Wednesday, December 19, 2007

The Shan is hitting the Fit

- November foreclosures up 68% Year over Year
What more can be said other than don't listen to anything a realtor tells you. Remember they were saying the bottom was here 1, 3, 6, 9 and 12 months ago. ARM resets are about peak now. But, there is another big wave coming in spring 2008. So expect foreclosures to decline a little month over month in the next couple of months. Don't buy the hype, it will be a slight pause. Look for a bottom in prices late 2008, maybe early 2009. Then I will start looking seriously at buying.

- Morgan Stanley reports another $9B in junk debt loss
Another day another few billion lost. Let's see if Bear Sterns can out do Morgan. Do I hear $10B?

- Palm reports a pretty nasty quarter

Now why care about Palm? To me Palm is one of those companies that does amazingly well in a rising economy but crashes and burns at the slightest slowdown. It is a luxury item.It is an item for the guy who needs to show off the latest and greatest gadget. The kind of expense that if first to go when one is unemployed or one's income drops.

Given the irrationality on Wall St, all this will be viewed as good news today. We are about at December 1999 right now. People so badly want to believe the cliff isn't in front of them. But as we all discovered in Feb 2000, the cliff was there and it was a big one.

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