Comments on: The Larry Kudlow Variety Show is Getting Interesting

By: Mr Mortgage

Mr Mortgage — Sat, 19 Jul 2008 14:39:30 +0000

JC nails it.

By: jc

jc — Sat, 19 Jul 2008 13:40:58 +0000

Gresham’s law in full effect,when the rating agencies gave top ratings to the bundles including sub-prime and other garbage they debased the value of all mortgage backed securities.The “perfected” problem proving ownership further depresses their value.

By dumping foreclosed homes, the banks are producing a downward price spiral that leads to more foreclosures and forced sales – especially in the formerly hot markets. “Jingle mail” with homeowners electing to walk away from underwater homes is a wildcard that could make things much, much worse.

So you have the underlying assets in a death spiral and then you have to apply the “lack of quality” deflator to the value of the paper – and thats the mess the banks have on their hands. Then you apply a little fear (of failure)factor to the banks stock – and thats what they have to offer investors when they look to raise capital to cover their asset writedowns. All bad things come to an end but it’s hard to imagine a happy ending to this.

By: ComicPro

ComicPro — Fri, 11 Jul 2008 13:04:53 +0000

All you “armchair analysts” take a breather. Common sense tells even the dumbest of people that the economy is in shambles, jobs are being lost by the thousands and we won’t even talk about housing. I laugh when I see these posts about this person perma-bull and this bear blah blah. Their agenda is simple: keep the sheep thinking everything is hunky dory and they will keep the pipeline full. Scare the bejesus out of people and they clamp down on everything especially their purse strings! Wall Street is to blame for ALL of what is bad in the markets. sure they are blaming the ALT-A or Subprime guy/gal for not paying their mortgage but really who securitized and sold those toxic loans and who failed to police the loans that were being sold to make sure they were what they said they were? NOBODY they were too busy making money!!!!

By: HousingRealist

HousingRealist — Thu, 10 Jul 2008 15:13:10 +0000

The bubble in Japan exceeded that of the US. Buildings leveraged at 500million in japan were written down to 50 million. At the height of the market in Tokyo, the estimated aggregate value of RE exceeded that of all the real estate in the US. The Nikkei went from 10,000 in 1985 to 40,000 in 1989. The Japaneese went through a boom in RE and equity markets at the same time. Furthermore, their banks did not write down assets like our banks have been doing. Don’t get me wrong we are having a tough go, and we may very well hit your 1050 s&p. Which would roughly be the average decline of a bear market since wwII. We are not entering a depression however.The comparison’s to 1929 or Japan I believed are flawed. The P/E ratio of the Nikkei in 1989 was 60. The S&p 500 in the year 2000 was 31. Today the s&p (depending on using operating or reported earnings) is somewhere in the neighborhood of 15-18. The NASDAQ of year 2000 at 5000+ is a better comparison to the Nikkei. Commercial RE in Tokyo’s financial district at the height was $139,000 per sqft. That’s no typo. So please, if you are going to make comparisons of the US and Japan, please provide some data to back up your hypothesis.

By: Troy

Troy — Thu, 10 Jul 2008 09:50:18 +0000

Are we going to eclipse the 10 year period after 1929 as the worst 10 year period in history?

Think Japan of the 1990s, but a bit worse since we’ve got much more wealth disparity and middle-class over-stretch.

Total household debt has risen from $8T in 2001 to approaching $15T for 1H08. Wages have been flat since then.

As for the S&P bottom, I call 1050 in December as the gathering place. What it does from there, dunno.

By: Troy

Troy — Thu, 10 Jul 2008 09:45:22 +0000

I know of very few people who as you say “don’t know where their next meal is coming from”.

just wait until their last working credit card stops.

By: HousingRealist

HousingRealist — Thu, 10 Jul 2008 04:54:27 +0000

Eternal Op. – I know of very few people who as you say “don’t know where their next meal is coming from”. Believe it or not, there is a huge part of our country who is not walking away from their homes. Try Nevada east, ex. Florida, NY, parts of NE. Do you even know what had to happen to force this country into a depression in the 30s? 1.) Both Fiscal and monetary policy were implemented poorly. 2.) The service based economy that we have now is much cyclical than our old manufacturing economy. 3.) A much more global economy. I’m curious for all you depression barking folks, where does the dow or s&p bottom? The top on the s&p was 1562, currently sitting at 1240. Bottom set in 2002 of 776. Prior top in March 2000 or 1527. Are we going to eclipse the 10 year period after 1929 as the worst 10 year period in history? By the way E.O., I’m fine, and frankly doing better than I even have!

By: admin

admin — Thu, 10 Jul 2008 02:17:34 +0000

Thanks Maj. I appreciate the kudos. That Donald Luskin is a despicable creature, so arrogant. He will lose everything within a years time for his year of relentless pumping. Hey, I got 300 million americans who think things are tough vs 10k in Manhattan who think all is great. It is an absolute insult for Luskin and Kudlow to tell 300 million Americans every day they are full of shit.

By: Major

Major — Thu, 10 Jul 2008 02:09:00 +0000

Batman was a horrible perma-bull for years when the market was tanking. I’m not sure what changed his tune, but he’s been singing this song for at least a year. Kudos to him.

I had stopped watching Kudlow because his spew was intolerable. But, I happened to catch it last week and started watching again. Dennis Kneale, Mark Haynes, and the daytime crew of CNBC (except Rick Santelli) are an embarrassment to “reporting”. Watch Bloomberg for a day and the difference will slap you in the face. The guy with the beard on Kudlow’s show is perhaps the biggest moron to ever grace a television screen. I’ve never seen anyone more inept in my entire career in this industry and that’s about 20 years from my intern days.

Mr Mortgage – a quick pat on the back to you. What you do here needs more attention nationally. You’ve been ahead of the curve for sure and that needs to be pointed out. Thanks.

By: jon

jon — Thu, 10 Jul 2008 01:57:13 +0000

I didn’t bother with the link, but if ‘Batman’ Joe B. is now an economic realist, the world must me really be coming to an end. Back in the day (dot.com bubble that is), Cramer and company @CNBC use to bring on perma bull Batman whenever the market was taking a swoon.