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Janet Tavakoli "Talks Her Book" And Cashes Out
Some portfolio allocation and market perspectives from Janet Tavakoli:
I just went to (almost) 100% cash in my favorite hedge fund, my personal portfolio. I do not give investment advice, and I rarely discuss my personal portfolio (except with a select few friends), but I am happy to share my thinking on this decision.
On Monday, Austin Goolsbee, one of President Obama’s economic advisors, told The Daily Show’s John Stewart that the large deficit is necessary, TARP backed us away from the brink of disaster, and the stimulus is working. If only words were magic. Many more banks are in trouble, a chunk of housing activity is due to foreclosures/short sales/resales (the $8,000 housing incentive often went for down payments from people who couldn’t scare up one of their own), credit card problems are on the rise, one-quarter to one-third of all mortgages in the U.S. are underwater, the mortgage “modification” program is a failure with only around 200,000 done so far—half of which are already failing (the same fraudsters who got us in this mess are modifying mortgages), 3,000,000 mortgages are in serious default (90 days or more past due), the unemployment picture is grim, the cash-for-clunkers fake auto stimulus is a non-green short-term artificial pump-up, profits seem due to inventory management and cost cutting rather than demand, and industrial production has plummeted (other than military production which is up). More TARP money will be needed for many smaller banks that are in trouble due to current and coming loan losses. The international picture is mixed, but I’ve even liquidated those positions.
The recent stock run-up since March in the U.S. has been lovely. We may see a continuing rally for the coming weeks. As many others have noted, the stock market often rallies ahead of a real improvement in the economy. But after Labor Day, people will come back to work and begin evaluating. I expect a huge downdraft in prices in the next couple of months, which may (or may not) create another buying opportunity.
Tangentially, when is Janet going back to CNBC? We all miss those Janet v Charlie witty and sophisticated debates.
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By cash does she mean US dollars?!?
US dollars and Yen are great if you believe in the deflationary scenario.
If you believe in inflation go for gold, silver or palladium. Copper or oil will also work.... In fact, stocks and real estate are historically some of the best ways to hedge inflation....
Now are you still on the inflation camp???
historically stocks are not a good hedge to inflation.
define hedge.
false. depends on the company/industry but "stocks" as an asset class in & of themselves, yes, are typically an inflation hedge.
I agree. Stocks tend to perform poorly during highly inflationary periods (such as the 1970s). This is because future cash flows accruing to the stock holder are discounted at a higher rate.
TIPS or gold would be much better investments if you are expecting inflation (which I am not, at least in the short to medium term).
I am long bullets, bullion and canned food.
I will use my accumlated dollars as toilet paper, since they will be at par.
I will buy more physical silver under $12, and gold under $900 if I get the chance. Now if I could just find more ammo...damn shortages.
I am long bullets, bullion, canned food and water.
I will use FRN's as toilet paper since they will be at parity soon.
Deflationists are idiots.
USD =/ World Reserve Currency = Currency Collapse = Hyperinflation
"Deflationists are idiots"
WTF? You been in a closet for the last year?
Please explain how the world reserve currency becomes so devalued that hyperinflation ensues.
Sounds like you own more than one home, or are highly levered. Deflation is ripping you. The "idiots" will bury you.
+10
A world reserve currency that can't hold its value isn't going to hold that status forever. I bet the UK believed they would hold the revered status forever as well, but we know how that played out.
So when the US loses its status, it will develop into a currency crisis, which will lead to hyperinflation.
Def's are idiots because they refuse to acknowledge that the global chessboard is changing, wherein the US is no longer the Queen, but rather a knight or a rook.
As for my personal accounts, I'm 50/50 bullion and cash. I live in an apartment, my families savings rate is 40%.
Nice assumption though.
Look at oil as an example. There has been a His message was being spread and gaining even more support...therefore he needed to be censored. Until we have guys like Black back as regulators nothing will change. We just
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
Good luck with that Nathan.
And who exactly will be doing the borrowing?
Well, theoretically hyperinflation could follow the decision of all major central banks to stop using dollar as a reserve currency, in that case all the dollars would go back home and cause hyperinflation, especially coupled with a new money supply created by the Fed.
However, for that to happen those CBs should have an alternative. Do they? Doubt that. Gold? Simply not enough supply to replace all the dollars in circulation. It doesn't mean there will be no inflation, but it's likely gonna be global, not just in the US.
All the dollars 'coming back home' would be another form of stimulus. The stimulus so far is having no effect on current deflation.
The more dollars leaving the 'greater world' for the US would make dollars more scarce there and their (relative) value would increase.
Banks create the greatest amount of dollars not the Fed, which is just another bank, really. Banks other than the Fed aren't lending/creating money.That's why banks are failing, they aren't making enough good loans to offset the loans that are going bad. (Same thing happened in the early/mid 1930's.)
If central banks 'dump' dollars (why?) what would they replace them with? All fiat currencies are essentially the same. Other countries are just as likely to skip out on their loans as are Americans.
There are many reserve currencies; nobody rings a bell and declares the end of the dollar as reserve currency. It would be less sought out as a transfer means by some economies but would still be used by others.
Dollar arb opportunities are too profitable for the dollar to simply disappear. Currency markets are manipulated too. GS can win both long and short the dollar ... and does so.
The commodity value of dollars is irrelevant to the transactional utility of them. Notched pieces of wood can be just as effective as any paper currency for transactions.
There are THREE (not two) uses for currency. a) As a means to facilitate transactions, b) as a store of wealth, and c) as proxies for what the currency can buy. What can euros buy? Yen? Yuan? Dollars buy Hollywood and Disney, the fantasy. (Wall Street, hmmm ...) The other currencies buy grim and unhappy realities.
Yuan is a proxy for China; poisoned dog food and lead painted toys. The dollar buys all this and what the yuan cannot ever buy, F16J's.
The dollar/oil trade sets the limits on relative value of the dollar. Dollar inflation relative to crude would destroy the US economy which imports 60% of its fuel. Get rid of automobiles? Not likely ...
Hyperinflation is unlikely without savings 'fuel' to burn. HI is more likely in China; here it would only happen after everyone is out of assets and into (safe) cash.
BTW, Way to go, Janet Tavakoli!
Well I am gonna swap all my cash to IMF SDR's because they are going to be the new world reserve fiat currency backed by the full faith and credit of the UN!
if you consider that credit contraction + the slowing velocity of money far outweighs what the fed is printing right now I think you have a solid argument for deflation taking hold over the short term. Should either of those stats reverse, then inflation would be more likely....but until then, dont count on it.
"deflationists are idiots"
Good luck with that. The greatest conflagration of credit in the history of mankind is upon us.
If you think we're going to see an increase in credit (money supply) any time soon, then you sir are math-challenged.
Inflationists are typically somewhat educated about the fiat nature of currency, but are almost universally uneducated in regards to the bond market and the composition of the money supply (being largely debt, and not physical/paper-money).
Nathan, I highly recommend you stop reading the well-composed, but hopelessly-ignorant writings of the Daily Reckoning, and start learning the far less-exciting nuts and bolts of credit markets (which your hero, Bill Bonner never had time to learn).
The deflation that is upon us will be devastating to us all -- but mostly to the poor souls who bet the wrong way.
I will leave the hyperinflation camp forever if someone can build for me a convincing case that the U.S. deficits are sustainable in an environment of persistent deflation and the U.S. will not default. Business and consumer defaults = decrease in business activity with subsequent loss of tax revenues, accompanied by increasing demands for saftety net services. While we try to support:
Last I checked, for FY2009 tax receipts were running behind the combined costs of just mandatory federal expenditures, DOD, and interest costs. Persistent deflation springs the debt trap.
http://seekingalpha.com/article/147420-dear-world-please-stop-lending-th...
Sovereign default = hyperinflation.
Printing our way out = hyperinflation.
What's YOUR plan?
Even in the days of The Federalist, the concept of money velocity was well known. They called it "celerity of money." The ancient chinese referred to "flying money."
I do not think the term "idiot" is well taken since as the celerity of money decreased--nearly moving to zero last year as credit markets froze--commerce was falling to a stand still.
A lot of very experienced wily people believe the loss of velocity greatly outweights the addition of money.
To explain it to you in simple terms, multiplication will usually result in higher answers than will addition.
So let's say the money supply was X. The actual money supply in use was the velocity of money times X, lets say 2X. As the velocity reduces, the actual amount goes down--ergo, deflation.
So let's take some #'s: Money supply 20 trillion, velocity of 2. Actual amount of $-- 20 trillion.
Economy seizes, velocity drops for 1.3, actual money drops to 13 trillion.
Bush\Paulson\Geitner\Obama throw in a 1 trillion stimulus, velocity rises to 1.5 (still sucky): total actual money 11 x 1.5-- 16.50.
Still less than the 20 trillion we had when velocity was at 2. Ergo, deflation.
My numbers are not exact, but maybe you are the idiot.
As for the RW gold standard arguments, it is true the money is an agreed construct, and if that does, almost all goes. But pls see read Malkiel, A Random Walk Down Wallstreet which explains why gold is usually a bad play. Maybe not right now, but usually. The gold standard does not solve these problem of lack of agreement, as sometimes even gold is not worth anything. There are some outer limit\twighlight zone expisodes about that.
You act as if life will go on, while I'm investing like the entire Anglo world is coming unglued, with no return to anything that will ever be confused with "normal".
Deflationists believe that normal will return, the inflationists believe that everything will collapse.
Or simply put the deflationists believe the US will retain the WRC, when in fact it can't and won't.
I agree with Nathan. Deflation implies that WRC stays in place unchanged from the current behaviour. China is already working on an alternative (ie basket of currencies). The world does not have to return to a gold standard but instead merely create a viable alternative. The US has abused its position and it is no longer the world that existed after WWII.
I don't want to deflate your bubble, but I only like your first line.
Read this from another Nathan, it might help:
http://economicedge.blogspot.com/2009/08/week-in-charts-buckle-heck-up.html
Cheeky, you'll probably like this as well. Look at the import/export price chart.
Supply & Demand still apply.
hey, this is good.
But what happens when overseas govts start spending their reserves?
Currently occuring - China's buying raw materials like copper, $2b of our home mortgages, they may also be hedging by purchasing our equities?
I subscribe to the concept of the Waterfall Effect (http://fofoa.blogspot.com/2009/08/waterfall-effect.html).
The roots of this come from the physics in creating a pile of sand 1 grain at a time. At some point, the pile has pockets of instability that a single grain can set off a landslide.
Sometimes the landslide is minor, and the pile subsequently continues to grow with the application of each grain of sand. Sometimes, the landslid is major.
Apparently, this math can be appied to financial systems as well.
Hey Tyler, remember that joke about selling California to China? Turns out.... it may not be a joke.
China to buy 2bn$ in US mortgages
https://www.inthemoneystocks.com/n_rant_and_rave_blog_single.php?id=2389
$2b? that is a rounding error in the grand scheme of things
You don't really expect them to announce that China is buying Califonia do you? NO, not all at once, 2bn at a time, that way no one will pay attention... I'm just saying, maybe it's time to keep an eye on how much American property China starts to accumulate. The nex great american land grab is going on right in front of us...
Is it better to learn Chinese or Mandarin?
?????????????? goddamn, we cant post symbols
Mandarin is the most common language (although more than 500
dialects exist) and for all intents and purposes = 'Chinese'. Cantonese is the other.
The writing part of chinese was standardized circa 3000 years ago, thanks to the first emperor of China.
The spoken part of chinese has not yet been standardized. It was attempted after the removal of the last emperor of china, by Dr. Sun in 1911. The Dialect chosen to be the standard spoken part of chinese was the Peiking dialect, now commonly referred to as Mandarin, which is taught in the school system.
Depending on who your parents are, the child will have to learn at least two spoken languages of Chinese (unless your parents are Peikingese, then you will speak only one mandarin). Say, for example, a cantonese child will learn to speak cantonese at the young age of toddler and later learn to speak Mandarin at the school system.
Mandarin is the spoken ( oral) chinese, and Chinese is the the written mandarin. There are the one side of the same coin?
Hmmmm... Mandarin oranges... hmmmm...
$2b may be a rounding error, but it's $2b more than California is worth.
about 2 weeks interest on their reserves of $2T.
Haha. I remember this same thing (or eerily similar) with Japan...right up to The Lost Decade.
Tyler,
Did you see Bloomberg TV today? Will Landers of BlackRock was talking his book with regards to Lat Am. Telling it was still a good market to get into... I am guessing they're the ones selling... wanting stupid fund managers to lap it up.
yo Ray http://www.bloomberg.com/apps/news?pid=20601014&sid=amowlMWZN_dc this might be interesting for you ...
Makes sense to me. Vanguard merged their Treasury MM Fund with the Admiral Treasurey MM Fund to stave off collapse of what should be their safest type of investment. Americans Funds merged their Treasury MM Fund with their regular MM Fund, both of which now feature 0% yield.
Tell me things aren't really, really fucked up?
That's funny. My coffee can full of cash also has a 0% yield.
good point
At least you know how that CC $ is invested. ;-)
> Tell me things aren't really, really fucked up?
OK, here you go:
Things aren't really, really fucked up.
Do I get the job at CNBC now?
Just got a call from SmithBarney,...they just banned trading in all Short and UltraShort ETFs! They think they are risky and retail investors should stay out. This market is joke,...a f joke.
They didn't ask me to liquidate just yet,...I think that's tomorrow's phone call.
Are you serious? Has anyone else heard from any broker doing such a thing?
this is old news, chuck and ubs did this a few weeks ago on their retail side and forced buy ins
So I guess retail investors with a clue will be forced to get electronic accounts. Brokers are generally idiots anyway. Since I have been playing Profunds Long and Ultra Short Funds (ETF's much newer) since 1999 in my IRA, I have to wonder how much longer until a ban on short ETF's altogether.
the answer to your question is obvious; they'll ban US-ETFs when the market tanks 600 points in one day
Not true about Schwab. Just purchased SKF and SRS from them late last week.
Is that for real?
He is referring to the high correlation of returns across asset classes in the financial markets.
His message was being spread and gaining even more support...therefore he needed to be censored. Until we have guys like Black back as regulators nothing will change. We just
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
I live in Murrieta CA, I am an Real Estate Broker/ investor. I got out of Real Estate in 2005. The other day I decided to look around my golf course neighborhood for foreclosure activity. I found 20 homes all within 1/4 mile of my home in foreclosure. No for sale sign, no for rent sign. The homes are occupied. Title has this funny feature where it tells you what the people owe to make the loan whole, most of them owed at least 6 months on the mortgage. One home has been empty for a year but it is not foreclosed. I do not know what the dollar amount adds up to but if all these homes were on the market today I would take at least a 20% hit on the value of the home I bought 9 months ago. I do think there are buyers but for the bulk of the buyers they are waiting for lower prices. This winter will get ugly
FASB157 was a charade. Those TBTFs will be FTBTS at some point, no matter how they rearrange the furniture to make their trash heap look nice.
Its like that everywhere in the US. I have at least 20 in my neighborhood sitting empty with no forsale signs. Its called shadow inventory. If and when the banks come clean, foreclose and take possession of all these homes and put them on the market instead of pretending they don't exist, we will not see a bottom. Until they do, I will just sit back and watch as the game plays out. TPTB cannot hold this house of cards together much longer, I hope.
Obviously, you didn't really "get out of real estate," did you?
You are correct. I just sold all of my Real Estate holdings. My wife wanted to stop renting last year so i bought a SFR. I am starting to buy fixer duplexes for on average $15,000.
OK, I am taking the bait, where in the world (and how) are you buying duplexes for $15,000 - Detroit?
try the outer skirts of Calcutta
lol..sorry that was funny CB
"golf course neighborhood "
Would that be "The Colony"?
in MN have a friend that has been actively house hunting, reading local blogs, watching insider deals at cheater prices etc...and he sees same thing in neighborhoods, obviously empty houses (in MN it is obvious from lawn care situation - grass grows a lot from natural rain, and then snow shoveling or lack there of in winter), other things that indicated empty houses is not window coverings etc...he says he sees way more obvoiusly empty houses with signs, than without signs.
Besides this shadow inventory that many bloogers have covered extensively, don't discount effect of fraud due to massive transactions occurring and regulators, banks, and investment orgs being overwhelmed. Just as there was fraud, strawman buyers, illegal flipping on way up; same will occur on way down as there are lots of real slimy inside deals going on where realtors are pretending to sell on market but actaully give someone inside deal...this inside deal price then becomes part of the appraised prices of houses in neighborhood, or condos in same building. Given this, houses prices will likely over-correct on downside, going down quicker than rents.
Also notice the diverenge between banks and investment reps, those strictly holding mortgages as investments expecting cash flow in return and have decent servicing with proper incentives, these guys are facing facts on their mortgage holdings and doing smart buisiness proposition of foreclosing as quickly as they can or taking a decent short sale or even letting homeowner buy house for a lump sum far less than loan value, if they can get financing, as long as lump sum is they offer homeowner is above what they would expect to net if they foreclosed.
Banks, however, are acting much different, unless there is serious equity still remaining in house, they seem to be squatting on property, let homeowner keep paying interest only, or just not ever really taking possession of house even if they make initial moves towards foreclosure. I suspect this is because of the fake capital of the full value of the mortgage is worth more to them than just cutting losses, as say an invidual that owned an investment house which no one was paying on anymore. Every dollar in a performing loan, is 10 dollars they can lend. Every dollar of capital is that much closer to avoid FDIC visit on Friday.
78 handguns, 5 ar-15s, 3 deer rifles, 3 shotguns, 22,000 rounds of ammuniti0 on ... looking for 40 acres in Idaho (will accept western Montana if it's defensible terrain). ...
78 handguns? And I thought I was paranoid. How many hands do you have?
wrong site man; i think you meant to go to infowars.com, or prisonplanet.com, or urbansurvival or shit like that ..
That was Janet Napolitano - she's paranoid or attempting to bait.
The buy algos are getting smashed one after another this AM.
Let's see how the risk aversion goes (Yen and USD). The EUR/JPY is hanging by its toes looking over a cliff.
Well Mr. Bernakke we call this one our 'Fiscal Bubblicious', initially it does give you a rather deflating feeling... but its' creeper man ... wait for it.
Because CNBC has been unable to get many credible people like Tavakoli to come on the air enough, they've loosened their policy to ensure they have enough guests to fill their airtime.
http://www.theonion.com/content/news_briefs/cnbc_anyone_who_owns_a_suit?...
TD, Can you give a link so I can read more?
thanks.
if you're looking for a road map to where the S&P might go, find a chart of the Hang Seng from the year 2000 double top ....Compare that to our SPX double top in 2007....It's eerily similar and I feel points to where we're headed which is back to the low 700s early 2010.
I have wire cutters and a key to your back door. I sure hope you guys can't shoot.
you wanna know how powerful China is relative to the US.
China told Geithner 2 weeks ago that if YE yang was in the last group with Tiger, Tiger was to let YE YANG win.
The Chinese own more than US treasuries. The own the slaves inside the borders too.
The ascendancy continues.......
Why not short? Cash is for kittens.
Its funny zero hedge keeps going off of economic fundamentals, not humanistic behavior fundamentals of money managers, there is still enough jealous cash on the side line for the S&P to get to 1100.
all the jealous cash is hoping and praying for the sept slow down, guess what if everyone is thinking that, its not gonna happen, and that will be the bear capitulation as even the most conservative money managers have to get in, and then I will get short again.
Janet; 2 questions.
Can I have a date?
Why hasn't Congress / Senate held formal investigations and open hearings on CDS, CDO's & fraudently securitized toxic mortgage backed securities ?
The fact that the perpetrators of the largest property crime in the history of humanity walk the streets free is irrefutable proof that Americas' government has been captured by criminals. Treason,violation of fiduciary duty and bad faith dealing is Washington D.C.'s only stock in trade in 2009. On the Edge With Max Keiser & Tyler Durden of Zero Hedge - August 14, 2009 (Part 1 of 3) http://www.youtube.com/watch?v=n4I86viAc-k On the Edge with Max Keiser - 07 August 2009 (2/3) - Brown's Bottom http://www.youtube.com/watch?v=Oiz6mkySKso&feature=related On the Edge with Max Keiser - 07 August 2009 (3/3) http://www.youtube.com/watch?v=W9plCVfR02U&feature=related CAMPAIGN FINANCE = FASCISM (regardless of of whether the Blue Donkeys or the Red Elephants are fronting for the Bankster Oligarchy this year, last year or next year ) The only way to change the subject from the calculated diversion of "Bush did it" is to focus on the Constitution and how the abuse of campaign finance by Fascists has America headed for Bankster tyranny.http://www.atimes.com/atimes/Global_Economy/KH15Dj02.html
When the risk trade is on, stocks go up, commodities go up, European currencies go up.
His message was being spread and gaining even more support...therefore he needed to be censored. Until we have guys like Black back as regulators nothing will change. We just
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
There's nothing different now than there was in March re: banks in trouble, mortgages underwater, etc. As a matter of fact, she's wrong about credit cards being in worse shape, but no matter. My point is, she could have said any of these things in March, and we've rallied 50%. And yet, now she goes to cash? Doesn't make sense...
Do you 'invest' your own money or somebody elses?
Much like Janet here... nearly 90%+ cash and all longs hedged with SPY puts. Time to get more aggressively short?
" My point is, she could have said any of these things in March, and we've rallied 50%. And yet, now she goes to cash? Doesn't make sense..."
wow - that's really stupid
steve from virginia,
what are you invested in? you make a lot of sense to me. i am trying to save my ass here. how to do it?
Interesting comments as usual, open thinking = possible solutions? I see no solutions so far from commentators other than ideas on how to make money out of preserving value in something other than equities, whilst dodging players like the Fed and Goldenballs who rig markets, for some reason. I am still prepared to give the Fed the ignorance of the doubt and believe it is acting for the good of the nation as a whole and not the banks as a cabal that feathers the nests of individuals employed by the Fed. If you believe in a patriotic Fed, then what should it do? I have an outstanding question with the San Francisco Fed suggesting that there is a level of GDP that reflects an economy based on the bottom half of the population needing to save for two large ticket items, a house inflated at 2% from 1997 levels, and a retirement costing twice that house. It implies the savings rate needed to return consumer debt levels to those which equate death and zero owed at death of around 25% per annum for the next twenty years. GDP measure by Income, Expenditure and Output for the overall economy needs to contract by around the same 25% to be in balance. We can do this via the Japanese "lost two decades" with no solution, or adjust balance sheets of Governments, Companies and Individuals to that level now OR we come up with a winning alternative. One thing I don't understand about the housing market is how banks can continue to earn zero on empty houses, though perhaps Japan has already given the lesson to the Fed that there is no difference between a non-performing loan and a zero interest rate. My solutions? Haven't changed since the crisis started. Reduce the military by half, stop thinking that there is a need to increase deficits when the deficits already fulfil the balancing act they were supposed to (go up in recession and down in expansion via changes in taxes paid) encourage labor mobility (take 25-50 million immigrants and export 5-10 million americans not using bombs and guns to improve global infrastructure). Split off all risk taking away from banks, i.e. revert to and extend Glass Steagall so that banks only do loans, removing all other risk taking to new risk-taking companies (call them hedge funds or prop funds and let investors choose which they like). There are other ideas, but that will do for now! I am pleased that ZeroHedge is moving on from the micro aspects of markets to the macro aspects of the implications of market abuse. Bravo!
read the thread on Consumer analysis from Saturday, and then read the post and the comments from the article on Bubble creation. Some serious brilliant stuff was written there.
Yes I read that. Intuitively I have a problem with it as I think there is a causation bias, relating to the impoverishment of the bottom cohorts and the polarising of wealth into the top cohorts. I have to think more about it, but I the article doesn't ring true. Intuitively again, hasn't there been a destruction of the middle class via the exporting of manufactured jobs to third world countries like Brazil, Russia, India and China and wouldn't a fairer view be the proportion of income paid in taxes by each cohort rather than income? I can see that the external sector of the economy referenced via trade deficits is small ("only" 6% of the economy at peak trade deficit) but what of the "off-balance sheet" behavior of the wealthy in avoiding US taxes via UBS et all? What are the cumulative effects on the economy of deliberately investing scarce US resources in foreign economies? Like I said, saying don't buy Wal-Mart because the majority of consumption will still be made by the wealthier cohorts who buy Gucci is very close to saying "let them eat black forest gateaux". Anyway, there isn't a simple answer, but, for my sins, I believe the combined wisdom of a lot of poor guys is more real than the combined wisdom of a lot of "fat cats". And there are a lot more poor guys who could spend a lot more money, than there are rich guys who might not drop their spending.
oops..by income, in the first line, I meant spending of course.
We fucking gave Chrysler to Fiat and they will be making cars in Mexico...WTF.
Just took a call from relative in California who bought a house for $615,000 three years ago, added $125,000 pool and upgrades. Appraised last week at $380,000...what to do?
Bought a house in the early 80s, put improvements in that add up to about what it would sell for today.
Probably didn't even capture inflation.
Mortgage is paid off.
What's the problem?
Your relative doesn't want a house. He's high stakes gambler with no system. Deserves what he gets.
My relative and his wife are doctor's. They saved and put a 50% down payment. They can easily afford the mortage. It's not them to walk away! The neighbors who lost jobs, got crazy loans and used equity to live above their means. Not to mention the Banksters who created CDO's. I advised them to stay put, it just might come back in 20 years! Why the hell is Angelo not in jail with Madoff??
Enjoy it while he can and save up every cent for rent.
Enjoy it while he can and save up every cent for rent.
I think there's an article around here called Ruthless Defaults. Good luck.
that's a rhetorical question, right?
can they afford payment?
was the 125k spent from a heloc or from their pocket?
from what I have read about Cali on blogs best course of action is to get a good lawyer that has been handling foreclosures and get some advice. Find out track record of lender, servicer, are they responsive and do they ignore pleas for deals?
I have heard with a minimal amount of push back from a decent lawyer foreclosures can be stalled for year or tow because many banks overwhelmed. This is time money spent on mortgage payments can be instead saved so have some cash reserves once homeless.
Even people who have mailed in keys and left house find out they are still in ownership as the banks never acted finalizing foreclosure.
There is much documentation they need to produce to if they want to kick you out, make them follow the letter of the law.
Really, the bank would be better off to let homeowner, if they have income to buy the house for something reasonalby close to current value to make it tasty to homeowners to stay in house, pay on mortgage even if underwater a bit, say, 400k or short sell it for 370k,as foreclosure process likely cost them 50k by time house sold, and could be worse with empty house damage... but they seem to have perverse incentive to pretend loan worth face value until final transaction of short sale or foreclosure. If they want to pretend loan is okay when it not, why not oblige them by staying in house.
Walking away or just staying and not paying is contagious, and is more epidemic than swine flu. EVen for those not inclined to do this, reality is more and more others will, not near the bottom. Buyer, seller, or martgage payer, beware
Thanks for your advice. Paying their bills is not the issue. x
So the short and ultra short ETFs are too risky ?
And the long and ultra long ETFs are what, exactly ?
Anything to keep the short squeeze going I guess.
Jealous cash? Don't hold your breathe. The amount to get the market to rise x% is higher as the market goes up. Whatever amount is left has less impact on the market. $3 can buy a share of Citi 2 months ago, now you get only 3/4 share, understand that?
And why, if everything else is same as March, did she get out of stocks now? becoz of "Gravity". Why can't we throw a stone to the moon? Understand that?
Stocks perform best under goldilock scenario - stocks perform bad in inflation, even worse in deflaton. Want proof for deflation? - see japan last 2 decades. Want proof for inflation - see 1979-1982. So those who try to insist this is a sustainable bull, well, good luck and see you soon on this forum.