He's a "trader" unwilling/unable to go short. Oh, he also has a mortgage business that apparently isn't working much, so he comes here to tell everyone to stop "being depressed" and start smiling again, so that the market will go up, and up, and up...
my humble opinion is that we are on a cliff and about to fall. we have a mortagage crisis,not a problem but an actual crisis. large banks are experiencing billions in losses and there is still no end in sight. individuals most prized asset(their home) is losing value on a daily basis. real estate is in a downward spiral with no bottom in sight and there is an inventory glut that seems years away from clearing out. the consumer is maxed out on credit and cannot borrow .this is very dangerous because many consumers are actually resorting to credit cards to pay for basic necessities such as food,gas,and utility bills. banks are tightening credit to indiviuals and business. finally,the media is helping poeple feel even more poor with all the doom and gloom stories(which could prove to be warranted). the only monkey wrench is employement and i think the jobs picture is going to get worse as well. how can we escape a recession with such stromg headwinds. the weak dollar and cheap exports just is not powerful enough to defeat the negative forces we are facing. any opinions?
Where do you see evidence for that? Rates are coming down, and quickly so. And it's not like they were 'high' in the first place if we compare our environment to 1974 or 1982. Banks are expanding their loan books (outside of mortgages). Credit is freely available to any individual and company that is worthy of credit.
100% agreed. the credit card company's are just reallocating risk to people who can actually pay them back - most of my credit limits have jumped in the past few months.
Of course high yield and junk credit is getting tighter (BBB- corporate credit, leveraged buyout debt, packaged and sliced "zero risk" debt CDOs) and that's a good thing because unworthy creditors will get wiped out of the system. Once enough garbage borrowers are eliminated out of the world of credit this debt class will once again become attractive for investors since a lot of the very worst risk is gone, driving down yields eventually. All this is happening while the Fed is cutting and Libor is dropping. 15y and 30y average mortgage rates are dropping (http://www.bloomberg.com/markets/rates/). Low yields on 10y treasury bonds signal very low inflation expectations compared to historical standards. I'd get concerned about a credit crunch once 2y and 10y yields start sky rocketing because of rampant inflation expectations while GDP is slumping. However, there are no indications of that happening simultaneously as of now. Let's see the incoming data in the coming quarters.
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That is simply not true. Banks contract their loan books while interest rates are declining. The risk/reward ratio is not to their liking at these very low rates. They will open up their loan books when interest rates look like they are stabilizing or have a good chance of moving up. History has shown this to be true, and in my 36 years of business experience I have never personally seen banks open up during declining interest rates. I have been doing business with wells fargo for the last 9 years and they are not actively seeking new commercial customers. edit: consumer credit is different. Sure they want consumer credit, look at the spread they are able to charge. They can afford the risk there.
The recent fundamental data suggests that the US is in a recession. The retail sales number next Wednesday will help confirm or deny this...
China, India, Brazil, and Russia. Their infrastructure building can keep our economy going for the next 100 years.
yes we are in a recession, that was confirmed by the markets decline over the last 5 months or so, the markets know 6 to 12 months out if were in a recession or a bull run or whatever, then after the fact joe public starts to ask questions whats going on, are we definately in a recession bla bla, remember this is not a correction we had those in feb and again in august as the markets continued higher, then to play devils advocate as another poster said you will have to see job growth, housing has to bottom, inflation in check, right now its hard to make a case for any of those in the near term, but when the markets start heading higher a year maybe two from now those questions will be answered, so follow the price action that is where all your questions can be answered think outside the box and dont let the media twist your head in an upheval