Cramer Declares BRIC Dead!

You never mentioned selling Fire Island before, but you curiously sold it "in a week" exactly a week after getting margin calls on your BRIC funds. Hmmmm...

Selling real estate to cover stock market losses? Smart.

Take some good pictures of your Lexus this weekend, you will be putting that on the market soon to cover your new margin calls.

Thanks BMG, but you got it all wrong. I have no margin right now, the Lexus is safe and secure, I sold Fire Island b/c the stupid Board decided to take out a $3.2 million ground mortgage on a complex on a sandbar. That enough?

I am hoping that BRIC rebounds -- but am concerned that there will be continuing market disruption as managers are forced to liquidate.

China will grow at 9.5% with virtually no inflation. This is considered by the market to be a "failure." It has pledged to reflate its stock market. It's a communist country - they do what they say they will.

BMG is hoping that my investment strategy has failed, and that I am bankrupt. Neither is true. In a time when the following have failed or capitulated:

1) AIG
2) Merrill Lynch
3) Countrywide
4) Washington Mutual
5) IndyMac
6) Bear Stearns
7) Lehman Brothers
8) Goldman Sachs
9) Morgan Stanley

and soon:

10) Wachovia, et al.

if I, and others, have lost a little money - so be it. What we have lost is liquid, is therefore easy to recover, and won't lead to bankruptcy. What will lead to bankruptcy is holding real estate that you can't afford because you lost your job and/or bonus. I lost money not because of any fundamental error, but because markets gyrated 40% in a single day. I lost money, and Hank Paulson, former chairman of Goldman Sachs, was before Nancy Pelosi on bended knee last night, BEGGING her to fix this problem.

And I'm dumb?

Where exactly did I use the word "hope"? I am hoping that you are bankrupt? Really? Didn't know that.

Reading your last post, should I assume that you are hoping I bought last year with an adjustable one-year ARM and that I work in the financial industry and that I just got laid off? Not true, and I don't own, I rent.

As for your investment strategy failing, well, if you have been breaking even since 2006, then yes, your investment strategy has failed. It's not a matter of me hoping that it has failed. It just has, especially after accounting for inflation.

What Steve, DCO and others on this board have hoped for has finally come to pass. The fall of the real estate market took a sudden and abrupt turn though. I can hold my real estate for 10-15 years with a tennant paying my mortgage.My rental apartments aren't going out of business because some asshole wants do lend money to people who can't wipe their own ass. The funny thing is my tennants are in place for another year so I have lost nothing on my real estate holdings. I do not plan to sell for 7-10 years and every year I need one tennant to rent my apartments in white glove buildings. Thats not to say that rents can come skyrocketing down but I am fine today and will look at the rental market 1 year from now. All the bears got what they wished for except it bit them in the ass.How a financial expert like Steve could possibly lose money on stocks and me the idiot landlord lost nothing so far is beyond me.It will be a cold day in hell for me to turn away from real estate and put my money with a bunch of fools on Wall street to lose for me, be careful what you wish for.

zorter - I'm very happy you will be OK. And I'm not being a wise guy. I do in fact have a problem with your conclusion. I have never wished for anything. I find that to be grossly insulting. I have never advocated the demise of anyone's wealth or financial security. Yes, I have stated, that I wouldn't shed a tear for those who made millions and now can't may their mortgage or rent. I don't think I'm alone either in those feelings.

Myself and several others have been mocked for over a year. During that time I have never stated that, I hope the RE or stock markets crashed. My posts were never based on "hopes", they were based on a clear understanding of analytical data to which I drew my conclusion. The same conclusion that you refer to as "hope". I'm very sorry for those who are going through a tough time. I wouldn't wish financial problems on ANYBODY.

Hope had nothing to do with it zorter and I "hope" I made myself clear.

Thanks, dco. I don't hope for anyone's financial demise either, I was just questioning the prudence of buying into BRIC right now.

"I was just questioning the prudence of buying into BRIC right now."

Because it's at a low, and China is reflating its economy.

I'm glad you're okay, zorter, and if you didn't buy recently you'll do just fine. The ones who are hurt the most are the investment bankers, who lost not only their jobs, but in many cases their retirement funds, their investment holdings, and soon their homes. Last night a friend of mine told me the story of a friend of his from India had a visa through Lehman, when they collapsed he had one week to pack up everything and move back to India.

BMG - you're somewhat right when you say that I'm back where I was in 2006 my investment strategy has failed. If it ends here, today, now. But chances are that within 6 months to a year I will be back where I was in 2008. It's not that hard. If I made a mistake - and I didn't - it was in following sound investment strategy: don't sell in a panic, follow economic fundamentals. Unfortunately, this time, the panic was unrivaled in the history of the country since the Great Depression, and nobody paid attention to fundamentals.

What I'm not stuck with is illiquid assets that I can't sell to cover my costs, and can't pay for out of a nonexistent salary from a job that will never exist again.

You keep saying "well, at least I am not in real estate." So, any investment that's not RE is OK? It's at a low, so it's prudent to buy? So were LEH, FNM, FRE and a number of other companies before they were gone altogether. I am not saying that BRIC is going to "zero", but just because something is "at a low," it doesn't mean that it's a good buy. The NASDAQ is well of it's highs, how many QQQQ do you own? You don't think that the fundamentals of the Russian and Brazilian economies changed a little after oil went from 148 to 100?

As for blaming LEH for being forced to sell in a panic, that's just nonsense. You have had all the warning signs pointing to this "panic." You held those funds after oil broke down in June, with all the turmoil going on in the financial markets, into a weekend when everybody was saying that LEH cannot be saved... Then, after being FORCED to sell into panic, you turn around and blame LEH. Crazy.

http://finance.yahoo.com/q/bc?s=%5EBVSP&t=5y&l=off&z=m&q=l&c=

This is a 5-year chart of the BVSP. Up 300% (or at least it WAS up 300%) in less than 5 years... But it's Manhattan RE that's in a bubble... Right...

And I will not even comment on buying into Chine because the Chinese government said it wants to inflate the market...