Why the recession (and the bear market) is now over and done...

Discussion in 'Wall St. News' started by Port1385, Apr 12, 2009.

  1. I cannot help but raise a dissenting voice to statements that we are living in a fool's paradise, and that prosperity in this country must necessarily diminish and recede in the near future. I feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices.

    This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years.

    The decline is in paper values, not in tangible goods and services...America is now in the eighth year of prosperity as commercially defined. The former great periods of prosperity in America averaged eleven years. On this basis we now have three more years to go before the tailspin.

    Hysteria has now disappeared from Wall Street. The Wall Street crash doesn't mean that there will be any general or serious business depression... For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game... Now that irrelevant, alien and hazardous adventure is over. Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before.

    The end of the decline of the Stock Market will probably not be long, only a few more days at most. I see nothing in the present situation that is either menacing or warrants pessimism... I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress.

    The spring of 2009 marks the end of a period of grave concern...American business is steadily coming back to a normal level of prosperity. While the crash only took place six months ago, I am convinced we have now passed through the worst -- and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us.
  2. wat
  3. [​IMG]





    The resultant delinquency ratio for February 2009 increased to 1.431% from 1.281% one month prior. Such ratios above 1% reflect levels not seen in since April 2005. What is more concerning, however, is that the delinquency percentage through February 2009 is more than three times the 0.399% reported one-year prior in February 2008. The increase in both delinquent unpaid balance and delinquency ratio over this time horizon reflects a slow but steady increase from historic lows through mid-2007.

    Assumptions based on three-month historical data:

    * Over the past three months, delinquency growth by unpaid balance has averaged roughly $1.65 billion per month, while the outstanding universe of CMBS under review has decreased on average by $3.5 billion per month from pay-down and liquidation activity.

    * If such delinquency average were again increased by an additional 25% growth rate, and then carried through the end of 2009, the delinquent unpaid balance would top $32 billion and reflect a delinquency percentage slightly above 3.8% by December 2009.

    * In addition to this growth scenario, if one adds the potential default of the $3 billion Peter Cooper Village / Stuyvesant Town loan and the $4.1 billion Extended Stay Hotel loan, the delinquent unpaid balance would top $39 billion and reflect a delinquency percentage near 5% by December 2009.

    Prosperity ? LOL !

    :p :) :D
  4. If the banks were to win a three trillion dollar lottery I still wouldn't agree.

    How can you be so optimistic when there hasn't even been a price discovery of the toxic assets?

    There are still two major chapters left. The first will be when the banking plan discovers the true price of toxic assets and we are left with a bunch of insolvent banks (surprise surprise). The second will be a full frontal bank nationalization.

    The stress tests are coming back far worse then expected. The future of almost all the banks for the next 2-4 years is absolutely horrible.

    The banking plan is just an easy way for Obama to nationalize.

    What do you think will happen to the market when a large amount of the banks become insolvent and concrete plans of nationalization come about?
  5. [​IMG]
  6. hayman


    No offense Port, but are you puffing on the crack pipe again ??

    As the other posters mentioned, we are far from in the clear. Major things to worry about:

    1) A job loss absolute amount and rate, that has been unparalleled in prior recessions;

    2) A spiraling debt, that will make our debt less attractive to those financing it;

    3) An accelerating wave of foreclosures;

    4) An expected new wave of foreclosures in 2010, when a lot of adjustable rate mortgages are due for "an increase";

    5) As a poster above mentioned, our extremely tenuous banking situation;

    6) A falling dollar;

    Need I go on ????

    My educated guess here is that the market trades in the 6500 to 8500 range for quite some time, and that the bias will be downward.

    If the SEC, in its infinite stupidity decide to tax stock transactions, watch out below..............
  7. hayman


    P.S. Here are some subsystems that are at dangerous levels:

    1) Mortgage/Banking industry;

    2) Credit Card Level debt;

    3) College Tuition debt;

    4) Medical debt, and the incredible medical cost rise;
  8. jprad


    Bad form (and karma) to not give props for words not your own...


  9. I like your logic my man. But what about unemployment? These levels have got to tail off and some stabilization enter the picture. That is the wild card.
  10. Check some of the dated diction in port's post. He clearly lifted it from some prognosticator circa 1930. Nice April Fool's.:D
    #10     Apr 12, 2009