Cutten, I could give two shits if Heebner is right or not. Quite frankly, no one has a crystal ball, NO ONE. My response was to another poster acusing Heebner of talking out of his ass. Let's give the guy credit for being an outstanding trader. Keep in mind, this guy was short housing and sub prime from the HIGHS. He is not a perma-bull and he is not talking his book. The guy is long commodities/energy and short banks. Let's leave it at that.
I only commented because steve cohen said its impossible to outperform unless you make big concentrated bets and hit them out of the ball park. the obvious downside is if you get it wrong. It goes wrong real fast. Ken seems to have mitigated this by getting out early, but he still has sizeable positions. He cant exit that quickly. Look at eddie lampbert right now. His portfolio looks like a disaster.
Is he right about housing? Probably.. Is he right about the bottom in the economy? Doubtful but he didn't disclose any positions who who knows what he's actually doing.
Well, boys, it's a different era. A new day and a new era. And it's not for the better. Do you remember Buffet speaking to Berkshire investors? He was minimizing their expectations about the future. Think he was aiming low so he could surprise them with an overshoot? I don't. Take everyone who succeeded in the past, who thinks the economy is anything other than a basket case, and will be until some structural changes happen to improve the job market and wage structure for American workers, foreclosures and housing inventories stop rising (even with new permits way down, inventories are still rising), weak banks fail and stronger banks clean up their bad loans, and if they're pointing to their past out-performance as a sign of credibility that their belief that there is any reason for optimism regarding the American economy, they're arguing against Warren Buffet's timely warning to Berkshire investors. But I've been wrong before. Maybe housing values will rise soon, banks will start loaning money again, factories will shut down overseas and reopen back in the U.S., people will start buying SUVs, the employment rate will soar, the automakers will sell 18 million instead of 11 million cars this year, and things will be great. 175k Wall Street layoffs over the next 12 months won't help Manhattan real estate, with apartment sales there down 22% already versus last year. That won't stop deteriorating with more layoffs every day. Pretty soon, you won't need to call ahead to get a table at Le Cirque or Peter Luger's. Oh, and commercial is next. Look at the Big Box retailers and strip centers. Big box and department stores are yanking expansion stores, and tenants in strip/retail centers are starting to default at very high rates on their loans.
commercial is lagging residential real estate. commercial is softening... maybe we get foreign buyers using their stronger currency ala Japanese is last 1/2 of 1980s, but i'd say commercial rollover has begun.
We're in a recession given 1980's CPI. Inflation is red hot. Consumer tapped. Housing in the crapper. We need to enter recession (wage-price decline) before we can start talking recovery. This hasn't happened. Expecting the economy to mysteriously rebound and steam to new highs doesn't make any bit of sense. Where will this new source of low cost productive capacity come from? What exactly is going to save us?? Please be specific. Theres a lot of reckless optimism around here passed off as sound analysis. Higher rates signal a healthier market so everyone will pile in??! Hmmm. That ignores a lot of cornerstone-type metrics that will only worsen - not recover - when rates go up...
totally agree. If we rebound what leads it? I just dont see a recovery until we get a sound currency not the POS we have now. Were running around with our heads cut off right now. And no more financial ponzi scheme bullshit scams. Real productive investment. None of this stuff is easy and it takes guts. Something no one has right now. There is going to be a moment when we stare down this gigantic black hole and realize that were completely screwed over the longterm if we dont make very difficult choices. The credit games are over.
Agreed the subprime is a small problem, so ask yourself how did a small problem become so important. If it is indeed the trigger to a far larger debt problem (CDS) for example then do not hold you breath for a quick recovery. Why are Banks being reloaded at crazy low rates and why can these banks now treat current loses as future profits brought forward if the subprime mess is only a few lousy 100B.... maybe 500B more or less. Ask yourselves, not what you think you know, but what is it that you do not know and start digging there for some answers. regards f9