Hello Pezz, Early Morning Report:
(a) Got the Coconut dressed for school, a mish mesh of her favorite pieces meticulously selected within the span of a dozen seconds or so, purple cords, white shirt, green sweater, laddybug socks, favorite sneakers, and a tip of the hat to fashion, a Burberry poncho, all for some sort of a Christmas party day at school;
(b) Eventually heading into office for a light day of puttering around, admin day, interrupted by lunch with friends and dinner with friends;
(c) Ought to receive today the 5th of my nine monthly checks to exit a poor private equity idea and when so, I give my 5th thanks of the year;
(d) Now at monitor, having just noticed that all them currencies I sold went down against the USD, more so than the gold I bought, and the CAD I held is holding against the USD. So far, so good.
(e) Reflected on the state of USA real estate, and am alarmed, realizing that we are only just about 5% into the new era of downward repricing. Am also thankful that I had sold back in April of 2006 and had turned the proceeds into Euro, AUD, CAD and paper gold, and then turned the Euro to CHF, and AUD to Yen, and then everything from everything except CAD to USD, hesitated, got paper gold back.
All is well that ends well.
Advise - wait before you get a place in Santa Monica.
Chugs, TJ
P.S. much to give thanks for 2007.
<<What'cha gonna do IF there is no collaps?>> ... everything had, is and will collapse against gold.
From e-mail tray,
From the Herb Greenberg piece:
blogs.marketwatch.com
>>Now, with all the exotic programs gone, a household income of $175,000 is needed to buy that same home, which is about 10% of the Bay Area households. And, inventories are up 500%. So, in a nutshell we have 90% fewer qualified buyers for five-times the number of homes. To get housing moving again in Northern California, either all the exotic programs must come back, everyone must get a 100% raise or home prices have to fall 50%. None, except the last sound remotely possible.
Assuming Fed is interested in preventing significant bank failures above all else:
1. Not good for banks if asset backing their loans decreases in value by 50%.
2. Desire then is not to see value of the collateral drop.
3. Assuming a price decrease of 50% in real terms for housing, an inflation rate of 12% over 5 years would make that up; that is would reduce $100k to $52K at the end of the 5 year period in constant dollars... so essentially you would get no appreciation in housing values, everything else would catch up in price... and the banks collateral value would be protected.
Is this in effect what is being engineered now?
This would fit with Bernake's reticence in congressional testimony. He cant really come out and say this can he? "We are going to sacrifice the value of your currency to protect our stockholders assets and solvency (the banks).".
This seems to be the road we are on, and would explain the MO, and the path ahead. |
