Hi Maurice. Get back here where you belong, from where you wandered off to …
Message 16137845
A good Sunday to you and I first, and the rest of the thread later. Now you see why this thread must be gentle with the hoofed animals such as yourself. If you had not stayed on the thread, the rest of us would just be a bunch of starved grumpy bears growling at each other, scaring each other silly:0) I do appreciate that you transfuse some needed optimism that keeps the thread energized, making all aware that events may still work out your way. We need that strong flame of hope kept going; else the den would be pitch dark, leaving all of us unable to even see our own shadows.
This past week was exciting in that many influential people spoke up on some critical issues that will wrap up our past and impact our future. The subject of the dollar was illuminated and debated. The dirty secrets of past JDSU profitability were put under the light. Dell’s famous cash hoard had been formally designated to buy back its worth-less shares at previous inflated prices. More folks got fired. A Saving & Loan went belly-button exposed to the sky. Doctor Greenspankie hinted at yet another FED rate decrease, and my Hong Kong home mortgage banker issued a letter notifying me that my new monthly payment will reflect a rate decrease to 5.25% (mortgage payments in Hong Kong are adjustable monthly).
Aside from information flow, nothing of importance happened on the financial markets this past week. The bulls and bears are still pinning the line of confrontation at an unsustainable high valuation. Argentina held its precarious position, soon to be swamped by overwhelmingly powerful force of realism. Amazon held as well, less rather than more well.
The two hard points of the New Economy (J6P consumer spent, and the USD) held more rather than less well. Though some light was shed on the perplexing nature of J6P spending and borrowing, and all seems to be connected strongly to where J6P lives, his home.
msnbc.com
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Refinancing is sustaining spending,but do dangers lurk in the details?
Borrowers take advantage of “cash-out” refinancing
…
I remember we had a discussion on this point on this thread before, and now, one no less than Herr Doctor Grunspunk has spoken up …
prudentbear.com
QUOTE
From the Q&A session of Alan Greenspan’s July 24th Testimony before the Senate Banking, Housing Affairs Committee:
Colorado Senator Wayne Allard: "Chairman Greenspan, I think you would agree with me that housing has played a significant role in our economy historically … elaborate on the trends for housing prices, spending on residential structures, and mortgage interest rates”
Chairman Greenspan: "… occurring … evolution of housing … very sophisticated, complex industry … we’re observing a rather remarkable employment of that so-called home equity wealth in all sorts of household decisions."
Indiana Senator Evan Bayh: "… home price … good thing for the American economy and temporarily helpful in addressing the consumer issue and the current sluggishness. My question to you is … is this a worrisome long-term trend, people drawing down their home equity substantially?"
Chairman Greenspan: "…no evidence (of danger) … despite … significant extraction of home equity gains … fortunately."
UNQUOTE
Mr. Greenbubble is marveling at the financial sophistication of J6P, actively managing his potentially volatile home equity, just like a hedge fund named LTCM. J6P could not manage a stock portfolio without doing harm to himself, but it is now perfectly safe for him to manage his home equity by significantly 'extracting' it, possibly painfully, and place same at the mercy of the active financial market place.
Maurice, please remember that this is the same evil who had earlier quipped that one cannot know a bubble is happening until it has blown up.
Comrade Greenspew is now hinting of yet another FED rate decrease, so that more refinancing and extraction of home equity can be done, until it cannot be done any more. The J6P must be led to defend the bubble economy to the last dime of his equity, until he cannot anymore. New Economy is dead (cash is trash, and profit is proforma). New Economics is still alive (borrow and spend, then borrow again). It is hoped that the economy will turn the U-p before J6P has committed financial suicide.
Be still. The flame of hope just flickered again.
Are you still there, Maurice?
Chugs, Jay |
