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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (31111)	4/21/2012 11:09:51 AM
From: robert b furman	3 Recommendations Read Replies (1) \| Respond to of 224353

Hi Hawk, Several positive themes. The TBTF banks have grown capital and created huge reserves.Reserves that have not been written down much over the years. As the loans and their problems (foreclosures) get worked out - slowly being sold to investors ats reduced price and these are being converted into rental properties.This is the originally desired solution occurring. It is the private sector buying the sliced and diced collateralized securities at a market value.It is buying the collateral not the security.This is a longer evolving solution and it is not immediately clear to most. In 2008 every one wanted the fast and quick approach of selling the impossible to understand collateralized security.It couldn'e be done -so the failed collateral is now being handled - a much slower and yet extremely efficient process. IT IS HOWEVER THE PRIVATE SECTOR BUYING UP AND ELIMINATING THE PROBLEM. As the private sector handles the exceptional problem foreclosure - TBTF banks are still sitting on the huge reserves they did not pay taxes on. This will begin this year by becoming earnings and you'll see the toxic XFL benefit hugely - in fact it is the boost that indices will need to make new highs For those who make their payments and stay in their house - it has a happy ending.Their homes will appreciate in value once the excess supply is absorbed by the private sector. I saw this happen with auto's in 2008.Excess production flooded the used vehicle marktets.Once the unions were busted back (eliminated the Jobs bank program via bankruptcy) - which also saved Ford ,who had previously outsourced far more production away from the union and outside of the UAW/US. Since the excess was absorbed, used vehicles have become much more expensive and so too have new vehicles. With a longer time lag this will repeat in housing! Secondly, A huge wealth driver is occurring with in our borders - it is related to the commodity explosion. This explosion has created funding for the further exploration of both Natural Gas and Liquids / sweet oil. The new technology of fracking is developing huge wealth with in our borders - not only to the ceators of the technology but also to the land owners who pump gas and oil liquids out of their land. Additionally we have become the refiners of the world. Natural gas has given the USA an economic advantgae to cheap- electricity and chemical processing.This will give us a long term increase in high paying jobs and it is alive and well and gettiing bigger and better every year. We need to get government out of business and let entrpreneurial efforts blossom. These are big MEGA TRENDS that will bolster fundamental corporate profits. As for GZ's worry of the market - I say these trends are not well understood - but DO NOT BET AGAINST THEM - at least not in the long run. From what I see in longer term charts when an indice gets to a new high - one should expect, it to top,back test down to the past high level and prove out that the market is ready for showing that past resistance now becomes support. Bob