Jim Cramer new video. Just walk away and Plow the Inland Empire

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bltserv_IHB

bltserv_IHB

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<p>This is not going to help the market and any cofidence that was left about RE.</p>

<p>The NAR guys are really going to be pissed with Jim for awhile.</p>

<p><a href="http://www.youtube.com/watch?v=c7e9H4zTqk4">http://www.youtube.com/watch?v=c7e9H4zTqk4</a></p>
 
I just watched this video. It was also posted on the headlines thread.





EVERYONE SHOULD WATCH THIS VIDEO!!!





Did you all like the realtor speak with all caps and three exclamation points?
 
Jim Cramer is a lunatic whose supposed stock picking prowess has been repeatedly disproven. In fact, it has been proven that doing the opposite of what he says to do would result in higher returns. So if he says housing is going bust, I'd take that as a sign that it's on the mend.
 
Yeah, I certainly wouldn't follow his advice on stock picks. I saw a great March 2000 column he wrote telling everyone to buy technology.
 
Hmm....the voice doesn't match up w/ the video for some reason....but I'd have to disagree w/ Cramer on a few points. There are many places in the country w/ significant price increases over the past year including parts of Utah, Idaho, Seattle in addition to the ones he mentioned. However, I agree w/ his general argument that we're headed for a pretty serious correction.
 
<p>>>>Jim Cramer is a lunatic whose supposed stock picking prowess has been repeatedly disproven. In fact, it has been proven that doing the opposite of what he says to do would result in higher returns. So if he says housing is going bust, I'd take that as a sign that it's on the mend. <<<</p>

<p>No doubt. </p>

<p>He did mention the Fed. I firmly believe there that before this story is over the Fed will significantly lower interest rates to save the day.</p>

<p>You can't have it both ways. If housing is as bad as we all think it is, it will greatly affect the economy, and the Fed will be forced to act. And what about inflation? They will slowly shift everyone's attention away from inflation in order to lower rates. </p>

<p>Also, with all the worries in the equities (and housing) market, the bond market futures is now pricing in a 86% chance of a rate cut by the end of the year. It was 26% a week ago.</p>
 
Great cut rates and you just put off the inevitable. Lots of people refinance to more ARMs without and increase of income or cash to actually decrease their mortgage obligations. It's very simple, people especially here in Southern California can not afford their houses even if their incomes increased 50%.





If the Fed were wise they would let the market determine the survivors and allow it to adjust accordingly. I might be wrong but if the Fed artificially cuts rates like this with inflation teeter-toddering on the upper limit could we not expect the odds to increase of something similar that happened in South America years ago where they had hyperinflation?
 
I have a hard time imagining the rate cut scenario is going to come to pass. The dollar has been dropping against every major currency in the world. Recently it even started dropping against the yen. As our currency devalues, the cost of imported goods will rise which will be very inflationary. Unless the FED says "we no longer care about inflation" interest rates will have to rise.





IMO, the FED will keep rates as low as they can and allow as much stealth inflation as they can get away with as long as it doesn't start to register in the CPI. Once the CPI numbers start to rise, the FED will act by raising interest rates.
 
<p>Here is thestreet.com <a href="http://www.thestreet.com/funds/smarter/891820.html">link</a> for the video. A little bit different compared to the link above. </p>

<p>Here is the link that IR mentioned <a href="http://www.thestreet.com/funds/smarter/891820.html">The Winners of the New World</a>. I wouldn't say go the opposite of what he talks about because I have seen it go both ways. I will say it doesn't even seem like it was six months ago he was touting Countrywide and his good buddy over at KB Homes. I think there is a website that tracks his performance. The one good thing he says is to do your homework. If you do then you wouldn't been bullish on CFC and KBH like he was. </p>
 
<p>>>>I have a hard time imagining the rate cut scenario is going to come to pass. The dollar has been dropping against every major currency in the world. Recently it even started dropping against the yen. As our currency devalues, the cost of imported goods will rise which will be very inflationary. Unless the FED says "we no longer care about inflation" interest rates will have to rise.





IMO, the FED will keep rates as low as they can and allow as much stealth inflation as they can get away with as long as it doesn't start to register in the CPI. Once the CPI numbers start to rise, the FED will act by raising interest rates. <<<</p>

<p>I guess this is when we will see what Bernanke is made of. I believe the pressure will be too great for him to stand still. </p>

<p>There is no chance he will raise rates. We are printing money at the fastest rate in recent years. This makes me question that they are taking the hard line against inflation.</p>

<p>They fabricated the deflation argument in order to cut rates to get us out of the 2002 recession, and I'm a believer (or I guess you can say non-believer!?!) in our government to do the same thing again.</p>
 
<em>"There is no chance he will raise rates."</em>





I see it the other way. It will be interesting to see which way he goes. He obviously has compelling arguments for either direction.
 
Either way, I think we're still screwed.. even if rates are lowered, property values have already dropped and many are under-water if 100% was financed. With the credit standards back to where they should have been, I don't think many homeowners who qualified for sub-prime would qualify to re-finance at lower rates.

<p>

I guess it's more about minimizing losses, lowering rates could help spur commerical lending and inspire some itty bitty confidence in the RE market, but it won't be nearly enough to bail out everyone. The only way to do that is if the market starts appreciating... highly unlikely.
 
IrvineRenter.....I guess we will have to agree to disagree. IMO sometimes you have to sacrifice a few to save the whole lot. With oil prices creeping up near $80.00 / barrel and pretty much all the agriculture prices at or near peak prices their is to much at stake to lower rates.





OC_Conservative....at the pace we are printing "money" and if he lowers rates doesn't that just increase the chances of inflation b/c the dollar is worth less and typically that means less foreign investment in T-Notes and Govt Bonds?
 
I know people like bashing Cramer but I like him because he is honest (he will fess up if he called something wrong) and does not claim to be omnipotent. In fact, he put the burden on the investor to do the homework. He'll try to help but it is up to the individual investor to do their homework. This is unlike most other analysts/investment brokers who claim that they know the market inside and out and that you just need to give them our money.
 
<p>I've been around the financial markets for almost 20 years, and what I've learned is that the economy takes front and center stage for the fed. They may say this or that about the dollar or inflation/deflation, but that is only if they have the luxury to do so when the economy is humming along to their (or the public's) satisfaction.</p>

<p>In the late 90's when the economy was pushing the upper limits, they raised rates significantly. In 2002, they lowered rates significantly. They created whatever backdrop was needed in order to do this whether it was the Y2K scare, overspending, inflation/deflation, strong/soft dollar, etc. That's why I have this view that they will lower rates sooner rather than later. The economy will be hurting too much for them not to act if housing is as bad as we think it is. Eventually, companies in many different sectors will blame housing for their weakness in earnings, and layoffs will ensue. When this happens, good bye economy, hello rate cuts. </p>

<p>The average citizen will not care about strong/weak dollar or inflation/deflation when their job is at risk or their home has dropped 40% in value. And the Fed will be there to save the day and eventually ruin everything once again!</p>

<p>The biggest difference is of course now we have Bernanke instead of Greenspan. So maybe things will be different this time. We shall see...</p>
 
OC-Conservative....so is it your view that corporate profits are going to start falling or that housing will have a "greater" impact on GDP Growth vs what the Feds have said / projected over the past couple of months?
 
<p>mino - I think so. Just one measly man's opinion.</p>

<p>On a lighter note!...AHM is trading at the price of a McD's double cheeseburger! The chart doesn't show today's quote of $1.18, down 88%.</p>

<p>MELVILLE, N.Y. (AP) -- American Home Mortgage Investment Corp. said Tuesday it is running out of cash and has hired advisors to consider its options, including selling off its assets.</p>

<p><img alt="" src="http://chart.finance.yahoo.com/c/1y/a/ahm" /></p>
 
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