Economy is REALLY, REALLY, REALLY In Trouble

[Kid Dakota]

You have production going down but at the same time prices increasing. I think stocks are going to drop a lot lower over the next year until the Fed decides a decrease in interest rates will spur inflation. Aggree / Disagree?

[MrBlue]

Are you refering to the numbers released this morning?

US Industrial Production

[Kid Dakota]

I'm referencig the numbers released over the past month, including the CPI numbers released this morning.

[gull]

I think no one knows.

[MrBlue]

[ QUOTE ]
March 16 (Bloomberg) -- Industrial production in the U.S. rose last month by the most since November 2005, as manufacturing rebounded and the return of cold weather prompted a surge in utility use.

...

The report suggests factories are making headway in their efforts to reduce inventories, pointing to a rebound in manufacturing that's been a source of weakness for the economy. Improved factory demand backs the Federal Reserve's forecast that growth will strengthen in the second half of the year.



[/ QUOTE ]

But hey, let's sell everything because you know, those guys on TV are saying the subprime lenders will cause the economy to go into a recession. Hell even Greenspan is saying we are all doomed. Run for safety!!!1111!1


Subprime Market -- Isolated or a Tipping Point?: Gene Sperling

[ QUOTE ]
Federal Reserve Governor Susan Bies argues that subprime ARMs make up only 7 percent to 8 percent of the $10 trillion dollar mortgage market. Doug Duncan, chief economist of the Mortgage Bankers Association, says that only 6 percent of homeowners hold subprime ARMs. By their logic, even if we saw a 20 percent default rate among subprime ARM holders -- a rate twice as high as the foreclosure peak after the 2001 recession - -that is still just over 1 percent of the full national mortgage market.



[/ QUOTE ]

[Kid Dakota]

You're putting words in my mouth. I'm not saying that it's the end of the world (btw, if I would have believed that during the tech bubble wouldn't I have saved a lot of money). I'm just saying the economy is in a lot worse shape than people are saying.

Just becuase the market has been sliding lately doesn't HAVE to mean it's just a small correction.

[MrBlue]

Well, you did say the economy was REALLY REALLY REALLY in trouble. I figure 3 reallys meant we were in trouble.

Anyway, I'm actually reducing my leverage back to 1 and taking some precautions in case this does turn for the worse. I just like to post articles and numbers and play devil's advocate.

[dopp16]

[ QUOTE ]
You're putting words in my mouth. I'm not saying that it's the end of the world (btw, if I would have believed that during the tech bubble wouldn't I have saved a lot of money). I'm just saying the economy is in a lot worse shape than people are saying.

Just becuase the market has been sliding lately doesn't HAVE to mean it's just a small correction.

[/ QUOTE ]

Kid Dakota-

You obviously have very strong opinions and do your fare share of research. These are not the only economic indicators to consider. To be convinced that we are in trouble based solely on that information is silly and your argument has no merit

[SplawnDarts]

A little downturn would be nice - it's hard to find really cheap investments these days.

One place of interest - look for investment banks that are buying up now-devalued portfolios of subprime mortgages. They're likely getting a very good price on them, because larger firms want to be able to claim "limited subprime exposure" for irrational stock price reasons. That means the rational guys buying the mortgages are going to make a killing.

I'll have some reccomendations at some point.

In the meantime, buy KOMG to go with your HERO.

[cbloom]

I personally hate the overall US market as an investment; I'm sure you can find bits of value though. It's hard to find anywhere in the world that's promising& safe though, because it's all so tied now that if/when the US tanks most of the rest of the world will tank.