re: [all part of the wall of worry.....the markets just
getting started.....gonna make the 90.s look like childs
play.....theres an army of bear market experts out there now....]
Hey Chief,
I think we'll have to agree to disagree...
How can there be "an army of bear market experts,"
let alone a "wall of worry," with sentiment and bullish
option activity at near all time highs - literally, only
comparable with the March 2000 NASDAQ bubble highs?
The only real, present positive catalyst I see
for the broad market, is that it may benefit over the
next few months from the rotation of money out of bonds
and into stocks.
The banks were handed $12-$14 trillion and used part of those
funds to lever up and front run the market prop job.
And Obama's stimulus spending was back end loaded to create
a push, or more accurately a putsch, into the Nov. 2010 elections,
a factoid that went pretty much unreported by the mainstream,
monopoly press.
Consumer spending remains 67% of U.S. GDP and there
is "negative" credit growth, still rising unemployment,
still rising mortgage delinquencies with a tsunami
of foreclosures being hidden in the pipeline, and bubbles
in commercial, rental, and multi-family real estate just
now starting to collapse. Not to mention state and local
governments falling like dominos, along with both a public
and private pension crisis unfolding, with the PBGC and the
FDIC both broke.
As far as the recently hyped retail spending numbers,
those were the easiest comps to beat since the 911
attacks. Q1 last year was when the markets were crashing
and gloom and doom was actually dominating the headlines.
CRE faces massive financing rollovers with a high percentage
of those properties now in negative equity, with Fed
regulators pressuring banks to call in these loans,
and with still rising delinquencies in commercial real
estate, rental properties, and multi-family properties.
Delinquencies for Commercial Mortgage Backed securities
just hit an all time high, up +326% year over year...
economicsjunkie.com
"... the delinquent unpaid balance for CMBS increased by
another $4.3 billion, up to $45.94 billion from $41.64 billion
a month prior. The overall delinquent unpaid balance is up
326% from one-year ago (when only $10.79 billion of delinquent
unpaid balance was reported for January 2009), and is now over
20 times the low point of $2.21 billion in March 2007.
The distressed 90+-day, Foreclosure and REO categories grew
in aggregate for the 25th straight month – up by $7.42 billion
(28%) from the previous month and over $27.95 billion (508%)
in the past year (up from only $5.51 billion in January 2009).
This included a substantial jump in 90+-day delinquency in
January 2010."
Here's more reality: The when, not if, CRE collapse may
threaten the entire banking system:
cop.senate.gov
"Over the next few years, a wave of commercial real estate loan
failures could threaten America’s already-weakened financial
system. The Congressional Oversight Panel is deeply concerned
that commercial loan losses could jeopardize the stability of
many banks, particularly the nation’s mid-size and smaller
banks, and that as the damage spreads beyond individual banks
that it will contribute to prolonged weakness throughout the
economy.
Between 2010 and 2014, about $1.4 trillion in commercial real
estate loans will reach the end of their terms. Nearly half
are at present “underwater” – that is, the borrower owes more
than the underlying property is currently worth. Commercial
property values have fallen more than 40 percent since the
beginning of 2007. Increased vacancy rates, which now range
from eight percent for multifamily housing to 18 percent for
office buildings, and falling rents, which have declined 40
percent for office space and 33 percent for retail space, have
exerted a powerful downward pressure on the value of
commercial properties.
The largest commercial real estate loan losses are projected
for 2011 and beyond; losses at banks alone could range as high
as $200-$300 billion. The stress tests conducted last year for
19 major financial institutions examined their capital
reserves only through the end of 2010.
Even more significantly, small and mid-sized banks were never
subjected to any exercise comparable to the stress tests,
despite the fact that small and mid-sized banks are
proportionately even more exposed than their larger
counterparts to commercial real estate loan losses.
A significant wave of commercial mortgage defaults would
trigger economic damage that could touch the lives of nearly
every American. Empty office complexes, hotels, and retail
stores could lead directly to lost jobs. Foreclosures on
apartment complexes could push families out of their
residences, even if they had never missed a rent payment.
Banks that suffer, or are afraid of suffering, commercial
mortgage losses could grow even more reluctant to lend, which
could in turn further reduce access to credit for more
businesses and families and accelerate a negative economic
cycle."
=====================
And this, on the collapsing "multi-family" housing market...
ihs.depaul.edu
Not to mention that 8% of all mortgages nationwide are
now delinquent, with some markets like Florida, still
"off the charts" with a 19%+ 90-day deliquency rate,
two years after the crash...
tampabay.com
And the NFIB just reported that small business owner sentiment
is at lows never before seen, with 18 consecutive months of
negative readings and a new 8 month low.
NFIB Small Business Confidence Drops To 8 Month Lows...
nfib.com
The NFIB Small Business Optimism index came in at 86.8, a
decline from the March's read. As the NFIB itself confirms:
"The persistence of index readings below 90 is unprecedented
in survey history. “
So we have ....
-- no jobs, with still rising unemployment rates and 33 states
with unemployment benefit funds now broke.
- millions of unemployed about to fall off the Federal extended
unemployment benefits roles.
- 39 million Americans on food stamps.
-- negative bank credit creation/growth (in a credit based economy).
-- still collapsing housing & mortgage markets with record delinquency rates.
-- commercial real estate, rental, and multi-family RE collapses still to come.
-- state and local governments facing nuclear budget meltdowns
with many states like NJ, now making massive layoffs and cutbacks.
-- rising state and local taxes: from income taxes, to property taxes,
to sales taxes, to excise taxes, to sin taxes.
-- and on the federal level: rising income taxes, capital gains
taxes, Cadillac health plan taxes, and a proposed VAT, or
national sales tax waiting in the wings.
-- and the death blow, also known as "cap and trade" carbon taxes,
also waiting in the wings.
As far as the broad markets... the rotation out of the
bond market may fuel yet another leg up in the equities
markets, as may continued competitive currency devaluation,
as may future continuations of monetization and quantitative
easing. But then the question becomes - what do you own -
paper (stocks & bonds), or hard assets (gold & commodities)?
A question which I believe has already been answered:
However...
Gold and hard assets are not a guaranteed ticket to prosperity.
Remember, the international bankers make their greatest
fortunes during deflation, not inflation.
And the global central banks have just finished creating
literally tens of trillions of dollars, and have given all
the newly created money to themselves.
So riddle me this...
Do you think they'll inflate and destroy the value of the
money they just created and gave to themselves, or do you
think they'll pull the plug, and crash the whole house of
cards, and then use their age old, problem-crisis-solution,
Hegelian Dialectic to bring in global governance, and the
new global currency regime the G-20 is already calling for...
while using the trillions of dollars they just created out of
thin air and gave to themselves, to buy up the assets and
the key infrastructure of distressed nations at pennies on
the dollar?
Quit thinking like a rational, decent, human being who
cares about humanity, and start thinking like an atheistic,
control freak, predatory psychopath.
SOTB |
