Originally Posted By mawnck I come seeking enlightenment. <a href="http://market-ticker.denninger.net/" target="_blank">http://market-ticker.denninger.net/</a> I keep reading this guy's blog, and have parroted some of his points in various topics here on WE. He seems to be making a frightening lot of sense, but I don't have a real understanding of many of the topics he discusses, and it just hit me that I haven't really investigated anyone on the "other side" of the issue - IE people who think Denninger has rocks in his noggin. My googling attempts this morning failed to turn up anyone refuting his theories. Ignoring, you betcha. Refuting, unh unh. So please tell me, anyone who comprehends all of this ... Is Denninger right? Is the government *really* just trying to reinflate an unsustainable (and still very much inflated) housing bubble to delay an inevitable economic implosion? Isn't this a very, very bad thing? Shouldn't we be forcing the banks to write off their bad debt (and fail if that's where it leads) rather than trying to fix the economy with the bad debt still on the books? And if not, where are Denninger's theories going wrong? Much appreciated.
Originally Posted By andyll A lot of his stuff seems reasonable. I'm not sure I've really heard anyone other then McCain blindly say to prop up home values. Someone has to eat the 10-15% overstatement of housing values. Until that happens the market will not come back. The HOPE program has the Government eating it but when the market comes back up they get paid back. Seems reasonable. Both new and existing home sales were up last month with a ~10% dip in value. That's good news and we'll see if it contniues.
Originally Posted By mawnck >>but when the market comes back up they get paid back.<< I think Denninger's response to this would be that, given that the housing values ARE overstated, on what basis would you expect the market to "come back up"? Another bubble? And where do you get the 10-15% number? Denninger seems to think it's **quite** a bit more than that.
Originally Posted By andyll <<I think Denninger's response to this would be that, given that the housing values ARE overstated, on what basis would you expect the market to "come back up"? Another bubble?>> Real Estate always appreciates over time. <<And where do you get the 10-15% number? Denninger seems to think it's **quite** a bit more than that.>> I would disagree with him. Perhaps in some areas like FL and CA. But overall I doubt it is much more When of my complaints with his blog is he makes a lot of statements but never provides links to his sources. Some areas have always been overpriced and that is not included in my 10-15%. Also many people make the missake by looking median home prices to show the increase of prices and therefore derive the over valueation of it from it. But the higher median home prices were driven by the easy credit and therefore people buying bigger houses and builders building bigger houses. Because of the glut of houses on the market and because a decent amount of them are owned by banks whoed like to dump them the market price % will likely to go lower. But that dosent' mean that those low prices are the true market value housing... in fact for the next year or so the market will probably be under valued making it a great time to get into a house.
Originally Posted By Mr X If you take his stock predictions into account, he's been frighteningly accurate so far (but so have others, and just like him they get brushed aside because noone likes a party pooper)... BUT, he is also an extremist and he engages in hyperbole a LOT. In one amusing case, he actually claimed that somehow the FDIC would "go broke" under the strain (this was sometime last year) and when I sent him an email explaining what being backed by "the full faith and credit of the United States government" actually means, he got pissed and banned me from his site. Still and all, he's made a lot of interesting and deadly accurate observations...anyone who followed HIS stock market advice exclusively over the past two years would be doing a whole lot better than most. For example, he was adamant about short selling companies like Freddie, Fannie, Countrywide and Bear Sterns while at the same time "the experts" were claiming they were ALL "too big to fail". Who was right, after all? Anyone who followed his advice would've enjoyed a near 100% profit in less than a year on ALL of those pics, and there are many other examples.
Originally Posted By mawnck >>BUT, he is also an extremist and he engages in hyperbole a LOT.<< That's the thing. If he wasn't such a foamer, and presented his arguments in a more reasoned manner, he might be doing a bit better in convincing people. Somebody send him a Dale Carnegie book.
Originally Posted By Mr X Exactly. Apparently he faxes and calls his reps too much, as well...to the point where they've written him off as a loon and won't accept his faxes (or something along those lines). He's really sharp though. In fact, after the meltdown he suggested a strategy for McCain that I frankly think might just have won it for him. His strategy? Instead of McCain acting all sad about the crash, he should've gotten super pissed and promise to jail every last criminal who let this crisis occur. Given that McCain spent all his time HOLDING BACK his anger, I think that just might have worked for him. Would've been closer anyway, imho.
