Doctor Housing Bubble 01/19/08

The End of the Tribe of Housing: Breaking Down the National Housing Neurosis.

The market had a capitulation event this week. The Dow Jones Industrial Average fell 507 points to 12,099 essentially wiping out a year of gains. While Boom Boom Bernanke left the alter of Fed-speak and practically told the market that we are in a world of hurt in a moment of candor, it would seem that the market did not like his response since it tanked almost in symphonic unison with each word he uttered. Like an amateur conductor, the CNBC ticker tape did an inverse to the intention that his words were trying to play on the market. Bank of America was off 6.5 percent for the week since it appears that buying junk at low prices does not make you a sage and wise investor. Bond insurer Ambac did a bit of cliff diving dropping a whopping 71 percent on news that it would have its rating slashed. It went from AAA to AA. But at this point investors realize that the rating system is as useless as the Department of Homeland Securities’ now defunct color coding warning system:



This method of keeping everyone in perpetual fear failed because what the hell were you suppose to do if the rating went from green to orange? Or red? What the does general risk of terrorist attacks mean? How do we distinguish between high and severe? It was there to keep everyone in this constant state of fear. In this same fashion the rating agencies were there giving out AAA ratings on practically every company keeping investors in this perpetual delusion that all was well in credit bubble land. As investors realized that ratings meant very little and the downgrades started coming, a domino effect ensued.

It is easy to get overwhelmed by all this data. In fact, it is so confusing you may even mistake the Fed Chairmen for someone else. Bwahaha! Someone thought Ben Bernanke was Hank Paulson. They get that all the time in her defense. When you are tagging up on the dollar and pounding it into submission does it really matter if it is the Fed Chairman or the Secretary of the Treasury who is throwing the punches? It was a moment showing how disconnected politicians on the Hill are with the true economic issues of middle class Americans. Then on Friday we have President Bush rolling out his $140 billion proposed stimulus package that of course, includes tax cuts. You get $500 bucks to blow on boos and pay per view while financial institutions get to write off billions of dollars in bad loans and jump out of Manhattan investment firms with diamond encrusted parachutes. Seems like a fair trade.

The End of the Tribe of Housing

http://www.doctorhousingbubble.com/the-end-of-the-tribe-of-housing-breaking-down-the-national-housing-neurosis/

are we supposed to check it daily? :D