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alstry (36.57)

I just don't get it?????

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March 09, 2009 – Comments (9)

So much of America is insolvent or approaching insolvency due to too much debt. 

Homeowners, Shopping Centers, Office Buildings, Corporations, Municipalities, Pension Funds, and States etc.......you name it, if its leveraged it likely has issues.

Does anyone realize that when you are insolvent, you must restructure to reduce debt.

Restructuring is generally done through one of the various forms of bankruptcy.

When someone or some entity goes bankrupt, generally equity is wiped out completely and debt holders become the owners of the business or home and equity holders get NOTHING.

With this being so clear....why in the heck would anyone want to own ANY equity in a leveraged company in America today with margins decreasing and sales evaporating??????

But the good new is that once we restructure and wipe out the debt.....the opportunities will be HUGE!!!!!!!!!!!!!!!!!!!!!!!!!!!!! in the restructured entities.

DID ALSTRY SAY HUGE????????????????????????????  YUP!!!!   HUGE!!!!!

Can you believe it.....some FOOLS are still talking about a bottom???????

The only thing at the bottom right now is my glass.....time for a refill.

9 Comments – Post Your Own

#1) On March 09, 2009 at 10:42 PM, RodneyFarva (< 20) wrote:

I'm sitting on my bottom......

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#2) On March 09, 2009 at 10:45 PM, homnibus (< 20) wrote:

Pretty cogent

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#3) On March 09, 2009 at 10:59 PM, alstry (36.57) wrote:

It has been so obvious for the past few years....especially with housing......I am still surprised how so few saw it.....especially those guys with IQs a few times smarter than the average person and those guys that went to Harvard....

What is funny is everytime I pointed it out...whether directly or indirectly, so many became so hostile at me and subsequently turned me into an occasionally hostile type person.

You see, Alstry is really a gentle nice sweet person....but there are so many hostile people out there who are clueless that I had to develop a sharper tone as a defensive mechanism and a way to try to forge a path through their thick skulls before it was too late.

I am a people person who loves people.....as a result I did my best to warn them about what was coming.  But instead they threw charts at me relating to historical events that had nothing to do with the present.  There has never been a time in History when the American PEOPLE and BUSINESS were leveraged so much as a percentage of income.

Could you imagine charting dinosaur migration and graphing it to somehow relate to the statisical liklihood whether your neighbor was going to get lucky tonight or not????  I just don't get it but my IQ aint that high and I didn't go to Harvard.

The problem is pretty simple....too many borrowed too much for too long.....now the time is up and the music has stopped.....can anyone spell HANGOVER????

Once it washes through the system...our children will be on a much firmer foundation then we were.......thank goodnesss.

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#4) On March 09, 2009 at 11:28 PM, JGus (28.91) wrote:

Hey Alstry,

I found this website which gives the definitive answer as to whether or not we're at a bottom. After painstakingly thorough research they've reach a rock-solid conclusion that can be taken to the bank. I've linked to the site in this blog:  Is this the bottom?

 

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#5) On March 09, 2009 at 11:30 PM, MikeMark (29.61) wrote:

I see two possible distinct paths.

I see the path to serfdom... which is the one we are currently on.

I see the path to freedom... which will take lots of work and education, maybe even revolution.

Which will you choose?

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#6) On March 10, 2009 at 12:19 AM, milpo (52.87) wrote:

Alstry,

I have copied my response to an optimistic blog about the increase availability of jobs in the healthcare industry below.

I would like to also refer you to my blog earlier on The Tenth Amendment Movement. Do you think this could be beginning of civil unrest and possibly regional currencies?

The ADP job loss report estimate of 697,000 was much worse than the expected fall of 525,000 and the largest loss since 2001. Worse yet, the January report was revised from 522,000 from 614,000.
I saw the president of GE on CNBC Thursday morning telling the world what a wonderful company he runs. For his efforts the stock traded off $0.03 to $6.66. Think of the returns if GE was shorted at $33.49. GE is another Enron, AIG, etc., one of the biggest users of credit default swaps, a large package of toxic garbage.
Moody’s may cut ratings on Wells Fargo and JP Morgan of which should be shorted.  Their derivatives are blowing up. Their troubles are in the trillions.
The 466 companies in the S&P 500 have reported a 58% fall in earnings on average.
On Thursday JP Morgan Chase fell $2.70, a new low, to $16.60. AIG lost $0.08 to $0.35 per share. Citigroup fell $0.11 to $1.02. Wells Fargo fell $1.59 to $10.55 and Bank of America fell $0.42 to $3.17. Imagine the foresight of shorting JPM $39.36; C at $44.10 and WF at $59.65. The blue chips are getting crushed and you haven’t seen anything yet. A 4,000 Dow is a lock. The question is will it hold there”? Honestly, I do not think so. The damage is so extensive it could take ten years for the market to recover. Thank goodness I’m not a broker. Gold was $255 in June 2000 when this odyssey started and we are still a long way from being finished. Hopefully, the banksgters will be lucky to just end up in jail and lose their ill-begotten wealth. Why do you think the intelligent people in the world are buying all the gold they can get their hands on? Gold is the only safety net, the only way out.
Our government calls U6 unemployment at 13.9%. We are now  at 16-1/2% and it is accelerating.
Commercial paper issuance outstanding fell $44.2 billion, to stand at $1.480 trillion. That is down from $2.2 trillion 21 months ago.
Unsecured financial issuance fell $35.9 billion, the biggest drop since a record $93.5 billion five weeks ago.
The FDIC is considering lowering special assessment on banks to 10 bps from 20 bps.
Blackstone (BX), which should have shorted at $38.00 has written down to zero the value of billions of dollars of LBO debt that it bought from Deutsche Bank last year.
Private equity/LBO debt is the unspoken catastrophe waiting to happen to bank balance sheets and pension funds. The highest bid for any of it is $0.70. Banks are sitting on hundreds of billions of it as well.
You heard it here. The entire private equity industry is going to get wiped out and with them the banks and pension funds will be injured as well. Many corporations will get hit as well, such as GE Capital.
The President’s Stimulus Plan has brought little confidence or trust to the market. CEO Magazine’s Confidence Index, broke its own record for the third time in the past four months, 95% rated the current business and employment conditions as bad; 69% don’t expect improvement anytime soon and 77% expect unemployment to worsen over the next quarter.
S&P says that credit quality continued to deteriorate with downgrades leading upgrades 49 to 6 in just the first three weeks of the month. Thus far first quarter downgrades outpace upgrades 14.3 to 1. This will be the worst quarter on record. It was 8.9 to 1 in the first quarter of 2008 and 14.1 to 1 in the first quarter of 2001.
There will be lots of analysts, economists and stockbrokers out of work soon. An estimated 70% will lose their jobs. They will lose 75% of their clients’ assets, as a result of staying the course and telling their dumb clients you don’t have losses until you take them, which is idiotic. They are looking for the rebound that will never come. The feast presented to the financial industry by the de-regulation of the banking industry and the lack of regulation of the derivatives industry is drawing to a close. It is only a matter of time before we get Glass-Steagell back. The greedy crooks in banking and Wall Street are about to be faced with payback. Once we hit bottom and no one knows where that will be, we could drag along the bottom for ten or more years. Recovery depends on whether the Banksters arrange a war for us, as they did in 1941 with WWII. Once the Dow reaches 4,000, a better idea of where we are headed will present itself. It is wake up time. Our standard of living will fall 50% or more. We will revert to a lifestyle that we grew up in the 1940s and 50s. Many will have to walk a mile or two to school in rain and snow. No more bus rides. All those McMansions may become boarding houses. There will be 1 TV in the home and one used car in the garage. Credit will be difficult to get and home purchases will have to be accompanied by 20% or more down.
The business of living from paycheck to paycheck will end. 600,000 or more people are losing their jobs every week. Many have lost high paying jobs, jobs that may never be replaced again. These big hitters are taking any kind of job they can get to put food on the table to delay the inevitable exhaustion of savings. There will be many unhappy people.

And as such, there is no question in my mind that we will need more doctors, nurses, emergency rooms, and medical clinics.  Unfortunately, as the jobs in the health sector increase in number, wages will become depressed due to the incredibly large supply of people needing work.  Assuming, of course, that the whole health system is not nationalized which is its only true salvation. And I'm a surgeon.  Sorry for the protracted comment.  It was the optimism of your post that triggered my response.

Best wishes,

Milpo

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#7) On March 10, 2009 at 12:31 AM, usmilitiadude (32.33) wrote:

The smartest guys in the room didn't get it. Where was Buffet? Even he makes huge mistakes.

Some guys wouldn't know a bottom if Shakira or J. Lo was leaning over their lap and and they were spanking her. dwot might get it, dwot has a different perspective. 

Have fun,

 

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#8) On March 10, 2009 at 8:24 AM, alstry (36.57) wrote:

Milpo,

You see things clearly.  Now if you keep debt low, expenses within line, and maintain a stable outlook.....we will  adjust after some serious adjustments.

Maybe if you were a chiropractor instead of a surgeon, you could adjust yourself,......but if you are married and in a good relationship, have fun adjusting each other...twice or three times a day if necessary.

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#9) On March 10, 2009 at 9:01 AM, Gemini846 (45.50) wrote:

Yahoo coppied an article saying that housing inventories were actually shrinking in certain hard hit areas (FL, CA, MI) but honestly I think this is just the next wave of speculators comming in like vultures. Everyone I talk to says "this is the best time to buy a house" which means normally thats the best time to walk away.

There are too many stupid people in this world for them all to be right.

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