Subprime Meltdown, the US Housing Market & the Direction of the US Economy in 2009 and 2010

[Eloi]

Quote, originally posted by marzen »

They just halted the trading of Countrywide shares.... Modified by marzen at 10:16 AM 1-8-2008 Update...they just resume the trading. lol....drama drama... Modified by marzen at 10:17 AM 1-8-2008

They must have halted trading so that Orangelo Mozilo could unload his remaining shares in Countryslide.

Boy did he ever throw Countrywide shareholders overboard last year.

[marzen]

Stick a fork in it. CW is done.

[beng]

Some interesting notes as of today's close.

The S&P is now below the 1/1/07 open.

The S&P is only 16 points ahead of its lowest point in the last year.

...and take a look at the wild ride of the last week:

[marzen]

Ouch!

http://money.cnn.com/2008/01/0...10815

http://money.cnn.com/2008/01/0...10817


Modified by marzen at 3:13 PM 1-8-2008

[beng]

From the above article:

Quote, originally posted by cnnmoney »

Credit card debt spikes to six-month high Total consumer borrowing shoots up to 7.4 percent in November as buyers rely on credit cards in the face of housing market collapse. WASHINGTON (AP) -- Consumer borrowing rebounded in November as credit card debt shot up by the largest amount in six months. The Federal Reserve reported Tuesday that consumer borrowing rose at an annual rate of 7.4 percent in November, far higher than the 1 percent rise in October. The category that includes credit card debt surged at an annual rate of 11.3 percent, a six-month high, reflecting the fact that shoppers are continuing to rely heavily on their credit cards to finance purchases since home equity lines of credit have become harder to get. The category that includes auto loans also increased in November, rising at a rate of 5.1 percent after having fallen by 3.5 percent in October. The 7.4 percent overall increase in credit pushed total credit up by $15.4 billion - much stronger than the $8.5 billion increase that analysts had been expecting. The 11.3 percent rise in credit card debt was the seventh straight month of strong gains in this area and was the biggest jump since a 12.8 percent rise in May.

Things are unwinding pretty quickly....and judging by the second article... the housing trough may be deeper than expected.

[beng]

...and here's another sobering chart:

Countrywide Financial - 1 Year

[marzen]

Quote, originally posted by beng »

From the above article: Things are unwinding pretty quickly....and judging by the second article... the housing trough may be deeper than expected.

That's it. Things will start to unwind very rapidly from this point on ward. This is going get really bad.

Here is another article from Bloomerberg
http://www.bloomberg.com/apps/...onomy

Quote »

``With job losses mounting, this could be the tip of the iceberg with consumers needing to rely more on credit cards now that personal income is lagging,'' said Chris Rupkey, an economist at Bank of Tokyo-Mitsubishi, in New York.

[marzen]

Thom Hartmann says US Economy is about to Collapse.
http://www.youtube.com/watch?v...lated

[jnm2.0t]

The same Thom Hartmann that took over on Air America for Al Franken...

the same Thom Hartman studies the constitution, ADD, ADHD, sprituality, voting fraud, and global warming according to wiki...

thanks... but how about something from at least an economist, not a jack-of-all-trades talk show host.

[marzen]

Quote, originally posted by jnm1point8t »

The same Thom Hartmann that took over on Air America for Al Franken... the same Thom Hartman studies the constitution, ADD, ADHD, sprituality, voting fraud, and global warming according to wiki... thanks... but how about something from at least an economist, not a jack-of-all-trades talk show host.

I think he makes more sense with all the data we collectively have in hand than you.

[jnm2.0t]

i dont pretend to be an economist.

[marzen]

Quote, originally posted by jnm1point8t »

i dont pretend to be an economist.

Quote »

``With job losses mounting, this could be the tip of the iceberg with consumers needing to rely more on credit cards now that personal income is lagging,'' said Chris Rupkey, an economist at Bank of Tokyo-Mitsubishi, in New York.

Weak job market, diminishing home equity, weakening US dollar, exploding national and personal debt, tightening credit market, rising energy price, weakening housing market, disappearing manufacturing industry and the list goes on.....

[maskedSONY]

Quote, originally posted by marzen »

Weak job market, diminishing home equity, weakening US dollar, exploding national and personal debt, tightening credit market, rising energy price, weakening housing market, disappearing manufacturing industry and the list goes on.....

I just wonder when you will have something to post in this forum that is truly your own thoughts, and holds some water, not just a couple of drops. You have not even proved that jnm1poin8t was trying to be an economist, you just beat him over the head with citations from articles.

With the countrywide news, I feel the same as beng. I'm really not sure what to make of the trough that we're in right now. Either way, I hope we all learn something from all of this.

[jnm2.0t]

Quote, originally posted by Chris Isodore »

NEW YORK (CNNMoney.com) -- Martin Feldstein, the Harvard economist credited with being one of the fathers of the Bush administration tax cuts, says the U.S. economy is now likely to slip into a recession, and that avoiding one will take a new round of tax cuts and interest rate cuts from the Federal Reserve. Feldstein is president and CEO of the National Bureau of Economic Research (NBER), the organization charged with determining when the economy is in a recession and when it is growing. He told CNNMoney.com that he had thought the chance of a recession was about 50-50 even before last week. But he said he now believes a recession is likely, as he pointed to both a report from the Institute of Supply Management showing manufacturing activity in decline for the first time in almost a year, and Friday's December jobs report that showed a jump in the unemployment rate to a two-year high. He did not give a new percentage for the chance of a recession, saying that will depend on what both the Federal Reserve and Congress and the administration do in response to the weakness. "It's not just clear that lower interest rates and monetary policy more generally will have enough traction because of conditions in the credit market," he said when asked if the Fed could hold off a recession. "We should have some fiscal stimulus to back that up."

from here posted today, 1/8/08.

leading economists are also uncertain about what will happen. recession likely? according to this guy, yes. recession defininate, according to this guy, no.

edit for date typo


Modified by jnm1point8t at 7:13 AM 1-9-2008

[Bob Opla]

Quote, originally posted by marzen »

Weak job market, diminishing home equity, weakening US dollar, exploding national and personal debt, tightening credit market, rising energy price, weakening housing market, disappearing manufacturing industry and the list goes on.....

How many of those affect you personally?

[iThread]

Come on guys, we made it past two pages without folks calling each other out.

[marzen]

Quote, originally posted by iThread »

Come on guys, we made it past two pages without folks calling each other out.

I am abiding by the rule and keeping my posts objective as possible. It is quite amusing when someone actually complaints that I am not posting enough of my own opinion.

[iThread]

I'm not singling anyone right now. It was directed at the participants in general.

[marzen]

Quote, originally posted by Bob Opla »

How many of those affect you personally?

Bob, I think you are confused as to what we are discussing here in this thread. Everything I said above is relevant to "the Direction of the US Economy in 2008" I think you should check the thread title before you post reply here.

[marzen]

Quote, originally posted by jnm1point8t »

from here posted today, 1/8/07. leading economists are also uncertain about what will happen. recession likely? according to this guy, yes. recession defininate, according to this guy, no.

You just proved my point. That article was dated back in January of 07?
Mr. Feldstein was actually ahead of his peers. And boy how much has changed in terms of unfolding data since then? Recession has already begun.


Modified by marzen at 6:40 PM 1-8-2008

[Bob Opla]

Quote, originally posted by marzen »

I think you should check the thread title before you post reply here.

not into reading. just posting

[marzen]

Mr. Feldstein said Recession is "Likely". "Definite" was your word. that is like adding words to the original article. Who does that?

Here is another article pointing to the fact that we are already in Recession.
http://seekingalpha.com/articl...-here

How about BBC article? is that legit enough for you? Truth is, mainstream media is now reporting inevitable recession. Many of us predicted this nearly a year ago.

http://news.bbc.co.uk/1/hi/business/7176255.stm

BTW, you should be fine with this articles as they all cite the report from an "ECONOMIST" a chief North American economist at that.

Quote »

The U.S. economy has landed in recession, according to an economist at brokerage firm Merrill Lynch. David Rosenberg, Merrill Lynch's chief North American economist, said Friday’s employment report — which showed the U.S. jobless rate jumped to a two-year high of five per cent in December on weaker-than-expected job creation — "strongly suggests that an official recession has arrived."

Modified by marzen at 7:12 PM 1-8-2008

[marzen]

Quote, originally posted by Bob Opla »

not into reading. just posting

Quote »

LATEST ECONOMIC NEWS US shares slump on work worries 'Contraction' in US manufacturing US prices jump most in two years US factory prices at 34-year high New US jobs slow in November US reduces 2008 growth forecast US house prices continue to slide

source: news.BBC.co.uk

[marzen]

Quote, originally posted by iThread »

I'm not singling anyone right now. It was directed at the participants in general.

I hear ya!

Well, I am scoping through usual websites I visit daily and it is just everywhere. They are finally letting the cat loose.

Please brace yourself for a rough ride ahead.

http://money.cnn.com/news/news...2.htm
http://business.scotsman.com/e...02.jp
http://www.theaustralian.news.....html

[jnm2.0t]

Quote, originally posted by marzen »

Mr. Feldstein said Recession is "Likely". "Definite" was your word. that is like adding words to the original article. Who does that?

i never said 'definite' came from the article.


Modified by jnm1point8t at 6:30 AM 1-9-2008

[jnm2.0t]

Quote, originally posted by marzen »

You just proved my point. That article was dated back in January of 07? Mr. Feldstein was actually ahead of his peers. And boy how much has changed in terms of unfolding data since then? Recession has already begun.

actually that was a typo. maybe if you had read the article you would have seen it was written 1/7/08 and updated 1/8/08


Modified by iThread at 8:39 AM 1-9-2008

[jnm2.0t]

Quote, originally posted by marzen »

http://money.cnn.com/news/news...2.htm http://business.scotsman.com/e...02.jp http://www.theaustralian.news.....html

page not found x3

[beng]

Goldman has begun saying the "R" word....

I respect Goldman... based on their subprime moves and the perfomance of their stock through all of this. So when they say it, I think it carries more weight.

Quote, originally posted by bloomberg »

BN 08:26 Goldman Says U.S. Economy Slipping Into Recession By John Fraher and Sarah Thompson Jan. 9 (Bloomberg) -- Goldman Sachs Group Inc. said the U.S. economy is probably slipping into recession and forecast the Federal Reserve to respond by slashing interest rates. Goldman predicts the Fed to cut its benchmark rate to 2.5 percent by the third quarter, according to an e-mailed strategy note. Goldman said in November the Fed would reduce its key rate, currently at 4.25 percent, to 3 percent by the middle of 2008. The number of Americans signing contracts to buy previously owned homes fell more than forecast in November and the jobless rate rose to 5 percent in December, the highest in two years, reports in the past week showed. Payrolls rose by 18,000, the least since August 2003, evidence the economic expansion is cooling after a third-quarter surge as the housing slump enters its third year. Goldman, which last week forecast the Fed would reduce its target rate by half a percentage point this month, also said today it expects the U.S. economy to expand 0.8 percent over the full year. Goldman recommended that investors increase their holdings of healthcare and consumer-related stocks.

[marzen]

Quote, originally posted by jnm1point8t »

page not found x3

Would you believe it, those were live links until last night. But it appears that they are pulled. LOL

Here is Reuters article. Source coming from London.

http://www.reuters.com/article...=true

[marzen]

Quote, originally posted by jnm1point8t »

actually that was a typo. maybe if you had read the article you would have seen it was written 1/7/08 and updated 1/8/08.

Are you arguing the fact that the recession has already begun? or that I failed to recognize your typing mistake? And please stop making up facts and adding words.



Modified by iThread at 8:40 AM 1-9-2008

[jnm2.0t]

Quote, originally posted by marzen »

And please stop making up facts and adding words.

where

[jnm2.0t]

Quote, originally posted by marzen »

Are you arguing the fact that the recession has already begun? or that I failed to recognize your typing mistake?

i think it was pretty clear what i was saying.


Modified by iThread at 8:41 AM 1-9-2008

[marzen]

Quote, originally posted by beng »

Goldman has begun saying the "R" word.... I respect Goldman... based on their subprime moves and the perfomance of their stock through all of this. So when they say it, I think it carries more weight.

I'd say close to $70mill bonus to CEO last year was clear sign that they were doing just fine compared to firms like Bear Sterns or Merrill Lynch. However, I personally believe the recession started as far back as first quarter of 07. It is now being let out. That's for another day to expand upon.

I am glad that I have consolidated all the shares. That's for sure.

[1Point8TDan]

So when will the stock market collapse? I already took 75% of my money out of my stock brokerage firm.

[jnm2.0t]

Quote, originally posted by 1Point8TDan »

So when will the stock market collapse? I already took 75% of my money out of my stock brokerage firm.

anyone have a crystal ball?