Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Why Most Investors LOST Money by Investing in ARK FUNDS - 27th Jan 22
The “play-to-earn” trend taking the crypto world by storm - 27th Jan 22
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

2007: The Year of Debunked Financial Market Myths

Stock-Markets / Financial Markets Jan 09, 2008 - 01:22 PM GMT

By: Mark_B_Rasmussen

Stock-Markets

  • Best Financial Markets Analysis Article The “WEALTH AFFECT” is real and you can borrow yourself into perpetual prosperity.
  • You can spend yourself rich.
  • “It is different this time” and not all speculative manias collapse.

  • Real Estate always goes up.
  • The subprime problem is contained.
  • We are at or near a bottom in the Real Estate correction.
  • February 2004, near a generational low for fixed rate mortgages, was a good time to get an Adjustable Rate Mortgage (ARM) as recommended by Mr. Bubble…..3 months before a 17 rate hike campaign began.
  • “A strong dollar is in the country's best interest” Henry Paulson-Secretary of the Treasury.
  • The “2% Core Rate” of inflation is accurate, reliable and credible. Gold + 31.8%, Oil +59%, Gas +54%, Wheat +77%, Soybeans +79%, Barley 56%, Rice +28%, Cotton +20%, Eggs +69%, CRB +16.5%, Goldman Sachs Commodities Index +40.6% for 2007.
  • The U.S. economy is fundamentally strong with good job creation. The (BLS) Bureau of Labor statistics has created hypothetical jobs with a computer model X12ARIMA aka the Birth/Death model (probably the same programmers used by Wall Street for mark to model valuations). For 2007, 89% of total non farm jobs reported were created by the BLS computer model and were therefore, hypothetical or not real. An example of this is, during 12/2007 17,000 financial services jobs were created by this model, while financial institutions were declaring massive losses and layoffs. The same phenomenon happened in Q2 of 2007 when 115,000 construction jobs were created while home builders were declaring massive losses and new home starts were plunging…..perhaps builders were paying people to stay home. The BLS does conduct a “Household Survey” of 60,000 households and for 12-2007 found a loss of 486,000 jobs, yet reported +18,000 new jobs for December. George Orwell would be so proud to know that “The Ministry of Truth” is alive and well in the U.S. Do hypothetical people consume and pay bills? “figures don't lie but liars figure”, “There are three kinds of lies…….lies, damn lies and statistics” Mark Twain.
  • It is possible to turn financial lead into gold through financial alchemy aka innovation and creativity.
  • Subprime securitized (RMBS) Residential Mortgage Backed Securities deserve AAA credit ratings, the same as U.S. Treasuries and ONLY 5 American corporations.
  • The ratings by the bond rating agencies (Moody's, S & P and Fitch) are credible, trustworthy and reliable. The rating agencies would never be influenced by the companies that Pay them to rate the bonds they issue.
  • Shorting gold is a top 10 investment for 2008-Goldman Sachs. $863 today, a new all time record close, the first monthly and annual close over $800. GS wouldn't recommend shorting gold to cover their huge short positions, would they?
  • Goldman Sachs wouldn't short the same RMBS's they made huge fees and commissions on at the same time they sold them….and Henry Paulson knew nothing about such things before becoming the Secretary of the Treasury.
  • Financial innovation, flexibility and risk disbursement is what makes the American financial system so great. Thank you Mr. Bubble.
  • Risk disbursement is almost as good as eliminating risk altogether……the interest rate spreads said so! That is, unless you were a small town in northern Norway, Make a Wish Foundation, countless Local Government Investment Pools (like Florida), money market funds, Asset Backed Commercial Paper, Insurance Companies, Pension Funds and the entire global financial system. We created a financial plague that has infected every corner of the globe with the blessing and encouragement of Mr. Bubble.
  • Mark to Model/Myth (no sales or market inputs) is a very accurate, credible and reliable method to establish the value of $100's of billions of over the counter securities that have No Real Market.
  • Bond insurance companies (Monolines) with less than 1% equity to risk exposure are definitely deserving of AAA ratings (did ACA really get reduced 12 credit levels to junk in a day? And if they don't raise $1.5 billion in capital by 01/16/2007 $69 billion of their insured bonds will also be rated junk) as they and their insured bonds are as risk free as U.S. Treasuries and only 5 U.S. corporations…….in process.
  • SIV's (Special Investment Vehicles) ($100's of billions) are kept off of bank balance sheets and are much different than Enron's SPE's (Special Purpose Entities).
  • 1.5% capitalization rates for commercial property (1/3 of treasury yields) are a very good value……remember Real Estate only goes up…….in process.
  • The Federal Reserve is omnipotent and can fix any financial problem. After 1% in rate cuts, fixed rate mortgages are the same as last year, the LIBOR rate has hardly moved, the dollar has declined dramatically, inflation is up, they cannot force lenders to lend, they cannot force borrowers to borrow and they can't dictate where the oceans of liquidity they create go……in process.
  • Liquidity is the solution for insolvency…….in process.
  • Subprime is the “Only Cockroach” in the financial pantry. Look at the accelerating Alt-A, Prime, HELOC (Home Equity Lines Of Credit), Commercial Mortgage Backed Securities (CMBS), credit cards and auto loans default rates. S & P is expecting a 4 fold increase in corporate defaults over the next year. Private Equity and M&A loans with Covenant lite and PIK (Payment In Kind) provisions ($7.5 Trillion over the past 2 years) were issued with the same stringent standards as subprime……in process.
  • Legislation to prevent foreclosure on U.S. homes is not to prevent many and large losses by lenders……it is really to allow U.S. homeowners to pay considerably more than their home is worth for a long time.
  • Central banks are inflation fighters with 18 of the 20 largest growing money supply over 10% per year.......between 2-10 times real economic growth. Clearly, they never read or heard Milton Friedman “Inflation is always and everywhere a monetary phenomenon”.
  • “Peak Oil Theory” is false and oil is going down to $30 - $40 per barrel. The world owes the U.S. unlimited, discrete, secure and inexpensive oil. We don't need no stinkin oil wells off of the Florida and California coasts or ANWAR. We also don't need no stinkin refineries or nuclear power plants. We can run our national trucking fleet on wind, our cars on photovoltaic panels and our ships and trains on geothermal.
  • Black Swans, Rogue Waves and Fat Tails are fairy tales.
  • You can believe and trust the Government, the Federal Reserve (private banking cartel) and Wall Street spokespeople.
By Mark B. Rasmussen

Mark is a real estate appraiser/broker by profession

Copyright © 2008 Mark B. Rasmussen

Mark B Rasmussen Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in