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alstry (35.42)

Breaking!!!!!!! 5 for 555 by 9.09

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May 22, 2009 – Comments (12)

In keeping with the MOAP theme and to quell those accusations that Alstry makes only general statements without specific projections.......sorry to disappoint you and here it is...defined and distilled for all to see leaving little room for misperception upon inception:

The Institute of Alstrynomics is making its first official forecast that the S&P will trade at or below 555 before the end of September 1999.

Here are five key reasons, which fit on the back of a napkin, for such a dramatic call (but Alstry has a lot more):

1.  Earnings...or shall we say lack of earnings.   The S&P's earnings have declined 90% in the past 20 months yet the market has dropped only a fraction of the same..... by the time we get past a few more quarters of time.....Alstry projects that the earnings outlook may be worse than the past.

2.  Rising Unemployment....there has been great debate exactly what the unemployment rate is...U3 under 10%....U6 closer to 16%....or John William's closer to 20%....regardless which number you choose....Alstry forecasts massive job losses over the next four months as Cities, Counties, States and Corporations have to deal with rapidly declining revenues.

3. Credit Defaults....as revenues decline and jobs lost...we are likely to see defaults in residential mortages, commercial mortgages, credit cards, corporate debt, auto loans and municipal debt rise to levels we have never seen before.  As such we should continue to see banks shutting down across the country plus more banks require more capital as the Zombulator sucks money out of the general economy to keep the remaining banks on life support.

4. Slowdown in spending....by the end of summer, many contruction projects will be completed leaving relatively little in the pipeline going forward.  Consumer spending will likely to slow dramatically as fear of unemployment rises and savings decline across the nation.  Corporations and Municipal spending will likely cut back as well to compensate for lower revenues and profits.  The combination of the above will likley have a dramatic impact on GDP in the upcoming months.

5. Rising Interest Rates.....as more and more realize there is less and less...fewer and fewer will want lend... and those that do will demand higher rates of interest to compensate for higher risk.  As rates rise, the rate of return investors demand will also increase forcing PE multiple downward and naturally share prices fall as well.

If we have a true bond dislocation...there is no limit to how low things can go....................

There you have it...5 reasons for 555 by the end of 9.99.

An amazing article I came across today.....Can you believe this Verizon operator..WTF??


A 62-year-old Carrollton area man was found unconscious and unresponsive Thursday morning during an intense search overnight by Carroll County sheriff deputies, an Ohio State Highway Patrol trooper and the patrol’s airplane.


Two K-9 units, several fire departments and 100 individuals on foot also were involved in the search for the man, who Sheriff Dale Williams said fled his residence on Kensington Rd. after a domestic disturbance call to deputies.


The man, who was treated at the scene by emergency medical technicians, was taken to Aultman Hospital and released Thursday afternoon.

Sheriff Sgt. Ron Clapper and firefighters found the man about 1 a.m. after 11 hours of searching in an area just north of Augusta, including Manfull Orchards, where there is a Verizon cell phone tower.

Williams said he attempted to use the man’s cell phone signal to locate him, but the man was behind on his phone bill and the Verizon operator refused to connect the signal unless the sheriff’s department agreed to pay the overdue bill. After some disagreement, Williams agreed to pay $20 on the phone bill in order to find the man. But deputies discovered the man just as Williams was preparing to make arrangements for the payment.

The sheriff organized the search party for the man after deputies responded to the domestic call Wednesday at 2:21 p.m. at the Kensington Rd. residence. The sheriff said the caller said the man was destroying the house and breaking windows and other items.

But when deputies arrived they were told the man had fled and had taken several bottles of pills.

“I was more concerned for the person’s life,” Williams said. “It would have been nice if Verizon would have turned on his phone for five or 10 minutes, just long enough to try and find the guy. But they would only turn it on if we agreed to pay $20 of the unpaid bill. Ridiculous.”

Williams said he doesn’t know how close the situation was to becoming a tragedy because he’s not a doctor, but he thinks the man’s condition was very serious.

http://www.timesreporter.com/homepage/x862899385/Unconscious-Carroll-man-found-after-11-hour-search

$20 bucks?????????????????

12 Comments – Post Your Own

#1) On May 22, 2009 at 8:35 PM, alstry (35.42) wrote:

Zacks Research analyst Dirk van Dijk warns that another major mortgage crisis lies ahead as huge numbers of homeowners who have been making only minimum payments on their “pick a payment” mortgages have to start paying in full.

This can cause huge jumps in the monthly payment, with increases of over 50 percent not uncommon, van Dijk says, making these the ultimate “exploding mortgages.”

The number of these recasts is relatively small right now at $1 billion per month but will grow dramatically over the next few years, exceeding $8 billion per month in the fall of 2011.

"If the equity in your house is gone and your monthly mortgage payment suddenly jumps from $2000 per month to over $3000 per month, what do you think is going to happen?" van Dijk asks.

The next wave of foreclosures is going to have much higher average loan balances, so each foreclosure will hurt banks more than subprime foreclosures did.

This is going to be a huge problem, van Dijk says. Unlike sub-prime mortgages, these were for the most part targeted at more upscale homeowners, including high-end gated communities.

The borrowers who live in these communities — which have avoided the full impact of the housing crisis — will become the central players this time around.

http://moneynews.newsmax.com/headlines/option_arm_adjustable/2009/05/21/216954.html

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#2) On May 22, 2009 at 8:36 PM, RonChapmanJr (74.46) wrote:

You are making a call for something to happen in 1999.  That is pretty neat considering how time usually moves forward...

ron

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#3) On May 22, 2009 at 8:40 PM, alstry (35.42) wrote:

Thanks Ron....even though Alstrynomics is all about being right.....it can be wrong occasionally.....plus I am dating myself a bit.

2009!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! the end of September 2009.....and I havn't even started drinking yet as we pack up for the Memorial Day weekend.

I recently went to a Springsteen concert....still living my glory days in my head.

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#4) On May 22, 2009 at 8:44 PM, RonChapmanJr (74.46) wrote:

I help where I can.  I am planning my ten year high school reunion for this summer so I have '99 on the brain also.  Good year.

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#5) On May 22, 2009 at 8:48 PM, alstry (35.42) wrote:

For me it would be closer to 1899......and if I am going to correctly stand corrected...it might as well be from a Harvard grad....even on a Friday night.

Maybe I should change it to 509 by 909????????????????

That is where Ghoser's buddies are hanging out.

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#6) On May 22, 2009 at 9:36 PM, TMFJake (58.78) wrote:

I wish we could go back to the S&P in 1999. :)

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#7) On May 22, 2009 at 9:46 PM, alstry (35.42) wrote:

Now we have a Stanford grad......damn...do I feel underachieved.

Think about this....where could a prick like Alstry have access to such talent anywhere on the net.....and at no charge....

gotta luv CAPs.....

where is deej when one is in a good mood??????

Now its time for a drink.

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#8) On May 22, 2009 at 10:28 PM, awallejr (81.55) wrote:

"The Institute of Alstrynomics is making its first official forecast that the S&P will trade at or below 555 before the end of September 1999."

Even when you "past post"  your predictions you get them wrong ;p  Better switch to scotch.

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#9) On May 22, 2009 at 11:14 PM, alstry (35.42) wrote:

The Day of RECKONING has ARRIVED!!!!!!!!!!!!!!!!!!!!!!!!!!

SACRAMENTO, Calif. – The day of reckoning that California has been warned about for years has arrived. The longest recession in generations and the defeat this week of a package of budget-balancing ballot measures are expected to lead to state spending cuts so deep and so painful that they could rewrite the social contract between California and its citizens. They could also force a fundamental rethinking of the proper role of government in the Golden State.

"The voters are getting what they asked for, but I'm not sure at the end of the day they're going to like what they asked for," said Jim Earp, executive director of the California Alliance for Jobs, which represents the hard-hit construction industry. "I think we've crossed a threshold in many ways."

California is looking at a budget deficit projected at more than $24 billion when the new fiscal year starts in July. That is more than one-quarter of the state's general fund.

This week, voters said they no longer want the Legislature to balance budgets with higher taxes, complicated transfer schemes or borrowing that pushes California's financial problems off into the distant future. In light of that, Republican Gov. Arnold Schwarzenegger has made it clear he intends to close the gap almost entirely through drastic spending cuts.

The governor's cutbacks could include ending the state's main welfare program for the poor, eliminating health coverage for about 1.5 million poor children, halting cash grants for about 77,000 college students, shortening the school year by seven days, laying off thousands of state workers and teachers, slashing money for state parks and releasing thousands of prisoners before their sentences are finished.

"I understand that these cuts are very painful and they affect real lives," Schwarzenegger said. "This is the harsh reality and the reality that we face. Sacramento is not Washington — we cannot print our own money. We can only spend what we have."

He also has advocated selling state assets to raise cash, including the Los Angeles Memorial Coliseum and San Quentin State Prison.

The Democrats who control the Legislature do not want major spending cuts, but so far they don't have a plan for closing the deficit. And if their solution is higher taxes and more borrowing, they will probably not have enough Republican votes to get the two-thirds approval needed for passage.

The crisis is a sort of political comeuppance for Schwarzenegger, who took over a state with a projected $16 billion gap in 2003 and promised to end California's "crazy deficit spending."

The gap has two primary causes: The state has been living beyond its means for years by spending generously on all sorts of programs that the voters, the politicians and the special interests wanted. And the recession has hammered California's economy.

Personal income declined this year for the first time since 1938 and unemployment is 11 percent, one of the highest rates in the nation. Nearly $13 billion in tax increases and $15 billion in cuts enacted earlier this year, as well as billions in federal stimulus money, have not been enough to make up for the drop-off in revenue.

"This is the year everything has fallen apart," said outgoing Assembly Minority Leader Mike Villines, a Republican from the Central Valley. "We don't have an alternative. We're literally at the day of reckoning and have to cut it all out."

The drastic cuts that appear to lie ahead will, by accident, accomplish the stark reduction in state government that many Republicans have long advocated.

"We should have been limiting the growth of government for years," Villines said.

The crisis also has prompted talk of a complete overhaul of the way California government operates.

A group of business leaders and good-government groups has begun the process of calling for a convention to rewrite the California Constitution.

A separate commission is expected to release a proposal to rework the state's tax structure, which is vulnerable to booms and busts in California's economy because it relies heavily on high-income earners. The state also has few limits on what state government can spend and a small rainy day fund that can easily be raided by the politicians.

Former Assembly Speaker Bob Hertzberg, a Democrat who has joined a group seeking to change the state's budget system, said too many services that used to be performed by local governments have been taken over by the state because of a landmark 1978 ballot measure that drastically limited property tax revenue. Hertzberg said the programs, and the money, need to be sent back to counties and cities.

"The real problem of California is that we need to bring government closer to the people, so that the role of the state is much narrower. We need to focus on big-picture stuff," he said.

In the near term, the huge cuts that are about to hit will probably affect nearly every one of the state's 38 million residents. Schwarzenegger's latest budget proposal, for example, would eliminate health care coverage for more than 2 million people, about 1.5 million of them children, said Anthony Wright, executive director of Health Access California.

"It would place their families in financial jeopardy for any ailment, injury," he said. "A child won't be able to see a dentist if they have a toothache or see a doctor if they don't have the ability to see the blackboard at school."

The state also faces a related problem: Every year, California borrows money on the bond market to cover its day-to-day expenses and pays it back when tax receipts flow in. But the tight credit market and questions about California's ability to repay its obligations could make borrowing difficult or extremely expensive this fall.

Schwarzenegger and some Democratic lawmakers have asked the Obama administration for a federal loan guarantee — or what some are calling a bailout. The move would be virtually unprecedented and would require the approval of a reluctant Congress.

http://news.yahoo.com/s/ap/20090523/ap_on_re_us/us_california_day_of_reckoning

Have you prepared?????????????????????

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#10) On May 23, 2009 at 3:20 AM, checklist34 (99.70) wrote:

so the wildly liberal left coast catches up to the consequences of its welfare lifestyle.

has anybody here sat down and calcualted if the S&P can even get to 555?  the way cramer calculated the the DOW can't really get to 5300?  remember that article?

to get from here to 700 S&P many, many, many stocks would have to drop 50% or more, because some stocks just aren't going to drop all that far.  WMT et al. 

To go as much lower to 555...  we'd be talking most stocks 75% down and just hte few stable names holding it up, probably (I havn'et calculated that). 

S&P 1000 is about 99% more likely than S&P 555

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#11) On May 23, 2009 at 10:54 AM, FreundInvesting (29.42) wrote:

checklist:

enjoy your days above 99, they are very limited.

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#12) On May 23, 2009 at 2:21 PM, merrittla (< 20) wrote:

I work in public relations for Verizon Wireless, and would like to provide a response to the story about the Carrollton, Ohio man.

Verizon Wireless apologizes for our mistake. This particular issue has now been resolved. We will work to ensure our exemplary service to our nations first responders is on track, and we remind law enforcement to use our 24-7 hotline for public safety needs.

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