STIMULATE THIS: First of all, do you really think you are going to get the Democrats and Republicans to agree on a complex financial issue like this that includes a social element? HELL NAW! But even if Verne Troyer suddenly becomes the next big NBA superstar, all four Beatles reunite and MTV starts playing good music videos again -- and the U.S. Government actually approves any kind of economic "package" ("package" means "complicated -- as in the kind that never gets approved), it ain't gonna be nothing but a drip in the bucket. (Not even a full drop.)
You know the degree government is able to make an impact on something like this! Sending someone a check for $250 or $500 is not going to make a difference. Then, do you think the people will invest it as intended into the housing market -- or head over to Best Buy?
Meanwhile, I heard it is so hard to get credit/a loan from a bank now, even Warren Buffet was just rejected for a two hundred dollar loan that he promised to pay back by next Tuesday.
If people's arms started falling off, all across the country -- and everyone started bleeding to death from the wound...Washington would be there to offer "one free band-aid for all!"
JINGLE MAIL: In related matter, I know a lot of people feel we are near the bottom of the housing crisis. I think we are at the bottom, too...the bottom of the beginning, that is. So I hope you enjoyed the appetizer.
Here's what's next: Well, now since people owe more on their homes than they are now worth (since the recent drop in value), people are making the prudent fiscal decision. Simply walking away from the loan and the home. So they take the keys to the home, put them in an envelope and send them to the bank. (Just like hotel keys!)
Then, when the bank gets the envelope and hear those keys jingling -- they know another one bites the dust. So banks are going to have a whole bunch of homes on their hands, that they cannot sell, and are dropping in value as I type this. PLUS, the double-whammy of not taking in any monthly payment at all! So look for some HARDCORE housing and banking credit news to unravel before your eyes this year.
Although I don't think it's something that government should be mandating (the way Clinton suggested), I do absolutely agree that any smart bank CEO would tell subprime clients -- we'll keep you locked in at the same rate -- or only raise it a little...so that the bank can take in SOME money, and people don't have to move. There will be undertow effects of people moving out of their homes. In California, where you have the most of these subprime situations, you may see entire communities go south -- stores and business will be forced to close -- and then they turn into crime and poverty zones. Think about it.
CREDIT/DERIVATIVES MARKET: The credit (card) situation isn't any better. More and more people will be later and later on their payments -- and you'll see a rise in people who default altogether and walk away from their credit card payments, too.
INFLATION NUMBERS: The inflation number for the first month of the year was released yesterday. It wasn't too much higher than expected...however, it was the biggest increase in the inflation numbers in 17 years (2000). Check this blog and my other blogs. Not only did we predict the subprime mortgage crisis and recession in May 2007 -- but have also been saying inflation would be higher in '08 than anyone is talking about. (Not bragging about the insights of my strategy consultants...but trying to get you to pay attention for the future.
And remember, I was never scoffed harder for suggesting to buy Apple stock, based on the iPod. THE STOCK WAS AT $15 per share at the time. But when I told everyone to sell at $200, no one wanted to sell, because stocks alway continue to only go up...remember!?!?! And what if you sold at $200 and it goes up even more?
It's not a condo, or cement handprints at Mann's Chinese Theater that you are locked in to. If you see the trend continue to rise...you can buy it again. (Duh!) But then you might pay $2 a share more...so hold on, and lose $40 a share out of greed. (LOL!)
BERNAKIE: I call him, "Bertankie" because that's what he is doing to the world economy. I LOVE how he is saying, "We are ready to take substantive action and do whatever it takes...blah, blah, blah." WHAT THE F*CK ARE YOU WAITING FOR? Are you Hellen Keller, Ben? If you were a fireman, you would be standing with the hose while people are running out of the building screaming, "FIRE, FIRE!!!" I bet Bernakie is just hearing about this upcoming music trend called "hip-hop". He hears it gonna be all the sensation. Ben just made a prediction...The New England Patriots are going to have a good season. He's so behind the curve he is actually ahead of his time!
MUTUAL FUNDS: Please don't be one of these naive idiots who tells me, "I'm not concerned about stock market volatility -- I'm in safe mutual funds, and those are highly managed by experts. EXCUSE ME!!! MUTUAL FUNDS ARE MADE UP OF STOCKS!!! If the Dow Jones went from 13,500 to 12,500 in a month -- and the "A" stocks like Apple have dropped from $200 to $160 (along with ALL STOCKS)...why would you think mutual funds are not getting hammered proportionately? (Faith, hope and optimism I guess.)
ETF Funds: On the rise, with more and more popping up and over $60 billion invested in ETF funds. They are the new "mutual funds", and they may give you more control over sector selection, and the fees end up costing you less than Mutual Funds. And you can buy ETFs that short markets, too. Which is a lot easier than trying to short on your own.
STOCK MARKET VOLATILITY: I know you think we have already seen the big sell off...but the charts say we have not actually had the big shoe drop yet. Monday, I predicted the Dow Jones would hit 11,500 before 13,5000. I've been saying since October that all money should be out of the stock market by Dec 31, 2007, in time for the '08 opening bell. Then, after eight down days -- and one up day -- people felt we hit the bottom. But this blog was here to say, "Not so fast you optimists" -- and I think in early February, we will be looking back at today saying, "Ah...remember the good old days of last month, when there was hope we would be back up into 13000 territory, and Apple is gonna rally back to $200.
Don't even ask me about the time I stood on the restaurant table and screamed SELL STARBUCKS while still in the $23 range. (I even threw in the outrageous claim that it would hit $19 before $25.) I was told I was full of sh*t, because Starbucks was at $38 at one time and everyone just wanted to wait until it went back up a little. WELL...now it probably WILL be going up: From the $19 range. (LMFAO!) So please...keep ignoring everything and trust in "hope and optimism."
Maybe Ward Cleaver will be showing up to the next community softball game, too. And Aunt Bea will have lemonade!
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