keith, what are you smoking!!!???? Past Panic??? please.. you won't have to ask that question when we are in the Panic mode.. It is coming to a theatre near you..
Nope, still in Denial....
Looking at house prices here in the Mid Hudson Valley,NY
We are still in Denial..
Keith
Many are still in the denial phase
My neighbors still believe they can sell their ugly vinyl sided POS home that they haven't cleaned the trash out of the yard and fixed the broken windows.I deal with the people 5 days a week and they are still clueless.
Europe is still in Denial.
OK I’ll admit,
Europe is and has always been in a permanent state of Denial.
“...we're past Fear, Desperation and Panic.”
Not in my little state. My state is still in denial.
Examples? One of my secretaries has convinced her husband to build her a second McMasion on a big lot of land. Her current McMansion with a carriage house larger than my home is insufficient. They are hoping to break ground this Spring. My other secretary is going away to Florida for school spring break with her husband and kids. The trouble is, her husband has been out of work since October and has no job prospects. I guess I know where his extended unemployment benefits are going.
USA! USA! USA!
The majority of Americans are still firmly in denial. It really is that simple. We think everyone pays attention like we do. Most will pretend all is well until the very end. Never underestimate the magnitude of American's ignorance and empty arrogance.
I don't get it. How could Americans lose $12 trillion in 'wealth', have their government go on the hook for $8 trillion, have millions and millions lose their jobs, have home prices fall 25% to 50% nationwide, and be STILL in denial?
Seriously?
Come on!
If that's the case, and despondency and depression are still a while off, then oh, man, we are f*cked like a generation has never been f*cked. As in, get guns, get shelters, and get ready for wars kind of f*cked.
I disagree. I think denial has passed. The cab drivers and shoe shine guys and hair dressers and EVERYONE I meet knows things are bad and getting worse. It's all anyone talks about. I don't hear ANY denial. I hear fear. I hear depression.
And I see the stock market heading to despondency. When you lose 10 years of gains (not even taking into account inflation), you're looking at a sick, sick sell-off. One that may even get worse.
I feel we're in the final days of the crash. The final, cataclysmic, historic days. And then the Summer of Rage.
And then recovery.
Still going down. Another 30-40% shave of the stock market.
Still in denial. I was out in the Midwest in an area heavily impacted by foreclosures over the weekend. The restaurants were all still packed. We haven't hit panic or bottom until people have fully reigned in their discretionary spending.
There are plenty of civilisations whose path looked like only part of that lovely wiggly graph.
If this was just a normal business cycle you could be confident of what was coming next.
Instead this is a deeper issue of energetic viability and financial solvency. I say our collective asses hit the floor until we come up with a new form of useful energy. If not it is back to feudalism and scuffles, failed states and command economies, maybe with a genetic engineering twist to spice things up.
Denial that we are still in denial. Then denial that we are in panic.
The market can cal longer than you can hold out hope.
Here's where we are going:
http://snipurl.com/c2oab
Keefer said:
‘have home prices fall 25% to 50% nationwide, and be STILL in denial?’
Please show me real houses that are for sale for 25% to 50% below asking prices 2 years ago.
Aside from Miami, Vegas and SoCal which even there I’m not sure “real prices have already dropped that much”
You get these global averages by Case-Shiller etc.
But in reality House prices in most areas are still apporx. %200 – 300% higher then they where in 2001 for no reason at all.
Al-Queeferonio said;
‘If that's the case, and despondency and depression are still a while off, then oh, man, we are f*cked like a generation has never been f*cked. As in, get guns, get shelters, and get ready for wars kind of f*cked.
You’re assuming the whole world thinks and acts like Eurotards.
Tuff economic times do not equal caos and anarchy.
Its unique to the land of the savage Eurotards.
For civilized cowboys it may actually bring out the best in people.
You haven't seen the coming slaughter yet. 20 year ponzi, dow at 1000. You are still in denial if you can't see that. Just restart the global ponzi scheme.
Keith,
I don't know where you're friends and neighbors live(somewhere in Europe, I suppose) but where I live and work, most people are still somewhere between Denial and Fear.
Sam in MD
buy now or be priced out forever!!!!!!Look at usb, stock has tanked but still has a great business model.
Is gm going under?How about citi or BAC?
Biggest buying opportunity in a century.
Is the stock market one big ponzi scheme?Do you really own the company if you own shares.Seems like the common is a joke in most cases.
WE ARE IN FEAR,,
You guys are in Denial
Bend over and meet allah?
Most people around here have the "deer in the headlights" look about them. They know something's up but too dumb to know what. Starbucks was packed....nothing to see here.
And I forgot to add that in my neighborhood, housing prices are down only 10-15%, if that, from the peak (after 250% gain from 2000-2006). Be careful of using averages or even Schiller-Case. There is great disparity between the regions and neighborhoods.
Totally entrenched (in concrete) in denial in San DiFreakingEgo.
http://www.palatialdesign.com/
This place is for rent for a mere $30K a month.
This part-time living abroad blogger not withstanding, we are
NOWHERE NEAR BEING OVER THE PANIC STAGE.
BoJangles Obama has yet begun to Fight...
True Panic, like prosperity is 'just around the corner'...
Riots, Civil Unrest and Death to come to a formerly pleasant neighborhood near you.
Do Not isten to anyone but yourself.
Be Prepared.
America is Fucked, and so will you be if you do not excersize comon sense.
THUS endeth the lesson for today.
This is still the denial stage with some tending toward fear. We are still 6 months from the panic at least.
You have to remember that you have been on top of this crash for a while, therefore you are always anticipating the next phase prematurly.
People with houses to sell, and only people with houses to sell, are in denial.
Keith, you always jump the gun on this chart. Final days of the crash?? The crash is just getting started as there is much, much more unraveling and credit destruction to be had.
Actually, we are just at the 'Deer in the Headlights' phase of the great unwinding. Wait until local gov'ts go bankrupt, more layoffs, failed stimulus packages, bank holidays, and more resetting Alt-A,Option ARM mortgages kick in to high gear later this year. Only then will Panic set in.
Change is definitely on the way, "Change You Can Believe In",(TM).
When the government starts giving people the boot, instead of a check, we will remain in denial.
Keith,
Panic is when people are destitute and they wake up one day and the value of their savings in us Dollars loses 40% of its purchasing power. social unrest will be part of the panic mode.. we are not their yet. probably late 2009 early 2010.
Agree with many here. We are still in the denial stage, but we'll skip fear and desperation and fall directly into panic!
We are in a Depression already, but we're in denial. The moment the government loses control of this beast, we'll hit the panic stage. It's going to be short and nasty--maybe three or four days.. Then it's hell from there!!
Hey! Did you see Shaq's attempt at that free-throw record?
Dow to gold ratio dropped through 8 these past few days.
When it gets to 5 or 3, we'll be at a gold top and a stock market bottom.
Probably in the next 2 years.
Trouble is, will it be
Dow = 7500, Gold = 1500 (which could happen in a matter of weeks from now), or
Dow = 5000, Gold = 1000, or
Dow = 6000, Gold = 2000, or
Dow = 4500, Gold = 1500, or
????
>How could Americans lose $12 trillion in 'wealth', have their government go on the hook for $8 trillion, have millions and millions lose their jobs, have home prices fall 25% to 50% nationwide, and be STILL in denial?
Seriously?
Come on!
Yes, I'm stunned to see more than one claim of denial. I thought we were nicely settling into our new quarters in a fear, panic and desponcency 'slurry' (if you will). That outburst by Keith though was just gold.
Kieth, Juan gets it...
"I don't get it. How could Americans lose $12 trillion in 'wealth', have their government go on the hook for $8 trillion, have millions and millions lose their jobs, have home prices fall 25% to 50% nationwide, and be STILL in denial?"
Keith you're right about denial being over, but we're clearly watching "Desperation". All of these bailouts are desperate moves to try to save the debtor economy.
Panic is when we see credit card riots.
Despondency is when BHO tells us to start saving.
Keith, again you're ahead of the curve.
There are 2 curves.
Sashers are past panic...we managed that phase with HousingPANIC.
All others, still in denial.
And, as someone said...If you're not terrified, you're not paying attention.
past denial somewhere around fear
Got rate-jacked by Chase Visa today to 18.24% APR. Never late, balance almost always paid in full each month, no adverse activity on credit report.
The 5% rebate on gasoline is nice but these pigmen no longer deserve a 2% cut on every cc purchase. Going all cash and Jamie Dimon can choke on a fat d*ck.
We're not even to panic yet. The problems in the financial markets haven't really spilled over in a significant way into the real economy yet. The unemployment rate is still relatively low.
For most people, it's business as normal. There's no blood in the streets yet. No rioting yet, at least in the US.
I think the real economy is still in the fear stage and the financial economy may be approaching the desperation stage.
Just wait until guaranteed benefit pension funds implode. If the stock remain low for much longer, you're going to see some failures.
Let it go folks, now Insana will do what other losers who can't make it in the real world do: He'll either become a troll on corrupt MSM, a politician, a push-paper government parasite, a Realtor, or an snob-loser university professor:
NYT -- Former CNBC news anchor Ron Insana appears to be done with his foray into the hedge fund business.
Mr. Insana has decided to leave his post at SAC Capital just six months after he was hired as a managing director, a person briefed on the matter told DealBook. Mr. Insana’s last day at the hedge fund giant, run by billionaire Steven A. Cohen, will be Feb. 27.
After leaving his job as a full time commentator on CNBC in 2006, Mr. Insana launched his own fund-of-hedge-funds firm, which he called Insana Capital Partners.
While he collected over $100 million for a new fund, called the Legends Fund, the firm failed to lure many investors and had lost about 5 percent when he decided to sell the fund last August and shutter the remaining firm.
David Weidner, a columnist at MarketWatch, wrote that Mr. Insana’s foray into the hedge fund world was a sign that “it’s probably time for everyone else to get out.”
.
STILL IN DENIAL. TOO MANY FOOLS CALLING BOTTOM OR JUST CLUELESS. WHAT'S ON HOUSEWIVES OF ORANGE COUNTY?
.
Anybody who thinks we're still in "denial" is in denial themselves, and will miss the greatest financial opportunity of their lifetimes in the coming months and years.
We are clearly sailing through "panic" and on our way to "capitulation," if not already there. Home prices are falling at a record rate, which means we're not through the woods yet, but bottom is rapidly approaching. I'd say we'll be squarely in "capitulation" by this fall, and late 2010 will be the best opportunity to purchase real estate in any of our lifetimes. Stay liquid and be ready to jump into the market in 12-24 months!
Desperation
- Live from NYC & the financial world
Read my post for an eplanation Keith- `my ergonomic keyboard here crapped out the other day please stay with me as I improvise`
Most people are in a state of total denial and I live with one such person. The mindset of this person is 'oh well, nothing I can do about it' and the conversation is immediately shut-down.
When I bring up California, the riots in the eurozone and so forth, I am told that it is because they are socialist economies and it will never get that bad over here in FL or even the wider US.
It ping-pongs back and forth between those two things. This is not panic, nor was he ever in a state of panic. It's ignorance. ust ignorance.
Additional;y- The only time I see this person 'panic' is when it is too late but usually they become aggressive and belligerent.
This might be what we are in for on a huge scale over here in the US should things get really bad. Not the kind of euro-rioting with people gathering together, but violence after something has happened. That really concerns me. I hope I ust have a bad impression from the wrong people.
We're still in denial where I live. Many co-workers taking lavish vacations even after we all took 10% pay cuts.
some time back I wrote in here saying you would know the bottom was in when Trump went bankrupt.. today 12 Trump/Trump affiliates filed for BK, yet ...yet...............................
As it gets worse, the curve keeps moving out to the right.
When it was a recession, we had passed denial. But now as the curve shifts toward the right toward anarchy, we may be back in denial.
I do not see the link between riots and despondency. If there are riots, its panic. Therefore on this new curve, Despondency is when we have martial law and everyone is afraid to leave the house.
Keith asks this question every 15 minutes - and he expects a different answer every time!
D-E-N-I-A-L Keith, we're still in denial here in the USS of A. Dr. Obama's gonna cure every pain, rid us of cares, and he'll never break a sweat doin' it.
Look! another unicorn just flew by!
Down here in Phoenix the president this night is staying in a resort hotel that is being forclosed upon.....??????????????????
Keith, I agree the low level workers are despondent. Truck drivers that drop things off at our company get it. Same with the lady who cuts my hair. The denial is in the people up the ladder a little, still living on borrowed time. The suburban livers who still have their $50,000-90,000 jobs and are not currently selling their houses are as arrogant as ever.
The % in denial is dropping every day, but as of now I would say 75% of people I talk to still are pretending all will be magically okay.
You know we're in denial when every sheep out there thinks that Obamy will save the world with that Porkytastic bill.
Some also think that the US economy is all about Apple and Google. Just watch the Leo Laport shows and you'll see all those geeks in freaking denial, buying, having babies, and traveling like crazy. Oh yeah, they must be all rich in bankrupt California! I just came from Walgreens and the place was packed, long lines, with zombies buying all kinds of useless crap.
Buffett announced a while back that he's buying, meanwhile he's dumping like crazy J&J, P&G, Bancorp, etc, just going after high dividend usury deals. Sure buddy, we believe you. Perhaps you need another World War to become "oracle" again, eh?
Folks, it'll be painful like a mofo when we reach Panic. Not this "oh-well" behavior we're watching.
and in phoenix this evening, the mayor gave the president a pair of shoes. (size22 of shak oneil) one might think presidents and shoes might be???????????????????????????????????????????overused?/
Denial here in Baltimore and Maryland. Restaurants are packed on weekends. Insane house prices in the most ghetto of neighborhoods in the city. Give it a few more months though...
I disagree. I think denial has passed. The cab drivers and shoe shine guys and hair dressers and EVERYONE I meet knows things are bad and getting worse. It's all anyone talks about. I don't hear ANY denial. I hear fear. I hear depression.
Yeah, but these sheeple are convinced, like many of you, that their Messiah is going to save the day, together with Pelosi & Co.
All I hear out there is: Buy Buy Buy or hysterical screams every time the Messiah opens his mouth (i.e., your friend Julio).
If that isn't Denial, I don't know what it is.
still trying to eke a meal outta this local block.... noted that an overgrown lawn may be a wheat/chaff crop..............
Hey Keith, let me give you a big example:
I went to see some properties in FL with a Realtor...
...HUGE DENIAL!
everything's still expensive, same NAR sales pitch (now it's time to buy!). Man, they're offering POS shacks with no A/C for $200k, and have the nerve to call it, "exquisite cottage".
Hey Shane in Australia, we're so sorry for Bukko.
Please note that not all Americans are like him.
Parts of SoCal are still in denial. We're nowhere near that bottom of the curve. Maybe for the stock market but not for housing.
I'd say we're still somewhere between fear and despondency. No sane person can deny the problem any more, that's for sure. However, it's not panic just yet. Today's selloff was, I believe, just rational response to the gubmint's continued ineptitude, and probably people realizing that 'stimulus' is just going to make everything worse.
Fair Disclosure: I don't own a TV, so I don't get caught up in all that FUD that O'Reilly and CNBC et al subsist on. If I watched that crap, I'd probably be panicked too.
Keith,
When you suggested we've already passed the Panic stage, I just sorta stared at the screen for a while, trying to figure out what you could be thinking.
The best thing I came up with was "well, he's talking about Panic from an investor's standpoint. Not the masses."
Right? But then, even that doesn't fit with reality.
I'll cut you a break (even though I'm still wondering WTF!?!?!?! are you thinking?!?!?), and just simply remind you that it doesn't always work in that neat-little-graph-depicted-serial order. It's perfectly normal for (for example) Panic (any of the stages) to come earlier, later, or to sorta jump around the graph for a while.
Ok, that's my lesson for today.
Now stop smoking that stuff.
And send a nice Pale Ale this direction -- we need it. Hops are Good.
I still think we are in the bottom of the 2nd inning in a 9 inning game. This deflationary depression is about to just get started. We are only about 21% into this crash. It is going to get worse, a lot worse. I think a lot of you guys are jumping the gun. Just be patient, especially for those like me who are waiting to buy a house for a bargain.
Blogger keith said...
I don't get it. How could Americans lose $12 trillion in 'wealth', have their government go on the hook for $8 trillion, have millions and millions lose their jobs, have home prices fall 25% to 50% nationwide, and be STILL in denial?
Seriously?
Come on!
If that's the case, and despondency and depression are still a while off, then oh, man, we are f*cked like a generation has never been f*cked. As in, get guns, get shelters, and get ready for wars kind of f*cked.
I disagree. I think denial has passed. The cab drivers and shoe shine guys and hair dressers and EVERYONE I meet knows things are bad and getting worse. It's all anyone talks about. I don't hear ANY denial. I hear fear. I hear depression.
And I see the stock market heading to despondency. When you lose 10 years of gains (not even taking into account inflation), you're looking at a sick, sick sell-off. One that may even get worse.
I feel we're in the final days of the crash. The final, cataclysmic, historic days. And then the Summer of Rage.
And then recovery.
February 17, 2009 10:03 PM
Keith, you point out some very interesting facts. However, our fellow countrymen have been indoctrinated to think that "oh, it will all be ok because there is no way the economy can collapse", "we are the U.S.A. the greatest nation in the world, we are too big to fail", "the markets will come back", etc... A lot of people still believe that the stock market will go back to 14,000 and beyond! People are in a mild state of denial. Our fellow Americans are too indoctrinated to see the reality of what is happening Keith.
If market tops coincide with Thrill and Euphoria... and Market bottoms coincide with Despondency and Depression. Then how does one know when Depression has occurred when half a country is on Prozac at the Euphoria time???
We're definitely in Denial. Here's a video of Japanese finance minister drunk at G-7:
www.youtube.com/watch?v=lWLeWqPOFpU
He's forced to resign today.
I think we're definitely well into the anxiety stage now.
In my neck of the woods, people are somewhere between denial and fear.
My parents have been trying to sell my (rip) grandmother's apartment the past six months. it's in a nice little seniors only complex, bought in 1998 for 78K. They've been asking 115K for it, a few lookers, no takers. Other apartments in the complex have been sitting equally vacant with price tags of 120-165K for longer.
I keep telling them to put it on craigslist and in the paper for 98K, and pray that they can find someone to take it for 90K this summer, so they can just get it off their hands. They're losing like $4K a year in condo association fees right now.
They seem to be warming to the idea....
They also asked me if I thought they should move some of their cash into gold this week. I had no idea what to tell them. It looks like that is what everyone is doing, and it just spells b-u-b-b-l-e to me.
My gut is telling me that it is going to dip this summer - like down to $700 - before it goes back up next feb from inflation. But what does my gut know? Maybe it's really just telling me it wants some golden french fries or something.
You're seeing things so black and white when, in reality, everything is a shade of grey. Some people are still in denial and others are despondent but most are a mix of sorts. We still have a long ways to go before a majority hits fear. The bottom is still a long way down.
.
No way are we near bottom!
.
Hey Shane in Australia, we're so sorry for Bukko.
Please note that not all Americans are like him.
February 18, 2009 12:59 AM
++++++++++++++
Ditto my Aussi brother.
Signed
The Anti-Bukko
Captain Conservative
"...If that's the case, and despondency and depression are still a while off, then oh, man, we are f*cked like a generation has never been f*cked..."
Here in San Diego it's not exactly denial, but a rather studied avoidance of thinking about it.
Something wrong with those CAR numbers you posted. We're only down 25% in our neighborhood so far; $600k down to about $450. These late 50's tracts rent for maybe $2000. Do the math.
Commercial shoe hasn't even dropped yet; half-a-Trillion in housing resets coming in 2010.
Loved the contempt coming out in that Celente vid. What else could we possibly have for the people who shouted us down, and continue to do so?
Best of luck everybody; we're all rugged individuals now(even if we don't know it yet.)
Not even close to the finish yet. Total blank stare whenever the subject comes up, few know what's going on! By the way, remember when we were talking about Moral Hazard last summer? Hard to believe where it's gone since then.
You are so right about so many things, yet also quite young. We are not even at 'Panic' yet. Getting close, but not there.
'Panic'? Where? Not in PA. Not on the news, not in the papers. Life goes on as usual, although Denial of the impending reality check is quite evident. That's it ! Denial. That's where we are.
You ask, "How could Americans lose $12 trillion in wealth, have their government go on the hook. . . .etc etc'
I answer, 'Lose wealth? Oh, yes, perhaps. . .'
The truth is, Keith: just like an increase in wealth on the way up isn't 'real'; a loss of wealth on the way down isn't 'real' --until it hits home hard. Lose your job? House? Can't do college? Car reposessed?
Most of us aren't there, yet. We will be, but aren't yet. Unemployment is only 6-15%, depending on how you figure. I still have my job, so I figure it's 6%. Not too bad. When I lose my job, I'll figure it's much higher.
Keith, when it's really 'Panic' we'll all know it. There will be no doubt.
Trust me, I know. I'm so old, when I was born, rainbows was in black and white.
Anonymous k.w. - Southern Ca. said...
Here's where we are going:
http://snipurl.com/c2oab
Interesting video, thanks.
High End homes are reaching panic for the couples who recently brought and have to sell, but for the couples who brought long ago and are testing the market these couples are still in denial.
The banks are holding back on releasing high end foreclosed homes, but when the bulk of these option Arm, Alt-A, and NINJA loans recast will the banks be able to hold back the the massive amount of high end foreclosure.
If these banks can not hold back the massive amount of high end foreclosures then the high end home owners who are in denial will understand fear if they are suddenly force to sell.
Anybody who thinks we're still in "denial" is in denial themselves, and will miss the greatest financial opportunity of their lifetimes in the coming months and years.
We are clearly sailing through "panic" and on our way to "capitulation," if not already there. Home prices are falling at a record rate, which means we're not through the woods yet, but bottom is rapidly approaching. I'd say we'll be squarely in "capitulation" by this fall, and late 2010 will be the best opportunity to purchase real estate in any of our lifetimes. Stay liquid and be ready to jump into the market in 12-24 months!
-----
It would be lovely if we could have just another 12 months of bad times, followed by many years of sunshine and lollipops.
Do you REALLY believe thats how it will pan out?
Panic 2! The fun hasn't even begun! Get your passports ready folks!
We have trillions upon trillions of loses to go!
This bubble started in the 1970s! That is how far were heading back in time! The DOW must of been like 1000 points back then. So we got 6000 points to go!
HopingFerDahBest said...
One of my secretaries has convinced her husband to build her a second McMasion on a big lot of land......My other secretary is going away to Florida for school spring break with her husband and kids......her husband has been out of work since October and has no job prospects.
So is your bookkeeper living large like your secretaries?
What comes after "notice of default"
http://mortgage.freedomblogging.com
/2009/02/05/one-million-dollar
/6234/
One million-dollar O.C. home faced foreclosure for every two sold
In its latest report on 2008 million-dollar home sales, DataQuick found that 1,179 Orange County homes that had previously sold for seven figures received a notice of default in 2008, entering the first stage of the foreclosure process.
Keith said....
I feel we're in the final days of the crash. The final, cataclysmic, historic days. And then the Summer of Rage.And then recovery.
--------------------------
You will know the bottom because there won't be anyone posting here.
Blogging will not be on the catastrophic list of things to do or die trying.
You will know recovery because everyone will come back with their story of "What I did during my depression vacation".
I feel we're in the final days of the crash. The final, cataclysmic, historic days. And then the Summer of Rage.
Keith,
You are correct. On or around April 23rd for the final collapse of markets. Prepare.
I think many people have gotten the memo, but are clueless about what to do about it. They're still listening to their dumbass financial advisors and the Suze "dollar cost average and buy my lame book" Ormans of the world, who are giving them all the wrong advice and causing them to lose even more money.
In the old economy, you could be brain dead and still make a decent return on your money. Those days are over, finished, gone. That is the part most people fail to understand.
Uh, Keith...slow down buddy. I think most folks in the U.S. are just now beginning to fear. Believe me, when panic sets in, we will all KNOW it. (Even you.)
P Sainath - Agricultural Crisis & Globalism - Lecture at University of Texas in Austin
The award-winning development reporter and photojournalist, Palagummi Sainath, is India's foremost chronicler of the impact of Globalization on the country's rural populations.
http://tinyurl.com/cgpsn4
For those who have been following the markets for the last 9 years would have to agree with we're in capitulation. If you don't believe we're in capitulation, why aren't you (idiot in denial) still investing in stocks?? Waiting for stocks to be cheap?? Look at Warren Buffett's Berkshire losses for Q4 08. He was gobbling up shares cause he thought they were "cheap." I'd say we're in the beggining stages of capitulation... when one gives up (surrenders) investing in the stock market... which I knew 4 years ago.
If you're dumb enough to keep pouring (losing) money into your 401k (investments in the stock market), the world's ponzi-schemers (stock brokers, investment bankers, and yes, tax payers) are the ones going to end up with your hard-earned money.
It doesn't matter what you "think" of what others "think..." it's what you think what state we're in. If you don't "think" we're in captitulation, you're one of the sheeple. The takeover of Bear Sterns by JP Morgan followed by the failure of Lehman Brothers, and then the bailout of AIG to protect JP Morgan, and then followed-up with nationalizing Fannie and Freddie, and then, forcing Bank of America, Citigroup, Wells Fargo (and Wachovia), and the rest of the banking ilks, was definitely a sign of "panic" in a financial sense...
But for those with no financial understanding, then, we must still be in a state of "denial..."
Dudes, we're way past denial and panic.
Only just now are we seeing Frontline explaining how bad things are. Only now is 60 minutes explaining things. Only now are we learning about Madoff and Madoff lights.
Denial is ending for the populace.
Fear is now.
Panic when unemployment reaches 10% or so and CA and a few other states stop paying bills, tax refunds, etc.
Desperation when unemployment reaches 13% or so and the tax revenues aren't there and municipalities and states go bankrupt, GM bankrupt, GE bankrupt (or close to it), Boeing layoffs, Pfizer and Merck and JandJ major layoffs, etc.
Keith,
In general, I think you are making a good call as usual. As a long time HPer, I'm a bit disappointed at the S&A commments but not surprised. HP was ahead of its time and was full of people with real insight and analysis. The groupthink that comes out of the S&A crowd is just a sign of how mainstream the economic crisis has become and you really need to weed through the lemmings to see where things are headed.
While there are pockets of denial, that's far from where the stock market is or the average consumer is. There's not a person I know that doesn't know how much their 401k has lost in the last 6 months. The stock market is between capitulation and despondency. The only question is whether we have another leg down from today's levels. We are definitely not far from the bottom.
Consumers on the other hand seem to be closer to panic. We are just starting to learn what it means to live with what you need instead of what you want.
We likely have another 12 months of negative GDP maybe 18 months. Housing will begin to reach bottom by the fall. That said, stocks should start to recover late this year, maybe sooner.
Keith,
Tampa suburbs report - capitulation to despondency.
One neighbor - possible capitulation, trying to sell a house and "investment" condo at 2005-era prices, pulled her listings. Though, I don't know if she's accepted reality or trying to game the "days on market" system (Realtwhores here see the truth in the MLS, but public printouts don't).
Another neighbor - bankruptcy, capitulation. Though he's trying to keep his new $4000 TV for 25 cents on the dollar in addition to the granite/hardwood house according to the court records so he hasn't reached despondency ... yet.
1/4 of the homes in my neighborhood are still in trouble, $100k+ under water, 30-40% below peak, but stable for now here in the newer eastern suburbs.
A friend in the older Northwest suburbs, already $100k under water in mortgage debt, 40% below peak, saw his home value tagged on Zillow drop another $10k in the last week. I'll label them as among the few "denial" holdouts because they're trying to refi.
You gotta love the high and mighty anonymous posters in here calling everyone else sheepl. Panic hasn't set in yet. The oil crisis last year wasn't panic either but it was a damn sight closer.
We will know panic when we see it, there won't be any doubt about it. Like others have said, it simply hasn't hit home yet for a lot of people.
desperation...IMHO.
when one gives up (surrenders) investing in the stock market... which I knew 4 years ago.
Oh really, so why were there a bunch of rallies lately and the S&P was up 20% from Nov lows? Healthcare and Tech sectors have a P/E of 20. Is that what you call cheap? Is that what you call capitulation, when the entire financial community is yelling: Buy Buy Buy! Just watch the rally again today.
Capitulation is when the trolls kill themselves, we see blood in the streets. All we see now are fools yelling that stocks are cheap and now we've hit bottom. That's not capitulation; that's DENIAL in my book. Warren Buffett is a classic example, as he keeps announcing that he's buying all the time and the fools follow. That's it, decades of excesses all fixed in six months, poof!
Mish is right. This generation never experienced deflation or bear markets before, so they wouldn't know it if hit them in the a$$. They're conditioned to be a permabull. I love the AAPL, GOOG, RIMM, and INTL permabulls..no matter how deep the recession (depression), they think that everyone will still continue to buy $4k laptops or $300 / month crackberry bills.
SURPRISE! SURPRISE!!! ONE OF THOSE PIZZA DELIVERY PLACES HAD A LARGE ONE TOPPING PIZZA ON SALE FOR 5 BUCKS THIS WEEK???? A SOMEWHAT FAIR AND GOOD PRICE!!!!!!!!!!!????????
I SEE APARTMENT UNITS SELLING FOR 20 GRAND 0R LESS AND SITTING FOR MONTHS WITHOUT SELLING AND I WONDER ABOUT THE 200 BUCK A MONTH COMMON FEES............
You keep rolling out this chart and prematurely assessing the position where we are. Just listen to the other posters would you?
We are barely hitting the Panic stage, nowhere near capitulation/despondency.
Keith
I understand how you can feel that we're in despearation/depression mode. In 2005 I spent a year overseas, mostly in Asia and Europe. While reading the news from the International Tribune (published by the same company that does the NYTimes, I think...) watching local newscasts and doing some web reading, I thought the USA was surely burning up with riots and protests over the many wrongs being done. You know, Bush's war on terror and the crackdown on civil liberties etc. The war in Iraq, the wildly crazy growth economy, that looked to me more like a malignant cancer than anything else.
But then I land in NYC and nothing. The streets are normal. People are eating out and life is going on as usual. There is this bubble of denial that fits over our country in many cases, and you just don't see that overseas. So, while it may look like we've gone over the edge of the cliff here, we're still chatting and wondering who the guys with the sirens are. (thinking Thelma and Louise)
Hamsterhouse
Tyrone said...
I feel we're in the final days of the crash. The final, cataclysmic, historic days. And then the Summer of Rage.
Keith,
You are correct. On or around April 23rd for the final collapse of markets. Prepare.
February 18, 2009 6:33 AM
Tyrone---
Please explain.
As always Keith, it's location, location, location. Where there was no housing bubble, there is no place on the chart. If anywhere, here it's between clueless and denial, much closer to clueless. Homes do stay on the market a whole LOT longer than ever before, but since most people here don't have to sell, they will ride it out.
That happens a lot in older non-bubble rural communities. Owned outright, no mortgage, no rent, no water bill, no trash pickup fees, no sewer fees, no electric bill, no HOA fees, just property taxes and insurance. Owners can afford to hold out for their asking price.
When they HAVE to sell, and can't, then we will go past clueless/denial real quick!
And even if someone has moved away, say for a new job, and times get hard, and they lose that new job, they can still move back into their vacant, paid-for, former home.
It would be great if we could contain all this financial gloom, doom, and disaster to those Ba$tard$ who caused it, and leave the rest of us alone.
Hey Keith, I just heard about the FIRST protest in anger in this country today!!
100 (I know a very small number) people (union workers) gathered on the lawn of the capital to protest in Olympia, Washington yesterday.
Here is the sad truth to what they were protesting (how many do you think voted for Team Obama and his entitlement philosophy?)and the denial that people are in. Either that or the entitlement generation just catapulted throughout all ages in this country. I hope I am wrong about that one!!
PLEEEEEEASE...
1. Stop Healthcare Cuts
2. Stop Education Cuts
3. Prevent Tutition Hikes
4. Fair Pay for Sate Workers
5. Better Benefits for State Workers
6. Better Pension for State Workers
7. Abolish Layoffs for State Workers
ARE THEY SERIOUS???
1. Pay your healthcare like 90% of the population already does you spoiled rotten union zombies!!!
2. Cuts must come from every branch and every program in Government you whining union brats... GROW UP!!!
3. Tuition hikes are purly market driven and NEED TO STAY THAT WAY!!! If people stop paying and attending the colleges then those colleges tutitions will come down. Are they this stupid???
4. State workers on the whole in this country are MASSIVLY OVER PAID and need IMMEDIATE CUTS IN THEIR SALARIES!!!
5. State workers on the whole in this country are MASSIVLY OVER COMPENSATED IN BENEFITS and need IMMEDIATE CUTS IN THEIR BENEFITS OVERALL!!!
6. State workers on the whole in this country are MASSIVLY OVER COMPENSATED IN PENSION BENEFITS and need IMMEDIATE CUTS IN THEIR PENSION BENEFITS OVERALL!!!
7. Cuts INCLUDING LAYOFFS must come from every branch and every program in Government you whining union brats... GROW UP!!!
These people SICKEN ME!!!
This is what Obama brings to the table with him... I hope your very proud of your messiah...
I agree with Eric. We are STILL in denial. Really, not even in denial because if your in denial, you have to at least have an idea that something is wrong. Midwest is still firmly in denial. Firmly.
"...definitely not far from the bottom...Housing will begin to reach bottom by the fall..."
$600+ Billion in resets 2010/2011
"...It would be great if we could contain all this financial gloom, doom, and disaster to those Ba$tard$ who caused it, and leave the rest of us alone..."
Amen, brother. All it involves is for the government not to write them checks secured by our future taxes.
Fat. Chance.
"...[#1-7]These people SICKEN ME!!!..."
Very well.
Compared to Social Security and Medicare, what percentage of our debt does all of that represent?
Could the secret $Trillion to banks cover it?
" Anonymous said...
SURPRISE! SURPRISE!!! ONE OF THOSE PIZZA DELIVERY PLACES HAD A LARGE ONE TOPPING PIZZA ON SALE FOR 5 BUCKS THIS WEEK???? A SOMEWHAT FAIR AND GOOD PRICE!!!!!!!!!!!????????
February 18, 2009 3:32 PM"
This offer comes with 1 (0ne) foreclosed house of your choice in Stockton-Modesto-Turlock-Sacramento areas.
Limit 10 (ten) per household...
Stupid, Idiotic Jerkoffs.
You ought to BUY NOW!
.
LET IT GO, THERE COMES YOUR "PANIC" RALLY TODAY. OH YEAH, THAT LOOKS LIKE CAPITULATION. THE MESSIAH HAS OPENED HIS MOUTH...STOCKS TO THE MOON!
.
remember when you were griping about Mac's plan to adjust principal owed? good job falling for the old 2 party hustle.
There is very little fear out there. We may still be in denial?
Stop using restaurants as any sort of guide to the health of our economy or the attitudes of the masses.
Its different this time. Thousands and thousands of people in every town (in the bubble areas) are living 100% free in stucco mansions. They are not paying any mortgage or any rent, they just stopped paying and the banks don't bother them. For now.
Still they know it will end someday so a little night on the town is a good way to cheer up. Restaurants will stay busy while all that fake extra money is sloshing around.
Oh, guess who will pay for those freeloaders?
GT Charlie
But in reality House prices in most areas are still apporx. %200 – 300% higher then they where in 2001 for no reason at all.
__________
So f*cking true, and they will stay there or go higher after the mortgage bailout.
Was talking to someone who bought a house in 1999 for $40K. I've seen pictures, very nice house. She has had to do a little work, but no biggie. Where are those houses? They are still being 'flipped for $150 or more. Everybody waiting for 'things to turn around'.
I mean, I'm on a budget here.
We are at the fucking bottom of the housing crash and it sucks because everything is still and always will be way too expensive for the average guy to afford.
I hate it.
Amtex said:
"The majority of Americans are still firmly in denial. It really is that simple. We think everyone pays attention like we do. "
Right on the money!!! They think it is happening everywhere but where they are.
My landlord is still in the Desperation phase. I've known him since the Euphoria phase (before he was my landlord).
He purchased in 2001 in an upscale middle class neighborhood, so he should be padded, right? He is hoping right now he can refinance with the valuation of the 2001 purchase price. The appraiser admitted she's going to have a hard to hitting that mark since he's going a few fix-it dings. Otherwise, he'd still be on the borderline.
I still think we are looking at another 30% reduction from here. We will have to wait for Panic and beyond for that to happen.
PG County, outside DC: 1996 ~$160k; 2006 ~$360k; right now ~$250k...typical short sale listing on trulia.com. But the other houses, still over $300k. It's denial, and the short sales don't factor as "comps" - but surely the cracks are beginning to show.
And all the folks who are out of work or seeing business slow to a trickle, or went into foreclosure - surely they are not in denial.
It's going to be different stages along the chart for different people at different times, Keefer.
"...everything is still and always will be way too expensive for the average guy to afford..."
I don't know.
The last bottom in '96 was somewhat affordable, and it was at the end of a decline nowhere near as serious as this.
Patience. Prices are going to decline a lot further.
This looks like a doomer gloomer blog. Let's say 10 million US citizens lose their jobs...no let's say 30 million, that's still a mere 10% of the population. Do you think that can take down 90% of the American economy. The people you think are in denial are just not focused on what's going on because they don't have to. Home prices are all according to location and the only ones that will suffer DRAMATICALLY are the ones that should. Try getting a deal in Manhattan, San Fran, Chicago, Dallas ect.,they all have tiny declines if any. Wake up it's not the end of the world just a re-adjustment, a new beginning, an opportunity to make more money. The so called Great depression still had most of the country doing just fine, get over this nonsense. All will be just fine for most of the people.
Mort Gage
I have a friend who put an ofter + 1,000 over the asking price for a cabin in Lake Tahoe. She said there were other offers...hummm...why did the sellers want her?? because she has excellent credit and a 10% dp.
She told me she'll make 100k at closing. (like the price is going to go up)
People everywhere still are in denial. They dont know what's a good deal and what isnt.
Anon said: "Still going down. Another 30-40% shave of the stock market."
I agree with you anon. Just wait till third and fourth quarter...
In 1930, the economists and bankers said prosperity would continue.
Where are we now?
February, 1930.
I guess a lot of it depends on your perspective, where you are in this world, what your surroundings look like.
From where I stand it seems we're still working our way through prolonged capitulation, or to put it another way, we're still in a state of surrender as the market continues to shake out the "bottom" and money still gets pumped out of the government spiget.
We'll move ahead of capitulation into despondency when the government puts its foot down and declares no more stimulus. At that point all good efforts will feel as lost, we'll settle into the bottom and allow despondency and depression to take hold.
I made a comment somewhere else on an internet msg board in a 2009 Prediction thread about Dec 31, 2009: DOW 4500 - scary to look at but it could at the same time be very real. And I think although the DOW is sinking under stimulus right now, it could go even further as the government pulls the reigns in on further handouts. After that bottom is found we'll crawl out of the rubble, wonder how we got ourselves into this mess and ignorantly and egotistically begin the process all over again - - - American's will always lived in a suspended state of denial.
This looks like a doomer gloomer blog. Let's say 10 million US citizens lose their jobs...no let's say 30 million, that's still a mere 10% of the population.
Hmmmm, but we're talking about WORKING POPULATION, not overall population that includes welfare queens, zillion kids, homemakers, disable people, and millions of illegals, plus millions of inmates. You do realize that there's 1 million gang members in the US right now.
It's totally misleading to compare unemployment rate to 300 million inhabitants.
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