Jas Jain on Housing Market

Date: Wed, 28 Nov 2007 12:53:42 -0800
From: Jas Jain

CA SFH Median Price, for the Past 6M, Dropping at 30.8% Annual rate; Down 16.8% From Peak In Apr’07



Jas

Jas Jain on Goldman Sachs

Date: Tue, 27 Nov 2007 16:27:28 -0800
From: Jas Jain

11/27/07

“Goldman has definitely turned significantly more bearish on housing and the economy.”

Goldman Sachs on Housing:

http://calculatedrisk.blogspot.com/

Leaders in forecasting are early and followers are late. Then there are what-me-worry clueless who fail to notice that US economy is a disaster that has been waiting to happen for a while. Now, the ball has started to role. We are already in a recession, to be followed by deflation and depression next year.


Commodities bust may already be in the early stage. When the Credit Bubble starts to burst the party is over.

Jas

Jas Jain on Bubbles And Idiots

Date: Tue, 27 Nov 2007 08:11:21 -0800
From: Jas Jain

Bubbles And Idiots (Among Speculators or “Investors”)

Human behavior is highly predictable.

The Bubble phase of any asset class lasts for 1.5-3 years. Smart people get into an asset class way before the bubble phase begins. Idiots get really enthused and interested after the asset class has entered the bubble phase.

Here is identification of idiots among speculators:

• Heavily into and bullish on Tech Scams during 1998-2000
• Heavily into and bullish on Residential RE during 2004-06
• Heavily into and bullish on Commodities during 2006-07

The super idiots are the ones who moved from one bubble (Tech Scams) to the next (RE) to the next (Commodities) over the past ten years.

With the benefit of hindsight, I was way ahead in identifying bubbles and idiots who speculated in Tech Scam and RE. Let us see if I prove to be correct in the case of commodities, because I know idiots who got really interested in commodities and have been heavily speculating in them.

Idiots are great at finding justifications for why the bubble is not a bubble and the price rise is based on fundamentals.


Jas

Jas Jain says "Economists ARE Blind to the Reality"

Date: Mon, 26 Nov 2007 12:22:06 -0800
From: Jas Jain

Markets ARE Screaming Recession, But Economists ARE Blind to the Reality

There was a melt-up in US Treasuries today and the Scam Market not only couldn’t hold the gains but it is tanking.

Vast majority of economists, who have access to the public, get paid to mislead the public. That is what the free market in information is all about.

Jas

Earnings – Very Bad News for Scam Lovers

Earnings – Very Bad News for Scam Lovers

Glossary: Scam Lover = stock market bull (stock markets exist to allow scamming of the public)

David Rosenberg, Merrill Lynch; 11/23/07:

“Financials now represent 30% of the total profit pie -- There is considerable temptation to strip financial-related earnings out of the pie to show how wonderful it is in the other parts of the market (though consumer discretionary isn't faring that much better). But the reality is that financial-related earnings now represent about 30% of the total profit pie versus 25% just three years ago — so stripping out financials is like stripping out California, Florida, New York and Texas from GDP…

“What has been more shocking is reported earnings -- Against this backdrop, what has been more shocking so far in the third quarter earnings season has been the "reported" numbers, which unlike the operating earnings do not strip out the charge-offs incurred. Here the results were even more abysmal as reported EPS plunged 28% YoY, which was the worst print since the fourth quarter of 2002… And, the folks at S&P tell us that the worst is not yet behind us. This is key because in the final analysis, it's nice to talk about "operating" earnings, but it is "reported" earnings that investors pay for. For one, it is hardly clear that these current charge-offs are going to be "non-recurring" — Freddie Mac's writedown is a sign that nothing has really been "kitchen sinked". 3Q goes down as the fifth worst third quarter since 1945…

“When doing the valuation analysis on reported earnings, under the proviso that we see a typical recession/write-down scenario, then the historical record suggests that investors are looking at forward P/E multiple closer to 25x… Moreover, the current $15.29 estimate for reported EPS is the lowest level of earnings since the fourth quarter of 2004. And where was the S&P 500 trading at that time? Answer: It veraged 1,162 that quarter — just in case you were thinking of buying this dip.”

2008 is shaping up to be the year of “Slaughter of America Pigs, China Bulls, and India Goats” to begin in earnest. Are Scam Lovers sacrificial lambs? That question would be fully, and unambiguously, answered by 2010 in the depth of depression.

Jas (Date: Sun, 25 Nov 2007 09:57AM PST)

Recession has been here for a couple of months.

November 24, 2007

“In a piece he [David Rosenberg] put out Friday, he says unequivocally that if you're looking for the earnings recession, you need look no more -- it's here. And with rather a vengeance.”

“Hence, he's ineluctably forced to the conclusion that a recession in the economy "is either here or no more than two quarters away."

http://online.barrons.com/article/SB119586356074702600.html?mod=9_0031_b_this_weeks_magazine_columns

Recession has been here for a couple of months. Scam Market is likely to take additional 20-30% hit from here within the next 12 months. And that wouldn’t be the end of it. Plan and speculate accordingly.

Jas

---

As of 11/24/2007
Symbol Last
DJIA 12,980.88
NASDAQ 2,596.60
S&P500 1,440.70

Update -- Market TOP Watch

If you recall, I made a call for the stock market top on 10/11/07 within minutes of the top based on a sudden sharp reversal on an innocuous piece of news. These were the highs for Dec futures before the reversal:

NDX: 2214.0; SPX: 1586.5; and Dow: 14270.

I also said that when two or more of the above highs are breached my call would be proven wrong. Until then it would stand. As of Friday抯 close here are the changes in the three indexes from the highs on 10/11/07:

NDX -172
SPX -132
Dow -1223

As a matter of fact, the NDX futures did cross above the 2214 level for 2-3 days, but SPX and Dow never even came close. Most likely, the stock market is finally taking the recession threat seriously. I have already declared that the US economy IS already in a recession. Please remember the following sequence:

Recession --> Commodities Bust --> Deflation --> Depression.

Some time in this sequence we will have China bulls and India bulls, or India goats, to be more precise, slaughtered. India goats have been fattened for the slaughter and for the crooks to feast on.

Jas (November 10, 2007 )

PS: Monday could be ugly.

Brazilian bombshell Giselle: 1 GOOG = 1 Oz. Gold?

GOOG is the greatest American story never told. Brazilian bombshell Giselle, who has refused to accept payment in US$ has agreed to accept GOOGs. A girl who knows the full value of her body surely knows what is precious and what is not. Even Iran and Russia are considering selling oil for GOOGs.

Sell you gold and buy GOOGs. More importantly, sell your home, a depreciating asset, and buy GOOGs that are appreciating faster than gold, crude oil, or any other hard asset. Gold can be mined and GOOGs can抰.

Buy GOOGs and keep America great!

Jas (via email 8:29 AM 11/06/07)

• GOOG is the ticker symbol for Google
  Click to view larger chart

Jas Jain says "US banks now hiding toxic paper"

Again, Jas Jain predicts a depression. The same prediction he made when I met him in 1998. He has been wrong about the stock markets but, to his credit, he was correct about the monkey business at Silicon Valley companies using stock options such as back-dating of options.

> From: Bruce
> To: "Jas Jain"
> Subject: Re: CountryFried Financial: "Toxic waste, finger lickin' good
> Date: Thu, 1 Nov 2007 09:08:22 -0700
>
> US banks now hiding toxic paper and related losses as the Japanese did in the '90s.
>
>
> http://ap.google.com/article/ALeqM5ihXHMrpUHdtown-KAdgh7Lvu040wD8SKPTT01
>
> This is a SIGNIFICANT development, Jas. China's central planners have lost control of a runaway economy and stock market bubble, fueled increasingly by US firms' massive investment, as well as speculative inflows in the past 12-18 mths.
>
> 10-11% real GDP growth is not only unsustainable but suicidal at this point with growing constraints, rising inflation, and social unrest: a runaway train at terminal velocity headed for a cliff.
>
> A hard landing in China-Asia, global recession, Asian Crisis II, and firming or rising US$ ahead.
>

Thanks, Bruce.

Can you spell G-R-E-A-T-E-R D-E-P-R-E-S-S-I-O-N?

I will keep my promise and deliver one! Pregnancy lasted longer than the usual, but it is going to be 15-pounder. A whopper.

Only the born-and-bred American dupes couldn't figure out, all these years, simple scams that banksters were running in the debt business, mortgages being just the extreme cases, with the help of the Fed, agents of the banksters. We have people 搑aised in the culture of fraud� in control of our financial system and the outcome was never be in doubt. First, Scam Options and now the Toxic Mortgages. Why regulate the free market. The crooks have pushed things to the extreme, as one would expect them to.

How to screw an American? In the name of freedom! Put crooks in-charge of loaning other people抯 money in the name of free market? I can抰 wait to see how this turns out.

Jas

PS: Sold all the remaining Jan puts on C (toxic financial waste site) and still holding tons of Jan puts on Fraudentials and some recent tech high-fliers.