John Pitera's Market Laboratory Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : John Pitera's Market Laboratory

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: ajtj99 who wrote (9843)	8/17/2008 4:02:56 PM
From: robert b furman	Read Replies (4) of 33421

Hi ajtj, Have to take the other side of lower energy costs: "The recent drop in fuel costs only means the pain will likely be much more harsh later on as lower energy costs will already have been attained, so the consumer will not see relief there when they need it most." With lower energy costs comes the relief - it will usher in the relief - on an after tax basis - the most effective. Every penny of gas is a reduction in the most crippling tax Americans have endured. It is an instant relief and purchasing power is restored. The housing problem has been over killed. The banks will all take the same tonic that Merrill took. Twenty two cents on the dollar. Write it off -get over it, and wait for the actual payments to show that writeups will be appropriate in the future. What a concept, people actually stay in their house and pay for it - even if it is below what they paid for it at a top. YES there is over head supply in housing. No it won't recover to peak time periods for 6-10 years from now. People won't quit paying for the roof over their head - they need it and THEY LIKED IT! They still do. Housing is 4.6%of GDP Exports are 11.0 % of GDP Rates are cheap , mortgages are in the mid 6's % - that's still cheap,but it creates a higher yield for the banks. Banks will compete for deposits - another way of creating capital - one that they can leveredge and they'll earn their way out as well. This market is about to quit taking its cod liver oil and it is about to feel better. Those who stick with the Financial devastation armegeddon scenario too long, will miss a great recovery. Europe will now pay the price for less transparentcy and late confessions. USA will pull out and lead as exports being purchased from the still robust emerging markets continue. This is the end of a midcycle correction and collapses seldom stage in an envoronment of low rates and low inventories.The high inventories are concentrated in housing and to a lessor degree autos. Housing will take years, autos will be over by yearend. Tomorrow GM will announce a model year close out initiative that will coincide with large production cuts for Q4. By the inauguration this market will be looking forward and optimistic. Here's a conspiracy plot for you. Did Vladimir Putin stage a Russian aggression in Georgia in an effort to give the US presidential candidates an opportunity to see who has the background and proper response to an international skirmish? Maybe there is honor amongst thieves - ur presidents.Especially when they've already looked into eachother's souls.<smile> We'll watch the political spin on eachothers responses (and how strong each candidate was or wasn't). From my perspective - I agree with Ollie North - it IS A DANGEROUS WORLD OUT THERE. Bob

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next