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Whitney Tilson: "Why There Is More Pain To Come"
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Whitney was buying stocks like crazy in october last year because he claimed "markets are forward looking and were going to look past all the coming resets..."
And guess what, markets were forward looking and started over-pricing March 1. So, when was said buying spree sold?
I read the book, it is good and reasonable. however Todd Woods Meltdown book is much better, IMHO. I also liked Crash Proof, but Meltdown is directly aimed at everything that happened and why it won't work. Also Jumbos have already started to default, this is Prime or Alt-A mortgages people. Combine that with commercial, auto and credit card losses and watch out. CIT just lost its FDIC partner status because of excessive risk. 870 is just a short term stop before we hit the lows or new lows again. Of course CNBC knows nothing of this...
Just a nit - it's Tom Woods. But right on, Meltdown (http://is.gd/1u1FV) is a great read.
New lows. Severely so. Generational low on 3/6 or 3/9? Don't think so. If history is worth studying, it states that generational lows do not occur when SP500 at approximately 12-13. Could take a while to happen, the Fed did after double the monetary base within the past nine months. Hope it doesn't take a while for a couple of reasons. First, I'm short and would prefer not to wait to long but will if necessary. Second, the sooner we get this out of the way and purge our system of the excessive leverage/debt, the sooner we can finally begin the rebuilding.
CNBC? "Parent" company is GE. GE has rceived 160 billion in TARP and other guarantees from the poor US taxpayor. Thanks Jack Welch. A real "genius". And he still gets his multi million $ "pension"! More incredibly he has been praised for decades for his spohisticated management schemes. GE/Welch has influenced a generation of managers/CEO's in America!Wonder America has gone bust?
and Welch just recently started up an online MBA course...
and Welch just recently started up an online MBA program...
Online MBA, just wait till the upper tier schools smell the money in online degrees. Gotta bring those battered endowments back up to 2007 levels.
Um, not sure what you mean, but sounds like you're implying the upper tier schools will start online degrees? Well, roll back 10 years and check it out. They already do.
This is a fantastic set of data and observations. A Must read all the way to slide 152. Feels like I should have paid for it. Thanks ZeroHedge!
TY MUCH
tick tick tick...
too painful, didn't read
tp&dr!
lol included
Where's it gonna hurt the worst... as an investor or a taxpayer?
TD, I just found that Scribd channel for Zero Hedge, didn't realize everything posted was centralized there, thanks much again! Someone get Marla to spin antoher set tonight...
This says nothing new, and some of its observations are incomplete or wrong. The shadow inventory story--the sale of foreclosed properties for 20 cents on the dollar--is not told at all.
But mainly, the problem is explaining why it happened. The analysis is very shallow. Once the U.S. started allowing prices to rise in the 70s, you were either going to sacrifice suburbia or financial stability. Guess which one went. And you HAVE to keep most people working, NO MATTER WHAT.
So there you go. This little sing-song analysis is garbage.
This little sing-song analysis is garbage.
Are you referring to the sing-song analysis you just posted?
This presentation of Tilson's whether you agree with it or not, is a nice bit of research. Actually, I'll stick my neck out and say it's better than the vast majority of what passes for sector analysis done by the capital markets groups of the major firms. And I read an awful lot of it.
Agreed, that's a fantastic piece of research, while #6060 is an asshole.
Comments by anonymous writers are worthless
Truly, they are.
welcome class to the Jack Welch school of management. Lesson 1: carve out all productive parts of your company especially manufacturing 2. fire people without rhyme or reason 3. bankrupt your company 4. extort billions from the taxpayor. "Mr Blankfein/goldman, Mr Greenberg/AIG, Mr Rubin/CITI, are you listening? How will you be able to extort trillions, lose trillions if you dont pay attention?" "Mr Lawrence Summers! When GE, Goldman, AIG waste trillions, remember to give them free monies" "Remember, forget about quality, production, The Customer, The Future, morality, commonsense, intelligence!" Lesson 2: "How we can bankrupt the US taxpayor via HFT techniques utilizing insider tactics" Damn it, Mrs Sheila Bair! stop playing with Mr Orszag and Timmy Geitner! I fyou guys keep this up, you will only lose millions and not the necessary trillions!"
So, how does this movie end?
Everyone dies
great article. ZH rulzzz
This analysis was excellent but it didn't get to the point: WHY did lending expand? Why did home'buyer' purchasing power expand three-fold?
They should have dug deeper. The problem is central banking and the micromanaging of interest rates. Specifically, the holding of interest rates at below-market levels. Abolish central banking and the housing market will return to sanity.
think about the real estate bubble and the resultant consumer spending that was enabled and consider that the last 5 years was an exercise in a market driven social welfare program.
the impact globally was quite positive, yet it was seemingly created out of thin air. now, how is that possible?
personally, i do not care how it was possible. only that it occurred without hyperinflation. in fact, low to moderate inflation--despite trillions of dollars of wealth created out of thin air that was translated into very high levels of consumer spending and a goodly money velocity.
the solution?
keep printing those dollars. except the Fed needs to buy a larger percentage of the future offerings and then defer interest payments due and ultimately, write off the "loans."
how to funnel those printed dollars to consumers is a problem yet to be solved. I suspect we will see unemployment benefits, food stamps and some other direct payment forms expanded considerably.
Direct state subsidies will likely occur. Heck, the Treasury could just issue sufficient bonds to the Fed and turn around and retire California's entire municipal debt.
Not inflationary at all. After all, those debtholders are not going to use the proceeds for personal consumption.
Look at it like a recapitalization of, well, everything.
Not that the returns on his funds have any bearing on the quality of his research but if they did...
http://www.ncfunds.com/fundpages/135.htm
http://www.ncfunds.com/fundpages/136.htm
Depressing but honest. Refreshingly realistic. Detailed yet easy to understand. Thank you.
Please explain, "How will cap and trade affect the value of real estate?" I learn much, thanks to all comments.