Thursday, June 13, 2013

Wall Street Babies Get Pampers Changed by Bernanke's Au Pair Hilsenrath

In case you were confused about things for the STUNNING 4% or so drop in the indices and rate sensitive items getting clobbered this handy diagram should clear things up.

1.) OMFG!!!! The Fed may taper/slow/stop extra bond buying:

2.) WE ARE SAVED!!!!:

As you were.

Note: The recent drop extends my time estimate until we get there, but I believe when the S&P 500 gets to 1800 there will be a significant opportunity.

Have a good night.


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Brad (Jeff's formerly anon tormentor) said...

Hiya Get! How the robot overlords treating you.

This seems rather fitting as you are (once again) ranting at all the hysterical screeching presented to you on MSNBC. From someone like me who takes the long (as in 20+ years) view on this stuff, I dont know why you get as agitated as you do. If ive said it once, ive said it a million times,

Yes the USA "implosion" will come some day, but its only at best a 45% shot it happens in our lifetimes. Note, it was a 50/50 shot, in 2008, but as you and I are now 5 years older, those odds decrease over time.

Anyhoo - as luck would have it, now that our boy Jeffy is calling bottom in housing, I am giving him the business on our ole DC Case Shiller bet.

Its in 3 parts, and if you take the time to click on the links, I think you will be highly amused. Generally, I dont like to toot my own horn for karma reasons, but GOD DAMN I WAS RIGHT - HAHA!!!

Also, it might be of interest to you as YOU ARE FEATURED heavily in those "discussions". Its interesting too how in the beginning you (then focused on the hysterics) would ATTACK ME FOR HAVING THE TEMERITY OF THINKING DC HIT BOTTOM. Over time, you backed off as you realized how right I was. Still its amusing to see in sort of chronological order.

Hope everything is going well for you, and try to lay off the CNBC. Cheers

EconomicDisconnect said...

Hey Brad,
That was an exhaustive thread to be sure.
As for my post not sure how I was ranting. I think it summed up the situation perfectly. I too an a longer term investor. Knowing where something WILL be makes investing easy, as the robotics will be and how my monster regional bank bet in January 2012 paid off in spades this past January.
You mistake my frustration and anger over lots of things as bearish ranting or doomer menatlity. You fail to see that I have great concern and love for markets, free markets. Not rigged, spoon fed markets where everyone is baled out. Maybe that works for you but not me. What the Fed has done and is doing is both wrong and harmful.
Anyways, yeah the DC home market call was great. I knew it would hold up and get better faster than other areas but I expected more damage than happened. Of course a myriad of support programs and all time low rates helped. Good call though.

GawainsGhost said...

Welcome back, GYC. I hope you enjoyed your vacation. You certainly deserved a good one.

I don't know about DC home markets, except to say that they're one of the highest priced outside of Manhatten. Don't expect that to last long. I've seen enough price fluctuations to know that's true.

Let me tell you what I know about real estate. Do you know what the secret to the success of McDonald's was? They were smart. They targeted corner lots at high traffic intersections where they could open new franchises.

Think about it. That is prime real estate. I learned that when I was 16. Wendy's opened a franchise on a corner lot at the intersection of Closner and Freddy Gonzalez. The football stadium was about a half mile down the road.

This was my first job, carry out grill. On Friday nights, there were cars lined up like you wouldn't believe. I've flipped more burgers than you can conceive.

Then when I was 17 my mother gave me an assignment. "Go to Rio Grande City and find me a place for a Whataburger." I was but a child then. What the hell do I know about real estate? But I drove out there and looked around.

Now, Rio Grande City is about 80 miles away, so it took about an hour. The entire drive all I was looking at was mesquite scrub desert. I got to the town and there was basically nothing there but a strip mall. It was a very small town, with no other businesses. So no corner lots at high traffic intersections.

I stood in the parking lot of that strip mall and looked around. Then I noticed this vacant lot across the street. And I thought, I've been driving for an hour, I'm hungry and thirsty, so where would I stop for food and drink?

I drew a crude map on a legal pad, took it back to my mother and said, "This is where I would build a Whataburger." It's not on a corner lot, because there are no intersections, but it's the first place you would come across when you came into town after an hour drive.

They bought it! Yep, they built a Whataburger right there where I recommended. It's a successful franchise. You're driving along a lonely country road, you're hungry and thirsty, you come into town, and the first place you see is a Whataburger. Where are you going to eat?

It's an old saying. Real estate is all about location, location, location. It's about the right location. And it's the same with any other investment. You have to position yourself where the most traffic is.

Buy low, sell high, kiss my ass. Buy where the most traffic is. Invest long term and reap the profits.

Brad (Jeff's formerly anon tormentor) said...

Well that didnt last long. After 1 day, the man with the thinnest skin in the history of blogging, jeffy couldnt stand being called out, and deleted that whole post, LOL!!!

Interesting how he was more than happy to bookmark our bet in anticipation of having me eat crow, yet when the bet goes the other way, its delete, delete, delete.

Fair enough get on you "ranting". Its true, I do equate anger and frustration with free markets with doomerism, and thats just not who you are.

I guess I dont get in the sense while I dont like what they are doing either, I dont see anger as a useful emotion in figuring out what is likely to happen. IMO, anger clouds judgment, and leads people to sometimes make rash calls. Case in point, in hindsight, I bet half the time you were calling me out for my judgment (i.e. DC has bottomed) was basically misplaced anger on the actions of the powers that be.

But again, ive always had a stoic way about me when it comes to the macinations of government & wall street. All these things we see as "huge" or "historic" are merely blips when the aliens write the book, "history of the American empire - 1776 - 2340".

Yes, they all seem earthshattering to us - but I would argue thats only a reflection of how good we have it compared to every other prior nation in worlds history. Put another way, the only way we can get angry about things like POMO is because the vast majority of us dont have to worry about running out of food, defense against a warring neighbor, or other basic tenants of human survival.

That said, I do think in 2008, we were extremely (like a 20% chance) of seeing all of modern civilzation go *poof* on our watch. During that time, I was hysterical, because in my view, those hysterics were merited. In hingsight, I thought all of you saw that too, yet I now think you never thought it could be nearly as bad as I could.

Yet as 2009 rolled around and the 20% chance of kaboom went back to 2-3% chance of kaboom that has been the case for all our lives (and will always be), thats when I became sanguine, and the discrepancies between yours, mine, Jeffy's viewpoints stood out more prominently.