Stocks headed for a fall

How will housing affect the US and world economy? How will the economy affect housing?

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Stocks headed for a fall

Postby Matthew » Fri Feb 23, 2007 12:05 am

MarketWatch
Stocks are headed for a fall
Wednesday February 21, 10:54 am ET
By Irwin Yamamoto

"The housing industry remains on the verge of a massive collapse. In our estimation, this real estate debacle is only in the top half of the second inning of a nine-inning ballgame."

read this article, its great.




http://tinyurl.com/yuxcq3
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Postby downpayment » Fri Feb 23, 2007 12:19 am

I saw that yesterday and almost moved everything to cash after reading it, but decided to hold out. With Nikkei well above 18000 tonight and my long-term investment philosophy to hang on rather than try and "time the market", I figure I would hang in and weather the storm rather than panicking and making mistakes. Most other sources I've read call for a 10% correction in the next year (or sooner).
"People get weak in the knees and say, 'Oh, I can do this. I love this'"
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Postby The Tim » Fri Feb 23, 2007 8:20 am

Much to my surprise, the Seattle Times printed a similar article today:

Are stocks overdue for a correction?
Housing is "the quintessential leading indicator of the economy," says Merrill Lynch economist David Rosenberg. ... The worst in housing, Rosenberg says, "is actually still ahead of us."
...
"The market is often insane," says Fred Hickey, editor of the High Tech Strategist. "We saw that insanity in spades in 1999 and 2000," he says, and investors "ignored all the warnings then, too."
For great justice.
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Postby T, V & Mr. B. » Fri Feb 23, 2007 8:49 am

That coupled with, and causing the Debt-Market bomb as Jim Jubak states, is a very, very scary thing.
there will be a quick reduction in the amount of money available to borrow and will force the global economy into a credit queeze. As I said before, Liquidity is what has raised the housing prices and when that is gone,.... poof! and I mean POOOOOOF!
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Postby synthetik » Fri Feb 23, 2007 6:13 pm

I think we'll probably see some kind of Black Monday type event here very shortly.

I really think the implosion in subprime will be the catalyst for the markets to finally tank.

The last few days have been really exciting...
“If fascism ever comes to America, it will come wrapped in the flag and carrying the cross.” - Sinclair Lewis
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Postby Peckhammer » Sat Feb 24, 2007 9:32 am

synthetik wrote:I think we'll probably see some kind of Black Monday type event here very shortly.

I really think the implosion in subprime will be the catalyst for the markets to finally tank.


I look forward to the buying opportunity.
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Postby synthetik » Tue Feb 27, 2007 1:05 pm

What did you guys buy? I've got puts on FMT, LEND, PMI, WCI, HD, WM, DELL... most purchased prior to this week and Jan 08s, but a few a lot closer in.

Dow was down almost 540 points at one point today. Wow!
“If fascism ever comes to America, it will come wrapped in the flag and carrying the cross.” - Sinclair Lewis
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Postby Eleua » Tue Feb 27, 2007 2:35 pm

On Friday 2/23, synthetik said that a 'black monday' type of event was highly likely.

On Tuesday 2/27 we came pretty darned close.

Not bad shooting. Not bad at all...
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Postby synthetik » Tue Feb 27, 2007 2:55 pm

Yeah, I suppose for a "Black Monday" we'd have to lose about 2500 points off the DOW?

Still, a "good" start. LOL

Burn baby, burn.
“If fascism ever comes to America, it will come wrapped in the flag and carrying the cross.” - Sinclair Lewis
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Postby Wanderer » Wed Feb 28, 2007 2:38 pm

I got Russel ishares puts at 82 last week. Burn indeed. Its not that I HOPE the bounce today was an aberation... its just that I THINK it is. This isn't over yet.
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Postby synthetik » Wed Feb 28, 2007 4:22 pm

Evidently stocks have "normalized" and Cramer has called it a "huge buying opportunity"

Personally I think this is the beginning of the end. No telling how much Bernanke's comments will "help" to further sustain this insanity.

My guess is that by next week we'll be seeing more big drops and volatility.
“If fascism ever comes to America, it will come wrapped in the flag and carrying the cross.” - Sinclair Lewis
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Postby T, V & Mr. B. » Wed Feb 28, 2007 9:58 pm

Normally I like Cramer, but he of all people should know not to try and catch a falling knife. I've read his books and he is actually spouting differnt stuff than what he preaches in his books. Don't know what gives with that. and I don't agree with him, unless he is simply stating in future terms as far as buying opportunities are concerned. If course, you still have to be very picky.
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Postby synthetik » Wed Feb 28, 2007 10:11 pm

Cramer and CNBC are a bunch of asshats. Cramer was promoting buying tech stocks at the end of Feb. 2000, right before the Tech Crash hit. Things obviously haven't changed and people are still listening, despite his idiocy.

http://tinyurl.com/yuorly

"We feel obliged to point out the outrageously wrong forecasts of analyst Jim Cramer. At the 5th Annual Internet and Electronic Commerce Conference in New York on February 29, 2000, Cramer said, "You want my top 10 stocks for who is going to make it in the new world?" Cramer then insisted on listing the entire group as if offering the rarest gems. The list included Ariba, Digital Island, Exodus Communications, Infospace, Inktomi, Mercury Interactive, Verisign, and Veritas. Cramer concluded by claiming he loved his list so much he would rather not own any other stocks. Just eight trading days later the Nasdaq peaked and crashed. Ariba, Infosapce, Digital Island, and Exodus are down more than 90%. The best performer in Cramer's list, Mercury Interactive, has lost 'only' 38%."

Newman goes on to say proof that the mania has not yet reached its final end can be seen in the way that Cramer is still listened to. In fact, CNBC hired Cramer upon his 'retirement' from actively managing people's money, to provide investment advice to its viewers in prominent formats and round table discussions. Do they even try to get the best people to provide advice and commentary, or just look for 'personalities' and media showmen who can put on the most exciting 'show' for viewers.

It's interesting that on February 29, 2000 when Cramer was expounding at the Internet and Electronics Conference in NY on the exciting future for Nasdaq stocks, my article warning that the Nasdaq was about to crash to its 200-day m.a., and that we advised selling the Nasdaq short, was being edited for its publication in the March 6, 2000 issue of Barron's. The Nasdaq's plunge began just 3 trading days later.
“If fascism ever comes to America, it will come wrapped in the flag and carrying the cross.” - Sinclair Lewis
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Postby TJ_98370 » Tue Mar 06, 2007 3:39 pm

An interesting and relevant article in the most recent issue of Time Magazine

http://www.time.com/time/magazine/artic ... 24,00.html
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Postby Matthew » Tue Mar 06, 2007 5:44 pm

TJ,

great article. The first two paragraphs speak volumes about where we are currently at.
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