On Sep 19, 4:37 pm, "Elizabeth Richardson" <erich...[at]worldnet.att.netwrote:
- quote -

But it will come yet again!

Anoop

"Sgt.Sausage" <nobody[at]nowhere.com> wrote in message
news:90ec5$46f1a735$42a1e6fa$29235[at]FUSE.NET...
- quote -

I suspect it's come and gone.

Elizabeth Richardson

"joetaxpayer" <joetaxpayer[at]nospam.com> wrote in message
news:UJudnYqXNOijrG3bnZ2dnUVZ_ramnZ2d[at]comcast.com...
- quote -


To be fair -- you're correct. I'm still on the
sidelines and haven't bought back in yet.

The great "everything's on sale, buy now" opportunity
has yet to show itself.

- quote -

That is, indeed the question of the day, is it not?

joetaxpayer wrote:

- quote -

The above was just a month ago, 8/17. Today we closed at 1519.77, up
9.8% from the November average cited above. Those who sold at the top
1555.9 on July 16th, were spared the two month drop of 2.3%, but so
what? When will they get back in?
JOE

Sgt.Sausage wrote:

- quote -

Well, November was low/1361 high /1408 on the S&P so I if assume the
average, you were out at 1384. Today we are at 1446, or 4.5% higher. No
major damage, you got nearly 3.5% in cash during that time. The real
question is this: how will you know when to get back in? A couple more
wild upside days and you may have sat out 5% or 6%. I guess the term
expert is relative, because while I don't claim to be one, I do believe
timing is folly, if only because you need to be right twice, both on the
sell and subsequent buy. Now, the Elaine Garzarellis may call a crash,
once, and then go on to underperform the market for the rest of their
careers. If she's an expect, count me out. I'll stick with the index
funds, no in and out, and outperform 80-90% of my fellow investors if
only because they never seem to learn their lesson.

JOE

Sgt.Sausage wrote:

- quote -

This is why the "experts" say that market timing is folly. Despite
recent pressure, the market is still at least 400 points above where it
was back in November (on the Dow - depending on where you got out). Of
course, it could still go lower...

-Will

"Sgt.Sausage" <nobody[at]nowhere.com> wrote
- quote -

that argue for a stock being a good buy "timing," but I
think this is an abuse of the more usual meaning of the
word. You're calling Ben Graham's approach "timing" after
all. He pillories the concept in his books.

- quote -

Which is another reason why I hesitate to call my approach
timing: I am not trying to guess at a bottom. I am looking
for certain company fundamentals hitting certain threshholds
(sp.? for the Post-O cops). If it goes lower oh well. I am
waiting, the way people waited when they bought in late fall
1987. Not that there's still much with promise out there at
this point.

"Douglas Johnson" <post[at]classtech.com> wrote in message
news:ltm1c39rtua060f3hi5puiu574idu24n4o[at]4ax.com...

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Innumeracy: a lot of folks are literate enough to read about it,
but not numerate enough to understand the numbers -- and yeah. It's
a big problem.

"Elle" <honda.lioness[at]nospam.earthlink.net> wrote in message
news:13c1j1e4tpsg4bc[at]corp.supernews.com...

- quote -

And the "experts" say market timing is folly. <grin
I, too, will be anxiously waiting ... itchy-trigger-finger
and all that -- hovering over the "BUY!" button. The real
question, and I wish I had the proverbial CrystalBall(tm)
is: "How low will it go -- and when to buy back in!"

I've been 88% cash and treasuries since last November.
I was expecting things to go all squirrelly quickly after
the elections. I was 'bout 8 months early.

Now I'm waiting on the sidelines trying to
guess when it will all bottom out.

On Aug 14, 2:42 pm, Beliavsky <beliav...[at]aol.com> wrote:
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Hmm. 1 billion = 1000 million. Sounds like alot. However, 1 billion
ain't squat. That's 3.33 per person living in the US. But it's still
too much. Here's why:

If I opted for an ARM, I saved money, no?
If I didn't, I paid too much, no?
If I paid too much already, certainly I don't need to pay any more,
correct?
If I took out an ARM and I get a bial-out, I will pay back the
difference, no?
Certainly, I can expect payback when Fred sells his home?


======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding. "Trim" means that except for a FEW lines to add context, the previous post is deleted.

On Aug 11, 3:59 am, Bucky <uw_badg...[at]email.com> wrote:
- quote -

If Hillary Clinton becomes president, taxpayers may be making some of
the mortgage payments of delinquent sub-prime borrowers. Her blog
http://www.hillaryclinton.com/feature/mortgage/?sc=8 says she would

"Establish a $1 billion fund to assist state programs that help at-
risk borrowers avoid foreclosure. Hillary will establish a $1 billion
fund to support state programs that help at-risk borrowers avoid
foreclosure. Some state programs help borrowers make the single
payment necessary to become current on their loans others help
borrowers renegotiate their loan terms, or simply provide financial
counseling. These foreclosure mitigation efforts are more important
than ever right now. Federal assistance for state programs that assist
at-risk borrowers supplements Hillary's call earlier in the year for
"foreclosure timeout."

A foreclosure timeout breaks the mortgage contract and encourages
people to be deadbeats. This is a sure-fire way to scare away real
estate lenders and raise mortgage interest rates for everyone.

joetaxpayer <joetaxpayer[at]nospam.com> wrote:


- quote -

I am absolutely agreeing with her. It happens fairly often.
-- Doug

On Aug 11, 12:59 am, Bucky <uw_badg...[at]email.com> wrote:
- quote -

Securities are supposed to be somewhat secure. When a significant
slice of the securities market turns out to be shaky, the vibrations
wobble the entire system.

It appears that the US economy "printed" a trillion USD with rapidly
inflating home prices and creative mortgages. It turned out to be
this century's version of a Ponzi scheme of escalating value that was
supposed to be underwritten by future escalating value until everyone
realizes that it cannot work.

Here is a simple way to look at it....

Houses doubled in value in CA, AZ, NV, WA, and OR between 1995 and
2005. Did the wage earners wages double? No. How do you expect them
to pay for the houses? Answer: they really cannot after the first few
years of their exotic mortgages fade away and they have to pay for the
inflated cost of the house and for the money they borrowed. The
entire industry, homebuilders, bankers, etc essentially printed a
trillion dollars based on the belief that people will always find a
way to pay their mortgage. They convinced everyone that since the
housing stock in Detroit and Buffalo was actually losing value the
market must be doing its job. But upon a little inspection you will
see that the "loss" in Buffalo was perhaps one-fiftieth of the "gain"
in Phoenix or Las Vegas or Seattle.

When a trillion dollars of US securities simply goes away it does
shake the worldwide faith in the financial system.

The idea that houses will always go up and up and up in value is sheer
nonsense. The people who live in those houses have to be paid enough
to make the mortgage payment. Right?

Two people gain their CEO positions. One supresses wages and the
other inflates the cost of a house. Does this seemable workable in
the long term? The other CEO of the mortgage provider sharpens his or
her pencil and creates creative mortgages. Eventually they all three
butt heads and the unfortunate result is the realization that a person
or persons earning 80K can afford a 200K house because that is 2.5
times their annual earnings. They cannot afford a 400K house in a hot
area because of smoke and mirrors.

joetaxpayer wrote:
- quote -

No doubt. You know, an acquaintance and I each bought a house when
t-bills were that low. He recommended getting an ARM. I thought he was
crazy, why would I get an ARM when I could lock in 30 year rates that
were REALLY low? His reply was that interest rates had been nothing but
going down, so the ARM was a good bet. Indeed they had, but how much
lower could rates go? Would the banks soon be paying me for taking a
loan? He got an ARM, I got a 30-year fixed. And he's a professional
economist in, get this, the credit industry. I wonder how he's liking
his ARM now? It may not have adjusted yet (this occurred in 2003), so
he may have already, or he might soon, refinance at a reasonable rate.

-Will

Douglas Johnson wrote:

- quote -

Not that Elle needs me to come to her defense. But you realize you
quoted her out of context. She was quoting the misguided thoughts of
those who took the ARMs, so in effect, you are agreeing with her. Where
were we all to point out the ARM insanity when the t-bill was at 1%, and
had nowhere to go but up. That 5/1 ARM you cite may not be wise, but
it's short of insane.
JOE

"Elle" <honda.lioness[at]nospam.earthlink.net> wrote:

- quote -

ARMs are insane when the yield curve is as flat as it is. I just checked
bankrate.com and it shows a 30yr fixed at 6.24% and a 5/1 ARM at 6.07%. The
borrower is taking on a lot of risk and not getting paid very well for taking
it.

More of the financial illiteracy we have discussed in the past.

-- Doug

"Douglas Johnson" <post[at]classtech.com> wrote
- quote -

No, I don't think this is the sort of sound bite that
captures what was behind this correction/panic. Computer
modelling evidently was different, but I do not exactly
fault it.

The following seems a good explanation of some of this:
http://www.nytimes.com/imagepages/20...N_GRAPHIC.html

See the other link I posted here for the whole kitten
kaboodle. I buy it. In short, too much credit to the
unqualified masses and we get a panic. I do not think the
panic is exactly justified. I do, however, welcome the
correction.

- quote -

I think it was a faction of the financial sector (investment
banks, broker etc.) that knew they could offer loans to
poorly qualified folks/businesses and either (1) make out
like bandits for the long run, based on fairly rational
expected rates of default (many industries use past behavior
of consumers to justify expectations; I don't at all
entirely fault the use of history when running a business);
and or (2) make out like bandits for the short run, even if
they destroyed the U.S. and world economies for a while.

See the S&L crisis of the 1980s.

I find it rather profound that a mass of such "little
people" (with individual mortgages) defaulting on their
ill-gained (for whatever reason) interest only, adjustable
rate, blah blah, "ooh, we can have a house just like the
Joneses, even it it's way cheaper to rent!" mortgages
affected major hedge funds and so much more wealthy folks.
Remember the mortgage debts, through some serious ;-)
leger-de-main, eventually landed in such funds, luring
investors with the promise of great income, for one. Said
investors being as uh, ill-informed, as the "little people,"
but having way more money to throw away in one fell swoop.

It has become way too fashionable to trust what the masses
in the U.S. do. Everyone seemed to be getting an ARM
starting a few years ago, so it must be all right. How many
times have I heard that idiot cliché about, "We only plan to
be in this house a few years, so an ARM or interest only
mortgage makes sense." No, given the few year timeframe,
renting is far lower risk and made far more sense.

It's this misplaced trust that interest only and ARMs were
"okay," rippling through the markets as described in the AP
article I linked in this thread, that led to this
correction.

And yet, it is a needed correction. It will tend to plant
people's feet back on the ground. Well, the smart ones who
learn and read more. Or it will throw out stock carcasses
for vultures like me to hover over, then swoop down and pick
on and so allow me to make a bit more profit than expected
in the coming years.

An excellent explanation from the Associated Press on August
12:

The latest crisis in financial markets has once again served
as a reminder of how vital and interconnected the health of
the U.S. economy is to that of the rest of the world.

- quote -

with their mortgage payments and the ripple effects that
could have on the global banking and financial system.

The fallout could further depress U.S. housing prices by
making it harder to find buyers for a glut of foreclosed
homes. That, coupled with a drop in the value of
investments, could leave U.S. consumers feeling poorer and
less likely to spend on domestic and imported goods.

''The sharp falls in global stock markets obviously affect
consumer wealth, which again could dampen spending,'' said
Howard Archer, chief British and European economist at
Global Insight.

The most immediate effect for the half of all American
households who own mutual funds and other individual
investors worldwide is a decline in the value of their
investments, which may or may not be short-lived.

Around the globe, small-time investors are taking a beating.
Stock prices have slid in recent days as fears of the market
crisis infected markets worldwide. Worried investors sold
stocks but finding buyers was hard, which caused share
prices to dip even lower.

The distress in the markets makes it harder and more
expensive for businesses and consumers to get loans and
cash, Archer said. If companies cannot get loans, they
cannot expand and may have to cut expenses, typically
through layoffs.

America faced a crisis similar to the current mortgage
fiasco when hundreds of savings and loan companies went
belly-up in the 1980s. Back then, the fallout did not spread
dramatically to foreign shores because the U.S. government
stepped in to bail out the banks and repay depositors.

But the past two decades have seen a quantum leap in
globalization and outsourcing, crumbling trade barriers, and
a revolution in financial markets have knit the world
tightly together.

A steep sell-off in global markets on Thursday and Friday
was triggered by distress signals from France's biggest
bank, BNP Paribas, which had to freeze billions of dollars
in assets in three mutual funds because of the falling value
of securities linked to high-risk mortgages taken out by
U.S. borrowers.
...
More Americans are failing to keep up with their home
mortgage payments, and there are concerns that this could
ripple around the globe because much of the debt from
mortgages has been packaged into securities sold to pension
funds, banks and other investors who were hungry for high
returns on investments.

The same mortgage securities in the U.S. that are crumbling
in value are a part of bigger holdings that banks from Japan
to Germany bought into because of low U.S. interest rates
and a good returns. That is, until the mortgage holders
started defaulting.

For rest, see
http://www.nytimes.com/aponline/worl...Contagion.html

joetaxpayer <joetaxpayer[at]nospam.com> wrote:

- quote -

At least one more is that between fancy computer modeling and ratings agencies
that did not do their job, much of the paper got rated AAA when it should be C
or less.

The computer modeling said something to the effect of "based on history, these
mortgages will default at such-and-such a rate and will recover such-and-such a
percent of the value in foreclosure." The ratings agencies said something to
the effect of "the model means that the paper has such-and-such chance of loss,
so the paper is AAA rated".

Bah. Elle could have told them that past performance does not guarantee future
performance. Especially when the loans underlying the paper were far shakier
than the loans made in the past.

-- Doug

Somebody bought 3/4ths trillion of bad mortgage paper (CDOs).
Its not exactly sure who all these somebodies were: five hedge
funds, a French bank, and German bank went belly-up recently.
Could your favorite pension fund, bank or mutual fund have some of
these? Seems like a global mystery game of "CLUE" at the moment.