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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (48465)	12/30/2005 1:08:23 PM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Fri Dec 30 2005 12:57 trotsky (Waliac, 10:17) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved this is worth a repost: "I heard some professor on a radio show yesterday make an interesting point that the fear of knowing that your converstaion might be being listened to or recorded does in itself change the way people communicate between each other, thereby replacing the free flow of ideas necessary in our society with something more akin to paranoia. His point being that even the threat of roving wiretaps changes the fabric of our society. I thought it an interesting hypothesis." i think it's not just a hypothesis - it's a fact. the damage done by this naziesque administration is incalculable, due to the many unseen effects of its actions, such as the one described above. Date: Fri Dec 30 2005 11:56 trotsky (@housing) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved what is actually the proper contrarian stance toward housing considering all the sentiment evidence? there are imo two possibilities, but it's easier to state what will NOT happen than what WILL happen. what will NOT happen is what seemingly EVERYBODY currently expects. even, apparently, Bill Cara. this is the so-called 'soft landing' scenario, in which the bubble smoothly transitions into a benign slowdown, prices stay flat, and no damage is done. this leaves only two potential resolutions. 1. the housing bubble reaccelerates and defies the bears again. what is favoring this possibility? mainly the still large short positions and large put/call open interest ratios in homebuilder stocks, and the outlook for falling interest rates. 2. the bubble does what all bubbles do after they have peaked, it pops spectacularly. this scenario is favored by the utter complacency that informs commentary on the recent rise in inventories and the sharp slowdown in transactions in the bubble regions. a little understood fact of bubblology is that parabolic asset price appreciation bubbles supported by a credit expansion MUST continue to expand ever faster in order to be sustained. this is because the credit expansion can only continue if the value of the collateral keeps increasing. since new buying requires fresh credit, it won't do when prices stall. the biggest problem the 'soft landing' scenario faces is the overhang of inventory in the hands of speculators. this inventory is likely 90% debt financed. over the past two years, estimates of speculative activity range from 25-34% of all transactions in residential real estate, and the spec participation is positively staggering in condo developments in hot markets such as Florida ( estimate for Miami: 90% of condos have been bought for speculative purposes ) . since debt financed residential real estate has a negative carry at current inflated prices ( i.e. it costs a lot more to service the debt, pay property taxes and upkeep , than can possibly be earned vie letting the properties out ) , speculators can not AFFORD to wait out a softening of the market. they must meet a magin call, so to speak. and this is why no soft landing will happen. we'll either get a reacceleration, followed by an even bigger bust ( since a reacceleration of the bubble would keep the Fed on the hiking path ) , or the bust has already begun. Date: Fri Dec 30 2005 11:28 trotsky (@MNG) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved with MNG climbing to new highs for the year on this last trading day, a brief comment on it: Hambone mentioned yesterday that there's a 'NEM takeover risk' in the stock, and that's certainly true. NEM looks for new reserves in politically stable regions, and MNG fits this bill. it also fits the bill in other respects. namely, the Hope Bay belt represents an entire gold system, that will likely support multiple mining operations. one of the 'risks' of being out is that the ongoing drilling could at any moment produce more stunning results, similar to the step-out drill hole that started this rally back in June ( about 10 g/ton over 66 metres ) . with the company now cashed up via NEM's infusion, lots of additional drill results can be expected to come forward in the course of next year. the permitting delay regarding Doris North is probably not indicative of a big problem - judging from the relevant press releases there is no opposition to the mine in principle, it was more a matter of ironing out some details. it probably remains a buy on pullbacks, with the usual caveats ( PoG needs to stay firm, sentiment toward the sector positive, etc. ) . Date: Fri Dec 30 2005 11:08 trotsky (@TGB earnings) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved well, once again a scorcher of a quarter, demonstrating the company's leverage to the price of copper. however, it should be clear to everyone that Gibraltar is one of the highest cost mines in the industry. it's the type of mine that the majors mothball during depressed copper price periods. so what is urgently needed is an onsite smelter, in order to defray costs. look for TGB to raise capital next year to build the smelter. Date: Fri Dec 30 2005 10:54 trotsky (@Irving Kahn) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved 100-year old Irving Kahn, who's still at the NYSE every day, was just interviewed on TV. Q: "what was it like on the day of the crash of 1929?" A: " i had the good fortune of being short Anaconda copper....they told me , boy you're gonna lose your money, i only had 300 dollars, but it sure went down." Q:"so you're saying, find the right people, the successful ones, and try to learn from them?" A: "that's right...do what they're doing, but also find out WHY they're doing so well...limit risk, and often you will find that they don't take on any debt.."

To: ild who wrote (48465)	12/30/2005 1:34:50 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 110194

Ild, I don't know the answer and I don't know if there is an answer. Defaults are usually defined as the second stage of delinquency - default - foreclosure. "Default", in other words, is when the notice of default is filed. While you may have exact times for the obvious, such as 30 days, 60 days delinquent, notice of defaults have no set time. Up till now, I am guessing that many delinquencies are cured via sale or refinance so they never move into the default stage. That is why I am somewhat "disappointed" to see the a stable default for Nov in the MICA data. Ramsey