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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: SouthFloridaGuy who wrote (105004)	11/29/2009 12:09:35 PM
From: Jim McMannis	4 Recommendations Respond to of 116555

RE:"That's why real estate is recovering in a big way in the prime areas much to the astonishment of the bears" What prime areas are those? I bet a lot of it is due to TARP (NYC area) and first time home buyer tax breaks plus some speculators. So the whole idea of a bottom in housing is fleeting and tenuous at best. Most corrections have at least 3 waves and $billions of tarps and tax breaks have the housing market in the "b" wave. IMHO. Alt-A resets should turn it back down next year.

To: SouthFloridaGuy who wrote (105004)	11/29/2009 1:35:01 PM
From: mishedlo	8 Recommendations Respond to of 116555

I do not have time any more to correct your errors. I was not nor was Sitka bearish at 666. Moreover, Sitka was long 6 weeks starting the last week in March 2008, went market neutral, then In November of 2008 removed all hedges in Absolute Return, Went fully hedged on Jan 6, and removed all hedges on March 6. Yes, we did put them back way too early, scaling in near 850-900 and we are fully hedged now. Without ever being net short here or using leverage, here is a chart of our performance. sitkapacific.com Yes Hedged Growth, a long-short strategy has not done well this year, but that is because poor quality stocks have led every rally this year. When that stops, and it will, I expect Hedged Growth to make money regardless of market direction as it has done since inception. sitkapacific.com The two, three, and 4 year track records of those strategies is extremely good. The one, two, three, and 4 year track record of Absolute Return is phenomenal. Meanwhile you lord it all over me about fiduciary duty. Given that you "oversee several billion in institutional assets" then point me to some charts where you post your performance, good, bad, or indifferent like we do. If it's good, the congratulations, especially if you avoided 2008. But as I said above, I do not have the time nor the energy to correct your nonsense. You can have a much deserved time out. By the way, only a complete fool would use someone who they claim is always bearish as a contrarian indicator. Mish

To: SouthFloridaGuy who wrote (105004)	11/29/2009 4:51:03 PM
From: Jim McMannis	1 Recommendation Respond to of 116555

Housing Bottom? "Not Even Close finance.yahoo.com fifth-straight monthly gain for the Case-Shiller Index Tuesday and Monday's stronger-than-expected existing home sales report is giving renewed hope to the housing bulls. "Disregard them," says Barry Ritholtz, CEO of Fusion IQ, who notes the existing home sales number was juiced by sales of cheap condos and various government programs. Meanwhile, the Case-Shiller results were below expectations. We are "not even close" to a bottom in housing, says Ritholtz, who estimates national house prices remain 15-20% overvalued, based on the traditional metrics of: median income-to-median sales price, the cost of owning vs. renting, and housing stock as a percent of GDP. "Until we start seeing a healthy housing market that can stand on its own, without government props, without distressed properties selling 60% off peak levels - that's how you know the bottom is in," says the blogger and Bailout Nation author. (Full disclosure: I edited Ritholtz's book and was paid for my contributions.) The likely best-case-scenario for housing is several years of sideways action for prices, wherein population growth and a firmer economy combine to sop up the still huge inventory of homes on the market. "And that's if we're lucky," Ritholtz says, citing the lackluster environment for jobs and wages, as well as CoreLogic's analysis that 23% of all U.S. mortgage holders are under water, as reported in The WSJ. With so many Americans owing more money than their homes are worth, the recent rise in foreclosures and so-called jingle mail is "not nearly done," he warns. In sum, expect more homes for sale at distressed prices and more downward pressure on prices overall -- unless the "real" economy shows dramatic improvement, which Ritholtz doesn't see anytime soon,

To: SouthFloridaGuy who wrote (105004)	11/30/2009 11:32:19 AM
From: Jim McMannis	Respond to of 116555

Case Shiller 40-45% Decline from here. The 10 major cities in the Standard & Poor’s/Case-Shiller home price index have risen 5% from their April low, but the index is still predicting a massive 45% fall from today’s values. blog.ml-implode.com The index is still showing a current loss of 30% from the high in June 2006. Based upon a trend generated from the actual prices of 1987 to 1997, and generated forward in a linear projection, the index will fall a total of 62% before it reaches the trend norm. A more comprehensive analysis of the 10-city index based upon a full 120 years of data shows current values off 36% and a comparatively modest 20% fall ahead.

To: SouthFloridaGuy who wrote (105004)	11/30/2009 2:29:09 PM
From: NOW	Respond to of 116555

"One of the fascinating aspects of the past few months is the lack of equilibrium thinking with respect to what happened to the trillions of dollars in government money that has been spent to defend the bondholders of mismanaged financial companies. Almost by definition, money given to corporations will show up most quickly as improvements in corporate earnings, and then slightly later, as executive compensation. A few pieces came across my desk last week, hailing the ability of the corporate sector to bounce back from the recent economic downturn even though revenues have continued to suffer and employment has been steeply cut. Why is this a surprise? Where else could the money have gone? Labor compensation? It is truly mind-numbing that a moment after a temporary surge of trillions of dollars, borrowed and tossed out of a helicopter (though to specific corporations and private beneficiaries), analysts would hail a subsequent improvement in corporate results as evidence of “resilience.” What matters is sustainability, and unfortunately, it is clear that credit continues to collapse. Banks are contracting their loan portfolios at a record rate, according to the latest FDIC Quarterly Banking Profile. Even so, new delinquencies continue to accelerate faster than loan loss reserves. Tier 1 capital looked quite good last quarter, as one would expect from the combination of a large new issuance of bank securities, combined with an easing of accounting rules to allow “substantial discretion” with respect to credit losses. The list of problem institutions is still rising exponentially. Overall, earnings and capital ratios have enjoyed a reprieve in the past couple of quarters, but delinquencies have not, and all evidence points to an acceleration as we move into 2010." Hussman