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alstry (35.76)

Benny The B Can't Have It Both Ways

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August 22, 2009 – Comments (11)

Federal Reserve Chairman Ben Bernanke on Friday offered his most optimistic outlook since the financial crisis struck, saying the economy is on the verge of growing again.......

But he conceded that consumers and businesses are still having trouble getting loans, even though the financial system is gradually stabilizing.

http://www3.signonsandiego.com/stories/2009/aug/21/us-bernanke-082109/?business&zIndex=153160

Sorry Benny, you can't have it both ways.  The economy can't grow if consumers and businesses are still having trouble getting loans.  Didn't anyone tell you that consumers and businesses are the primary driver of America's capitalistic economy?

Unless Benny has plans to change the fundemental structure of our economy, it is mathematically impossible to grow the American economy if consumers and businesses can't get credit.  But Benny knows this, heck, if he didn't hand out thousands of dollars of free money and relaxed credit qualifications to many who would have never qualified to otherwise purchase a new car, we would barely be selling any new cars these days.  Subprime redux, when will they ever learn?

The problem Benny is simple, and you know it.....those that need credit do not qualify and those that qualify for credit have no need to borrow.  For an economy dependent on credit to function, that is a BIG problem.

Have fun solving this problem without restructuring existing debt....or do you know Mr. B that an event is about to occur that will relieve you of accountiblity of the above inconsistent statements.

9.09 is getting closer.  Think folks, it really is not that hard if you try.....at least for most of you.....the Alstrybaters?.....there is not much hope for you at this point if you can't see it already.

11 Comments – Post Your Own

#1) On August 22, 2009 at 2:12 AM, awallejr (80.15) wrote:

"The economy can't grow if consumers and businesses are still having trouble getting loans." 

Of course it can.  Just not necessarily robust. 

9.21.09 is getting closer and we soon shall see if Alstry's prediction hold's true with the DOW: "I predict 5000."

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#2) On August 22, 2009 at 2:21 AM, booyahh (< 20) wrote:

The banks received trillions of dollars via the Fed and its "quantitative easing" policies. Those trillions are slolwy trickling into the stock market. Sorry folks: the stock market can go up, even when the economy sucks, because rich people have to put their money somewhere. So get used to a subprime "real" economy, while at the same time the stock market goes up.

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#3) On August 22, 2009 at 7:04 AM, JerseyShoreGirl (< 20) wrote:

*Ehem* Lookie over here Fools ....

Lew Rockwell: "Days Away From Economic Chaos"

http://www.lewrockwell.com/sardi/sardi116.html

Will the FDIC's 8/25 report be accurate? My guess is they'll lipstick that beast too.

Oh, and a few more banks fell through the cracks last night .. small potatoes $150mmish in assets .. and it looks like Guaranty in Austin is gone too ($15B), possibly being sold to a bank in Spain. Here's the link if you want the source:

http://www.forbes.com/feeds/ap/2009/08/21/business-financials-us-bank-closures_6804843.html

 

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#4) On August 22, 2009 at 9:30 AM, alstry (35.76) wrote:

awa,

No it  can't and the evidence bears it out.   You don't even have to believe Alstry's pronostications anymore....now that we are close to 9.09, the facts are flying at your face....daily.

Credit is the lifeblood of the American economy.  Everything is dependent on it.  The asset values in pension funds, banks, and insurance companies.  The budgets for municipalities.  A huge percentage of consumer spending.

You have to be living under a rock not to see what is happening.

Now OVER 1 in 8 mortgages are delinquent.

Corporations are reporting massive revenue declines...except for those that sell to Obama of course.

Record numbers are collecting food stamps and unemployment...even as benefits are being cut off.

Bigger and BIGGER banks are failing these days....the really big ones didn't fail because taxpayers gave them more money than their depositors had on deposit.  Think about that one as we citizens are responsible for the bill.

Bankruptcies are growing parabolicly...both individual and corporate.

Office sales in Manhatten are down a whopping  91% in Manhatten.

New Home sales are down a similar amount in dollar terms from peak.

The construction pipeline going into Fall is practically non existent.

And municipalities and states are about to layoff millions due to evaporating budget receipts.  If you want confirmation of this, you can call my buddy John Corzine, he runs a small state named New Jersey.  He has been discussing this issue recently in public presentations.....he must be reading my blog.

Not only will municipalities be cutting massive  numbers of workers, even more will suffer HUGE paycuts.  This will materially impact consumer spending going forward.

THE ONLY POSSIBLE WAY TO OFFSET THE CONSUMER SLOWDOWN IS FOR OBAMA/CONGRESS TO INCREASE SPENDING....THE PROBLEM IS GOVERNMENT IS TAPPED OUT TOO.

If Obama doens't spend the game ends.  If Obama spends what doesn't exist, the whole world will be pissed and the end could be much worse.  MUCH WORSE.

Awa, it is not a question of if anymore...it is already here and deteriorating rapidly.  You can believe the man who told you subprime was contained, or the blogger who warned you subprime was just the beginning.

 

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#5) On August 22, 2009 at 11:29 AM, awallejr (80.15) wrote:

"No it  can't and the evidence bears it out."

I guess we will wait and see when future GDP numbers come out, just like we will see that come 9.21.09 the market will be well above your 5,000 or less prediction.  But by then you will probably say all the numbers lie like you did the last time you were wrong on your U6 unemployment prognostication.  That one was really funny. 

As an aside libor KEEPS coming down.  Banks are still lending, just not as much to the people that shouldn't be getting loans (the ones that don't pay back).  And as a shareholder of C, for example, I hope they continue to show proper restraint.

For SIX MONTHS you have spam blogged everyday how things must collapse.  For SIX MONTHS you have tried to scare people away from investing in the market.  And for SIX MONTHS your advice caused some people I am sure to miss out on one of the greatest bull rallies in history.

And when the market actually does correct, and hopefully it will (I say hopefully because corrections are important to sustaining rallies in the long run) you will be here again scaring people out of buying into them.

You hurt people.  You don't help them.  Nothing wrong with addressing negative issues.  And they should be addressed.  But beating people over the head with it every day simply does not help since the net real effect (assuming they actually buy into your crap) is to make them gun shy more than anything.

Everytime you make a 9.09 blog now I am simply going to respond with your 9.21.09 prediction of DOW 5,000 or LESS.  And in a month we will prove that the "emperor" really doesn't wear any clothes.

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#6) On August 22, 2009 at 2:29 PM, mliu01 (< 20) wrote:

Alstry: keep awallejr's post. You are going to need it one day.

 I am not so sure 909 right now. I am pretty sure it will crashing down on people like awallejr.

People telling truth never hurt people. People propogating lies always do.

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#7) On August 22, 2009 at 4:00 PM, awallejr (80.15) wrote:

Please do keep it, and actually look at what did happen so far in the market mliu.  He told you to stay cash basically back in March.  Well the market rose over 50% while that cash did nothing unless you put it in a bank, so maybe it rose 1-2%.  Yup, way to go.

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#8) On August 22, 2009 at 4:16 PM, mliu01 (< 20) wrote:

David Lereah told you house will never go down before. Sure from 2000 to 2006, it was never went down!

 Lies will not last forever. Enjoy your gain. you have guts to bet on lies. Great for you. Just believe what you believed, alright.

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#9) On August 22, 2009 at 4:20 PM, russiangambit (29.94) wrote:

awalle, you do realise that government spending is a part of GDP? So, GDP can be proped up through government spending the money it doesn't have for a while, either running up a huge debt or printing the money. What happens to GDP after that, do you think?

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#10) On August 22, 2009 at 5:02 PM, alstry (35.76) wrote:

When I made my 5000 Dow prediction, looking back and what has transpired, I don't think I would make any changes, other than maybe now thinking 2000 or 3000 is more reasonable.

At the time, I was unaware of High Frequency Trading and its implications.....but no excuses, it is what it is for now....until the final of two legs breaks.

For tangible evidence of how little importance equities play in today's markets and relative to reality, just look at GM's shares.  They trade millions per day and have appreciated well OVER 100% from the lows.......AFTER EXPLAINING TO SHAREHOLDERS AND IN LEGAL FILINGS THAT THE SHARES WILL BE WORTHLESS.

If you asked me a few months back after the filings and disclosures came out, what I thought GM shares would trade at, I would have said pennies to nickles....but  in fact they have traded much higher.....I suspect in large part due to computer generated programs with no concern for known fundementals.

I can point to hundreds of companies right now that trade with market caps in the hundreds of millions to billions........and most of them have little to no enterprise value in reality.  Alstry can keep screaming all he wants about reform, in the short run the computers will win, in the long run we all lose.

It should not be too much longer now....9.09.

 

 

 

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#11) On August 22, 2009 at 5:55 PM, awallejr (80.15) wrote:

Russiangambit, of course government can prop up GDP.  Good.  Beats letting things crash worse otherwise which is what some really wanted. Eventually the private sector has to lead which I personally think it will in time.  

And Alstry, yup, there are plenty lousey companies just as there are plenty good ones.  You have until 9.21.09, when the summer is officially over.  Tick tock tick tock.  Keep hurting people.

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