Buy stocks now or be priced out forever

Finally I agree with Riversider.

Never thought it would happen.

Some of you always ask WHY does commodities and stock market got to do with the housing market? Well this snippet from yesterday's FOMC meeting notes just about summed it all up for you bears. When you're done, read it again...

"This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion."

Higher stock prices will increase consumer wealth. Higher commodities prices (especially oil) will not (see e.g. the 1970s). The short term benefit to the stock market is clear. Everything else is unclear. If it wasn't you would have unanimous agreement of the FOMC.

nothing like a fed engineered recovery...who is that man behind the curtain??

This will end very badly. And the wealth effect is not really there if you factor in that the average person ahs more invested in short cd's and bonds than stocks. The income effect is not being factored in.

"This will end very badly."

I'm sure it will, but for who? Or What?

In poker if you don't know the mark, then it's you. Flmaoz.

If you shouldn't fight the fed, then how come the re market took it in the nutz? Flmaoz.

“You wanted regulators to ‘impose?’ So you wanted them to stop you from dancing?” asked Bill Thomas, the commission’s vice chairman and a former Republican congressman. “Can’t you set up structures inside [Citigroup]?”

Mr. Prince said that the low interest rates imposed by government regulators helped propel the leveraged buyout boom, and that banks had “no credibility to stop participating in this lending business.”

He added that he believed regulators had an interest in tightening lending standards, essentially preventing private equity firms from forcing banks to lend money for questionable deals.

Another committee member, Byron Georgiou, asked about the ballooning of Citi’s leveraged loan exposure to $100 billion from $35 billion within a short period of time.

“If you were at all concerned about this business how come you allowed the limits to be tripled during that period?” he asked.

Mr. Prince said there was a great deal of competitive pressure to make these loans even though the private equity firms were “driving very hard bargains,” and had to make sure Citi had a piece of the action.

“My belief then and my belief now is that one firm in this business cannot unilaterally withdraw from the business and maintain its ability to conduct business in the future,” Mr. Prince said.

One of the consequences of not dancing, Mr. Prince said, was that Citi could lose the private equity firms as clients and lose bankers that have those relationships. He compared running a firm like Citi to managing a baseball team where none of the players have contracts.

“And if you are not engaged in business, people leave the institution, so it is impossible to say in my view to your bankers we are just not going to participate in the business in the next year or so until things become a little more rational,” he said. “You can’t do that and expect to have any people left to conduct business in the future.”

Just months after Mr. Prince’s dancing comment, Citi took a $1.5 billion write down tied to its leverage loan portfolio. Most of the bankers that did those deals are no longer employed at the firm.

http://dealbook.blogs.nytimes.com/2010/04/08/prince-finally-explains-his-dancing-comment/

" For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance."

for refi, i can agree. maybe. i'd expect that everyone has finished refinincing already at 4is% rates. housing more affordable????? NOT. it props the housing prices, so people who are underwater can get just enough above to dump it on the next idiot.

NY has a recording tax. How many of those refis that occured were really economic?

Dance for me prince! Let's go crazy! Let's get down!

Of course, Steve was calling it a bubble at dow 8, 9, and 10k too.
So much for all those shorts he claimed made him 1 trillion percent!

That being said, I am taking some profits. Can't be too greedy... SSOs have tripled...

Oh please, Eddie Wilson (SWE). Nothing like an idiot to take a post from 3 years ago and make it sound like today's.

Though I didn't think the Dow would go over 10,500 in the near-term, & I was wrong about that.

If you chart bank reserves under QE1 you'll see that they peaked at just about the time the stock market did, and then they - and the stock market - collapsed. That's what banks are doing with the money; not investing it in the economy.

All of this leverage could lead to massive margin calls - sort of like what happened the last time they did this. The Fed has never used these policies before; I'm not sure they know the long-term effects.

Except commodity prices have increased 60% in 2 months - reminds me of oil at $140 a barrel. That didn't last long, either.

> 3 years ago

3 years ago? Try again... 3 months ago!

probably less, actually. horrible call on those shorts!

stevejhx was calling triple top at 1100 on the spx

bob420
about 3 months ago Where is that triple top on the SPX?

stevejhx
about 3 months ago From June, at around 1100. Briefly above twice, just shy once, can't hold on.

bob420
about 3 months ago It's tough to call a triple top when it has been higher twice in the last month. 1120 is the big number. Takes that out and look for 1230 or so.

"Though I didn't think the Dow would go over 10,500 in the near-term, & I was wrong about that."

When have you been right?
Wrong on housing since March of 2009.
Wrong on Gold since 2000.
Wrong on Stocks since god knows when.
Wrong on LIC.
Wrong on Cancer rate in Chelsea.

Wrong wrong wrong.

Ericho, finally something that you and I can agree on... (and there were about 20 other horrible steve stock calls before you got here).

Hmm - crude up 15% in 2 months....

In U.S. Dollars. Crude is up ony about 10% in terms of Yen or Swiss Franks in the same time period. Basiclaly all currencies are declining against commodities but the dollar is doing worse.

When have you been right?
Wrong on housing since March of 2009.
Wrong on Gold since 2000.
Wrong on Stocks since god knows when.
Wrong on LIC.
Wrong on Cancer rate in Chelsea.

Wrong wrong wrong.

-- this sounds like an election slogan! Wrong for NY!

Prediction is very difficult, especially when it involves the future.

Yes, but it takes special talent to be wrong 100% of the time like steve.