Wednesday, March 12, 2008

Doin' the dead cat dance

Hey remember way back when, to like yesterday when all our woes were over? Benny B saved the day once again by printing an extra $200B. And the so-called experts said that housing was bottoming, no recession was coming and les bonnes temps were ready to roll again.

How quickly things change.

Today the dead cat is falling back down. Wachovia says housing is nowhere near finished crashing. The exact quote from the author, Don Truslow was "Using a baseball analogy I don't if the downturn is in the third, fourth or fifth inning. We're still before the seventh inning stretch." The crash started in mid 2006. If we're in the 4th or 5th inning we have until at least mid 2010 before the final out. And that's just when the bottom will be here, meaning house prices won't start going up until somewhere around the time the MESSIAH OBAMA will be campaigning in Iowa for the 2012 nomination. And I don't know what the method young Mr. Truslow used, but it's most likely too optimistic. He probably used the 1990 housing downturn as a barometer of things to come this time around. Except he probably didn't take into account the fact that this bubble was exponentially bigger and caused by an exponentially larger amount of fraud than the 80s bubble. And besides, since Wachovia is in the business of lending people money to buy a house, you gotta assume he won't want to tell potential buyers, wait for 10 years before buying.

In other news, oil bursts through $110 (and to think I thought it was overpriced at $100, silly me). The dollar bursts through $1.55. And what else, oh yea a survey of top CFOs released today says the consensus out there is we're not only heading to a recession, we're there and big time.

This is the 5th or 6th time this scenario has happened. Benny B prints money. Stocks soar. Next day even worse news comes along. Stocks sink. Rinse, repeat. You'd think the geniuses running investment banks would figure this pattern out after the 1st, 2nd or 3rd times.

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