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The Unexpected Blowup


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Maybe the next punishment bubble will be in gold and silver.  Why not?  The maSSes never learn.  And hey, if you ride the latest false premise and step off in time....

 

That's what I'm hoping. I'm working on system backtesting software to sell to all the ex-dot-commers/ex-RE-agents who will be piling into the commodity brokerage business in search of the 6-figure no-work-required industry du jour.

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small business doing it tough in OZ although the experts say that things will improve in da second half....I dont think so mate,infact things will deteriorate very rapidly in da second half...

 

During the artificial boom,way too much capacity was added to every sector you care to mention.We have six of every shop and business in every shopping precinct you go to.

 

Downward pressure on sales and margins while input costs like wages and Oil are going thru the roof...god help you if you need fruit and vegetables to run your business... :lol:

 

 

Small business doing it tough: survey

 

Small business is doing it tough in the face of growing wages pressures and increasing prices, a new survey has found.

 

The Australian Chamber of Commerce and Industry-St George small business survey showed mixed conditions for the sector, dominated by a record in wages growth.

 

http://www.theage.com.au/articles/2006/02/...0284046480.html

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TPTB allowed average schmucks to rack up some impressive paper profits in the NASDAQ tech stock bubble, turning them into programmed useful idiot-bots that went out and arrogantly sucked in most of the rest of the maSSes, driving prices higher than anyone predicted.  Then they pulled the plug and flushed the entire public down the craphole.

 

Stocks bought on 50% margin plunged 97% to 99% from their peaks.

 

TPTB have now accomplished the same thing in the Home Bubble, and they're about to pull the plug.

 

Purpose in both cases was to keep the middle class down, trapped in losses and debt, forced to work for peanuts to survive, servicing the top 1% forever.

 

Difference this time is the numbers are much bigger, the leverage is much higher than 50% down (often 0% down!), and stocks that got hammered at least didn't have monthly carrying costs after that.  So the maSSacre in this bubble burst will be far worse.

 

Maybe the next punishment bubble will be in gold and silver.  Why not?  The maSSes never learn.  And hey, if you ride the latest false premise and step off in time....

 

 

nice.

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If you ever want to scam someone out of their money, sure seems like pro sports figures are the easiest marks.

 

Here's a WSJ story about another group of current and former NFL players (mostly Denver Broncos) who have been touched for $15M.

 

They "invested" in an Atlanta hedge fund---International Management Associates---run by a couple of anesthesiologists. :blink:

 

Apparently there was a run on the IMA assets when a couple of investors---gym owners from Boston---got nervous when one of the guys running IMA told them he was leaving to launch another fund and "described how he had learned how to move money through Costa Rica and eventually to an account in Switzerland where it couldn't be traced." :lol: :ph34r:

 

Seems like a pretty good signal to me to get out of Dodge. Sorta like that other blowed-up hedge fund where the CEO sent out checks with SpongeBob on them. :lol:

 

The fund lured "investors" with promises of 10% monthly gains. But when clients tried to withdraw funds recently, they were told the CEO had suffered a nervous breakdown ;) and he was the only one authorized to sign checks.

 

IMA claimed 25% annual gains for the past five years, though there was no verification. The fund also claimed to follow a "diversified strategy to moderate risk." Yet court documents showed that 67% of the fund's assets were invested in a short position on Time Warner (TWX). :ph34r:

 

http://online.wsj.com/article/SB1140220050...e_whats_news_us

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.

 

They "invested" in an Atlanta hedge fund---International Management Associates---run by a couple of anesthesiologists. :blink:

The fund lured "investors" with promises of 10% monthly gains. But when clients tried to withdraw funds recently, they were told the CEO had suffered a nervous breakdown ;) and he was the only one authorized to sign checks.

Duarte (FSO commentator) is an anaesthesiologist; his partner took care of my mother-in-law once. He's definitely of a different ilk than these guys...very straight-up guy.

 

Investing in a fund run by anybody with a medical background requires substantial due dilligence...investment and science are like oil and water...

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Not sure why you think it will get that bad. I think someone on this board posted a link to a 105% LTV mortgage not so long ago. Because of the non-recourse loans, with a 5 year fix interest only l105% LTV loan you can buy a 5 year call option on a CA house for the price of rent, if housing declines another 10%. That should put a floor under the market, no?

 

I don't think Templeton is right. But neither do I think that prices will simply stop declining at 30%. If I had to guess, my current guess would be 50% or more in the areas that saw the biggest rates of increase. Fannie and Freddie will go bust. What will happen to the $450 billion or so of mortgage backed paper held by FCBs?

 

 

Just so you know, a 50% decline in prices will get you to 2003 and in some cases only 2004 in Southern California.

That's correct.

 

Which is why I think 90% may be an understatement.

 

I expect more like 95% to 100% fall from peak prices.

 

100% in case of abandoned homes where nobody wants to aSSume the tax liability and maintenance and aSSociation fees, etc., they'll just become crack houses

 

actually I could see where some could fall by more than 100% -- if some speculators tried to catch a falling knife at 95% off, but then could not re-sell, and the carrying costs were eating them alive, then they might actually pay someone to aSSume that liability and just move on

 

I don't think it would take a WMD terror attack or major earthquake for this to happen either. With all the leveraged speculation on crappy shitboxes that nobody ever really wanted to live in anyway, the unwinding with brutal losses all the way down could take us below the 95% level.

 

Until a property shows a safe steady positive cash flow (which means you can afford to hire a local to get past the pit bulls and collect the rent) these places are NOT investments, they are foolish speculations. And you've gotta set aside a large chunk of your rental income to pay for repairs, holes punched in walls and cement down drains, etc.

 

Smart folks have already bailed out and moved far away.

 

Bagholders remain, trapped in a state of delusionary denial.

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