I keep hearing people say that there is "too much negativity out there."

Investors should understand that the way this is typically presented, it is merely an opinion. ("I think, I feel, I believe").

However, I prefer quantitative metrics — hard numbers — to feelings/opinions. Dougie Kass sends along these two data points:

• The cash positions in mutual funds stand at 3.8%, slightly below the 3.9% low established in 1972.

• Margin debt as a percentage of the S&P market cap has
climbed to 2.4%, an all-time high. The previous peak? Early 2000, at the height of the Internet bubble.

 

Data always trumps anecdotal evidence.

~~~

What’s in your wallet sentiment model?

 

Category: Psychology

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

67 Responses to “The Negativity Bubble”

  1. scorpio says:

    and SPY making generational double top. mama.

  2. Pool Shark says:

    Well boys and girls, this is it…

    If you haven’t already raised your cash, it’s too late. Just hang on tight…

  3. m3 says:

    “too much negativity out there.”

    this reminds me of the bush/cheney/rumsfeld junta’s feelings about the media after the “mission accomplished” debacle.

    but you’re right. those numbers showed that sentiment was the *complete* opposite not too long ago.

  4. Bob A says:

    “bad boys bad boys, whatch gonna do?
    watcha gonna do when they come for you?”

  5. Tom says:

    For us newbies, can you explain the significance of the low cash reserves in mutual funds? I’m assuming that what you are suggesting is that mutual fund managers got caught up in the go-go market and didn’t want cash on hand, and that makes them more vulnerable to the stock market fall and contributes to the liquidity crisis. But I have a sense I’m perhaps missing some other significance of this.

    Tom

  6. Bob A says:

    Low cash in Mutual funds: Panic means Redemptions. Redemptions require cash. Cash requires selling stocks. Selling stocks under pressure means lower stock prices.

  7. Marcus Aurelius says:

    What did everyone expect? There’s nothing conservative or honest in our culture anymore. Not politics, not economics or finance, not business practices. When the government says to put your retirement funds into the stock market, it’s time to get out (3 years ago). Thank god my grandaddy pounded that message home at every chance he got. He was a wise, honest, wealthy, conservative man. Got rich during the depression. He’s up there laughing his ass off. I miss him.

    I wish I could say “I told you so”, but nobody would have listened, anyway. Never let your grandchildren forget how we got here.

  8. Pool Shark says:

    Bob A,

    It’s not just stocks…

    Gold has been holding up pretty well the last couple of weeks, but about a half-hour ago, somebody dumped a TON of it; price dropped $10.00 in a matter of minutes.

    Somebody out there needed cash REAL badly.

  9. Bob A says:

    Pop Quiz!

    How many people are going to rush out and buy a house if the Fed lowers .5%???

  10. Karl Smith says:

    Barry:

    Could you post your thoughts on the collapsing IRX. To me its a little worrisome to see all of that liquidity locked up in the 90 day.

    Want to hear what you think.

  11. UrbanDigs says:

    everyone is unwinding assets of all classes in order to meet requirements, margin calls, or just to play it safe and hold cash reserves.

    expect many a hedge funds to go under in near future. Not surprising, but still yet to come out and that news will lead to more days like the past week.

    fun! My only short position is up right now. Sweet Wells Fargo, you rock!

  12. Pool Shark says:

    Bob A,

    And of those who would be willing to run out and buy a house; how many would actually be able to qualify given the tighter credit standards of late?

  13. michael schumacher says:

    lowering rates does’nt help the worthless loans on the books. Until someone or something addresses that then whatever is done is akin to a band-aid on a cancer wound.

    unless all the restrictions that have been added by the lenders in the last several weeks go away…rate cuts will do nothing about stimulating home sales. All it will do is put more money in the brokers pocket so that they can bloat up all those rapidly deteriorating “assets”- or whatever they call worthless loans nowadays.

    Bob- I would not think of buying anything until there is some subtraction of existing inventories. Not going to happen until 09 at the earliest.

    Ciao
    MS

  14. Groty says:

    It’s remarkable how this market is behaving as the mirror image of the upleg that began in July ’06.

    During the ramp up, everyone kept waiting for a pullback, which never materialized, so many people missed the move. During this downleg, it’s been straight down. People have been waiting for a throwback rally to sell into and it never materializes.

  15. Howard Veit says:

    I like to look at things from the laboring guy through the skilled labor guy. When those people lose their jobs we are all screwed. You cannot lay off half or more of the construction labor in this country and maintain a strong economy. The elite Ph.Ds and folks with multiple masters degrees don’t have a clue. None have had their hands dirty since their maids spilled caviar on their Armini smlking jackets. You guys who don’t see the disconnect between the political/media class and the rest of us will win. The country will lose. Note that every one of the hot shot stock guys on the tube this AM thought the “thing” will shake out over the next few “months.” Are we all crazy?

  16. john says:

    Where’s bottom for the Dow? Around 12000 which would be about a 15% correction and mirror what’s been happening in Europe. As long as the corpses keep floating to the surface this turbulence is not going to stop. How long does the gas still inflate the cadavers? 6-8 months. I still don’t see much willingness on the part of the financial institutions big and small to come clean. At the end of the day that’s the only way this going to slow. Ben can put as much cash into the market as he likes if people aren’t willing to lend it, then not much happens.

  17. mhm says:

    “What’s in your sentiment model?”

    At this point I have a solid “I don’t know” rating.

    A good chunk of this down-turn is carry driven (so was the way up) and the sentiment in FX is “sell on rallies”. If you can’t sit out, look for specific companies core strengths and weaknesses. Volatility makes index play right now too risky to my tastes.

  18. Philippe says:

    Whilst tempting to think that panic is the driving force of the markets and paradoxically reassuring to see a healthy reaction to facts. They are few outdated observations which are still valid and puzzling:

    2005/2006
    Banks were manipulating long term interest rates on the downside for the European /US/Japan bonds.
    2006/2007
    Banks and associates were manipulating equities markets on the upside and the theoretical values were more than achieved.
    April 2007
    Speculative funds turned net sellers of the SP and yen purchasers whilst they were largely net buyers of the SP during 2006/2007H1
    The economic background did not justify these markets behaviours.
    The dollar is appreciating the Yen is rebalanced in accordance with the inflation differential with the rest of the world and in accordance with Japan current account surplus.

    As an example among others

    May 11 – Financial Times (David Oakley and Anuj Gangaharin): “Exchange-traded equity derivatives volumes surged to record levels in the first four months of the year in Europe as hedge funds and ‘black box’ traders increasingly sought new ways to boost returns. Equity derivatives, one of the fastest-growing financial products, are also being used more by traditional funds, such as pension and life companies, as they take advantage of European regulations that give them more freedom to invest. Equity derivative volumes rose by 22 per cent, with 127m contracts traded in the first four months of the year on Euronext Liffe, the international derivatives exchange

    Sorry it is difficult to adhere to the theory of spontaneous markets neither to believe that all the recent events were unknown to the markets actors and manipulators and shall we occult the past M&A prices?

  19. scorpio says:

    i think we’ve got to take out at least the rally off the ’06 lows, so down to 125-130 for SPY. the whole year since then to highs was predicated on leverage and the private-equity buyout premium of 25%, both of which are no longer operable.

  20. Peter Davis says:

    Everything’s getting slammed right now. Look at the materials sector – XLB – and the stocks in that sector. Lots of unwinding of positions to raise cash. And it’s no wonder. When the Bear funds went belly up, I read that, at one point, they were levered 80:1!

  21. David Merkel says:

    We can look at margin debt, but we should look at short interest too, for a fuller picture. How is that doing?

  22. Fred says:

    U.S. money market mutual fund assets rose to a record $2.68 trillion in the latest week, the Money Fund Report said on Wednesday.

    Taxable assets jumped $41 billion to a record $2.23 trillion, while tax-free assets rose $29 billion to a record $447 billion.

  23. John F. says:

    I like quantitative metrics too, but wouldn’t capitulation by the reporto-cheerleaders on CNBC indicate a bottom for the stock market?

    ~~~

    BR: I don’t know — what data do you have supporting that assertion?

  24. anon says:

    My prediction is that all markets will show a net loss for the Bush/Cheney years.

    The S&P only needs to shed another 60 points and it is down for the entire Bush administration. The Dow has further to go, because the prices of big oil are holding it up.

    What isn’t factored into this (as near as I can tell) is the effect of one or both of:

    Another hurricane hitting oil and gas on the gulf coast and/or

    Darth Cheney ordering an attack on Iran. That would be the big one.

    !

  25. Mike G says:

    And of those who would be willing to run out and buy a house; how many would actually be able to qualify given the tighter credit standards of late?

    This potential house buyer is waiting until I can buy a house with my T-bill/cash holdings plus a mortgage of maybe 2-3x annual gross income. That’s a long way down from current prices in my city.

  26. techy2468 says:

    I hope i am wrong.

    but if we are seeing so much selling just because of credit problem and a hint of consumer slowdown. I cant imagine how it is going to be with the coming mortgage reset (unless fed lowers rate to 4%) and falling retails due to consumers debt at record level.

    unless all the data about consumer being neck deep in debt is wrong.

  27. ari5000 says:

    Bush/Cheney years…

    c’mon — you have to factor in inflation or these index ‘numbers’ are meaningless.

    Factor in 6% inflation since 2001 and it’s a loss already.

    I think inflation has been much higher. What did gas cost in 2001? Milk? Healthcare? That’s being very generous.

  28. Groty says:

    Just imagine how much worse it would be if all the FED model adherents weren’t out there scooping up bargains.

  29. scorpio says:

    then factor in currency, 50% drop in $ vs Euro since George II came to power. i just got back from Paris. they seem to be doing quite nicely without us, thank you v much, despite our right-wing slamming them forever, and v v expensive for the lowly amurican.

  30. Pool Shark says:

    Yen to 113.965 and rising…

  31. DC says:

    China still hasn’t corrected. How fun will that be? Eff me for listening to the bubbleheaded cheerleaders and letting hope trump logic. To Scorpio’s point I raised a lot of cash but clearly not enough.

  32. Pool Shark says:

    Mike G,

    If your credit is good, and you can arrange a low LTV; you should be able to buy entire neighborhoods with a fistful of dollars in about 9 months.

  33. michael schumacher says:

    Say goodnight Goldman…….

    Good to see the upper crust getting it…..especially since they were the purveyors of it.

    Shoulda kept that put on GS……

    Ciao
    MS

  34. Jay says:

    This preponderance of leverage wiping certain investors out has a precedent from Black Tuesday in 1929. When stocks tanked the margin calls came in and everyone realized how far they’d fallen in the hole. That’s when people started jumping out of windows.

    In their race to the bottom, the CEO class and the GOP have let the economy’s work-ox get poor. Their ability to make money relies entirely on the underlying economic well-being of the vast majority of Americans. If you combine federally-legislated 30% credit card interest, stagnant wages, explosive inflation for real-world consumer necessities, and absurd ARM offerings at a time when interest rates can go only upward, and you have perfect conditions for widespread forclosure and bankruptcy.

    This market is going to go to the bears, period, because the underlying economy for ordinary folks has been very very bad for very very long.

  35. Marcus Aurelius says:

    Posted by: Jay | Aug 16, 2007 12:07:35 PM

    Well said.

  36. Gene says:

    “Data” is plural.

  37. Chaka Khan says:

    “Tell me something good…”

  38. Jay says:

    Oh I forgot something . . .

    The bankruptcy bill. I think they’re going to regret passing that. If you essentially annihilate debtors rather than rehabilitate them, they stop making mortgage payments and consumer purchases, rather than the previous practice of trying to nurse them back to solvency. It will further destabilize the real estate market by flooding the it with foreclosed homes, which in turn devalues the unerlying collatoral securing the mortgage . . . etc. etc.

    You watch what happens. This will be vicious because the creditors will bleed a huge number of people dry, and at a time when most people are two months away from bankruptcy. They’re going to whip this dead horse deader because they haven’t any sense, but they can’t stop riding it either.

    I don’t see anywhere to hide in the market, either, and am beginning to wonder what conditions could produce a run on the banks.

  39. sccofer says:

    Jay nailed it, very well put….

  40. Jay: A-yep. It’s been bitterly amusing to watch idiots like Ben Stein talk up how wonderfully well the economy’s been doing when real wages have — aside from the brief respite during the Clinton years — been dropping steadily ever since 1974.

    History repeats itself. The Great Depression actually started round about 1921, when the farm market crashed after European farms got back into production after World War One. The one thing that saved many farmers from literal starvation was Prohibition: Making moonshine (as the farmers in Stearns County, Minnesota did with their famous “Minnesota 13″ whiskey) kept a lot of farms from going under back then.

    But of course this didn’t hurt the Wall Streeters one bit, so they never noticed.

  41. Jay: A-yep. It’s been bitterly amusing to watch idiots like Ben Stein talk up how wonderfully well the economy’s been doing when real wages have — aside from the brief respite during the Clinton years — been dropping steadily ever since 1974.

    History repeats itself. The Great Depression actually started round about 1921, when the farm market crashed after European farms got back into production after World War One. The one thing that saved many farmers from literal starvation was Prohibition: Making moonshine (as the farmers in Stearns County, Minnesota did with their famous “Minnesota 13″ whiskey) kept a lot of farms from going under back then.

    But of course this didn’t hurt the Wall Streeters one bit, so they never noticed.

  42. daver9 says:

    so what do I do? Move my fidelity mutual from 2/3 stocks to 2/3 bonds?

  43. mjshep says:

    Mr. Schumacher has exposed the problem:

    “…the underlying economy for ordinary folks has been very very bad for very very long.”

    This is the real difficulty we face. Making matters worse this situation has been both ignored and lied about for a very very long time.

    Only two things wipe out excessive debt absent a real explosion in productivity and value (which ain’t gonna happen): One, massive defaults, and two, massive inflation making the debt worthless. Either can be extremely painful.

    The political repercussions of this will be as disruptive as the financial ones as the former middle class begins to realize that their so-called representatives have been both lying to them and working against their interests for a long time.

  44. bushtroll says:

    Isn’t it time we cut taxes to stimulate growth?

  45. bartkid says:

    >I keep hearing people say that there is “too much negativity out there.”

    There is NOT ENOUGH negativity out there.

  46. Methinks the HUI might be near a bottom or at one. Hanging in there now.Think Homestake here. Gold Stocks. I’m not a doomer and gloomer here but I reckon structured finance might have an undocumented feature. It don’t rain. It pours… Lota good points dude.

  47. Cameron Dean says:

    Barry, thank you for the best damn finance blog on the web.

    Folks, maybe I am a complete idiot but I just moved 100% into equities. I was sitting 50% on cash till today.

    Why the move?

    First, I can’t call the bottom of this, and am not going to try to, so I don’t want to miss out when everyone comes to their senses.

    Second, markets ALWAYS over react, why should this time be any different.

    Third, the overwhelming majority of bear markets begin with a whimper, not a bang, as we are seeing here, i.e., I see this as a correction, albeit, an enormous one.

    Finally, there is a saying that Ken Fisher (of Forbes fame) uses that I ascribe to: “You can’t catch fish if you aren’t fishing.”

    One caveat, though, I should mention… I am an investor (long-term), not a trader. If I were a trader I would view what is taking place entirely differently.

    One final note: I have read several recent polls of the nations small business community which indicate optimism for sales through the end of this year and into the next. These folks should know better than anyone, especially the professional wonks who are self described experts on the economy. I trust the man on the street; not the “expert” setting in a skyscraper in New York or Chicago. Best of luck to all.

  48. Jay says:

    1. so what do I do? Move my fidelity mutual from 2/3 stocks to 2/3 bonds?

    I wondered the same thing, and thought a money market account would be safest. But I came to find out that Fidelity’s “Cash Reserves” doesn’t exclusively invest in short-term maturity (48 hours) U.S. Government debt–it also invests in commercial paper, which is rapidly becoming worthless. The prospectus also no longer gives any idea of the maturity rate. Unbelievable! These are supposed to be safe places to park your money. I can see a scenario where even some money market funds’ price goes below $1. That would be like watching rivers flow upstream.

    2. If you’re invested in bonds, think about what a rate increase or a rate decrease would do. If it increases, it drives the price of the bonds down. You’re screwed. If the interest rate decreases–a more likely scenario–it feeds inflation. Do we really need more inflation when consumer prices for commodities have skyrocketed? You’re screwed.

  49. wunsacon says:

    It’s what Jay said.

  50. michael schumacher says:

    Mr. Schumacher has exposed the problem:

    “…the underlying economy for ordinary folks has been very very bad for very very long.”

    even though I have thought that and stated that several times I cannot take credit for that statement……It was in Jay’s post.

    Jay and Spectre need a web site….don’t you agree??

    Ciao
    MS

  51. Ralph says:

    Gold has been holding up pretty well the last couple of weeks, but about a half-hour ago, somebody dumped a TON of it; price dropped $10.00 in a matter of minutes.

    I don’t think a ton would have quite that effect.

  52. wunsacon says:

    MS, yes, you and other regulars have been saying similar things.

    Too bad I’ve been half-agreeing with the bulls about liquidity and wanting to stay mostly long. I’m now -1% YTD but should’ve been shorting leveraged/risky names like I’m sure some of you did.

  53. Winston Munn says:

    I thought these comments from John Hussman worth sharing:

    “Indeed, a variety of systems, both in the physical world, and in networks, display a “signature” prior to chaotic instability, similar to how tremors precede earthquakes. These signatures are sometimes measured in terms of very arcane features, but in the stock market, you can observe it prior to other historical panics and crashes as a combination of surging trading volume coupled with rising volatility at increasingly short frequencies (so that the time dimension “collapses,” and you begin to observe fluctuations in 10-minute, 1-hour and 1-day periods that would normally take several days, weeks, or even months).”

    So if there to be a crash, there should be some degree of forewarning…hopefully.

  54. michael schumacher says:

    ;-) you bet I did…….all the signs were there…and have been. My wife thinks I should be trading for eventualities a year out.( I’ve been regulary warning against this reality since the GSCI trick from last year)…that’s not trading that’s “investing”…something I try not to do if I can help it*

    * all you traders know what I mean…

    Ciao
    MS

  55. The Rumor BubbleBlow-ups, Meltdowns, Emergency Announcements, Warnings: Wall Street Rumor Drunk From Sipping On The Product of The Grapevine

    Today might not only be one of the most violently volatile days on the market. It’s also one of the most rumor swept. We’re hearing more rumors with more names attached than anyone could possibly check or even keep up…

  56. miami says:

    Mutual funds no longer need to hold ‘cash’ as they did in 1972, they can hold VG money market funds or the like instead, or T-bills. Why would they hold lower/0%-yielding cash??

  57. Frank says:

    The BEA gets a chance to restate GDP every 4 years. On July 27th GDP for 2003, 2004, 2005 and 2006 was restated downward. The cause of the decline in GDP was reduced household consumption. Households are in better shape than what is widely held to be true. I have no doubt that if the rich, because of their greed, kill the goose that lays the golden egg the poor will get blamed.

  58. Tom G says:

    Rich Republicans always get greedy. Poor Republicans vote and support this crowd because they just know they are religious and patriotic. But this time instead of the Savings&Loan land swindle it was hedge funds and nothing down housing loans. In passing worth noting that the Bush family was involved in both episodes. Well, we get to see nearly a trillion dollars in unsecured paper go up in flames.

    It appears that the Fed can drive down interest rates but that will send the US dollar into a tailspin. That means inflation since we import almost everything.

    This too will pass, but in the interim it looks like a lot of pain will have to be endured. Most likely by the lower/middle classes while the elites may have to downsize the executive jet and tie up the yacht for several months.

    History does repeat.

  59. Fealoth says:

    Wow. WOW. I’ve never seen a greater level of complete and total ignorance, married to an absolute hatred of capitalism. That said…

    How does the author know what the cash on hand for Mutual Funds is, since that data isn’t even available to investors but for the odd prospectus/dependent-on-fund-company update? Does he personally know the managers, has he looked at the levels, does he know what the flow is? Does he even know how this thing works?

    And why in God’s name are you people cheering the ‘common man’ getting soaked during this derivative/margin shakeout? I don’t get it. It’ll go down, and the idiots that try to make a killing in 30 days will go away, and the longs will be fine, just like they always are if they’re smart.

    By the way, who is this ‘ordinary man’ I keep hearing about, who is so much worse off? Perhaps you should go back to 1970 and look at the size of the “ordinary man’s” house, or count the cars in his driveway, or go inside and see how many televisions, microwaves, computers, etc they have.

    Seriously. Stop whining.

  60. Mr. Donut says:

    “By the way, who is this ‘ordinary man’ I keep hearing about, who is so much worse off? Perhaps you should go back to 1970 and look at the size of the “ordinary man’s” house, or count the cars in his driveway, or go inside and see how many televisions, microwaves, computers, etc they have.”

    It’s the same ordinary man who is up to his @ss in debt thanks to buying that huge house at a price driven to unreasonalbe heights by both speculation and rank greed, and who thought he was being sly when he pulled out all the equity in that overvalued house to buy all those consumer goods like televisions, microwaves, computers, and now has a mortgage that’s ridiculously lopsided becuase his mortgage ain’t shrinking but his home’s market value sure is…not to mention all those cars in the driveway in the brand new subdivision that has zero retail within walking distance, so therefore in order even buy a gallon of milk and loaf of bread for his kids, that ordinary man has to fire up his 10 mpg-eating SUV, while gas is hovering at $3 a gallon, and so are MILK and BREAD, for god’s sake.

    As mentioned above, it’s the same ordinary man who also pays out the same aforementioned @ss for health care that only covers catastrophy, and even the worth of that commodity is questionable, so that WHEN – not if – the s%#t really hits his fan, now has a big problem filing Ch. 7 or even a debt reorg in Ch. 13 to get his finances in order.

    Are you seriously that dense or just that cloistered from reality?

  61. Gary Denton says:

    In order for mutual funds to buy they must hold cash. They don’t right now. Low cash reserves are a sign of a market top. Another sign is high margin debt. A high percentage of people have borrowed on anticipation of the stocks going up. When they go down – margin calls.

    That is an extremely low amount of cash reserves for mutual funds. As Bob A said, the mutual funds would have to sell stocks to meet redemptions. But with few buyers the price adjustments are severe. Then there are the automatic program trades that kick in when the trend of the stock is no longer up, not touched upon yet. Momentum players are much more common than value traders.

    Based on some friends in the real estate info business, when this month gets reported housing sales will have a record decline – a crash. Banks and mortgage companies are pulling out of contracts before closing right and left, almost regardless of credit history.

  62. Fealoth says:

    Mr. Donut, I am unclear. Are you talking about the mythical ‘Ordinary Man’, or are you describing your own situation? I infer from the speed at which you made this personal and started calling me dense that perhaps this situation hits a little too close to home for you. Sorry about the SUV you bought, and the crappy development with no shopping. Maybe next time your kids will get a smarter daddy who doesn’t try to keep up with his neighbors and instead focuses on taking care of them.

    It’s not my fault if you overextended yourself in a mad quest to achieve mediocrity. The majority of the country seems to be doing OK with the loans, and if the few and the stupid continue to fall off the cliff, I can’t imagine that the long term effects will be much beyond a distinct drop in the traffic of cheap waterbeds and low-end HDTVs.

    Seriously, what kind of idiot takes a loan out of his house to buy a TV? You deserve whatever you get. Stop blaming the world

    Don’t worry kids, daddy will figure it out. You just won’t be going to college.

    By the way, those who can’t spell ‘catastrophe’ are doomed to encounter it.

  63. Mr. Donut says:

    Nice! If you need to go to the inconsequential spelling error when you’re caught with your pants around your ankles, so be it. Bully for you. You sure put me in my place, Pops. Thanks for the life lessons, too. No really. It must be amazing to be you, what with the kind of powers of intution you have to suss me out like that. I’m impressed.

    I’m sorry that you don’t know or even know OF any people like I’ve described and I apologize that you took it personally that I facetioulsy asked if you were dense. I understood you are not stupid. Feel better now?

    But let’s think in simple terms here, okay? At a time when real wages have been falling or are simply stagnant for many, many American households, I can probably stand just about anywhere, throw a rock in any random direction, and likely hit someone who’s been using (previously easy to obtain) HELOC to fuel their consumer spending.

    It’s been so common, it really is kind of laughable that you would act like this is a mythical person. Hence my comment.

    Anyway, easy credit and the bubble no doubt gave a lot of people the illusion of having upper middle class status these last few years. As you intimated, after all, in our culture a lot of people think the more shiny baubles you have, the more successful you are (or at least appear to be, and obviously you understand that appearances are very important to some people).

    But let’s be careful now, Dad, because any inferences you are trying to draw that I wouldn’t agree with you about personal responsibility? Well, come on now, you need to admit that those are solely the product of your obvioulsy limited and spiteful imagination – don’t you? You sound like a freakin’ Rush Limbaugh drug-fueled monologue, for god’s sake.

    In truth, you and me will agree that people who acted in poor judgement regarding their use of credit now need to suffer the full consequences of their bad decisions.

    That said, I also want to see the entities who extended these amazingly STUPID amounts of credit have to own up to their personal (or corporate, whatever you like) responsibilities as well. So, you can try to point the proverbial finger of shame all you like at me, thinking I’m one of these people who was given easy credit that they had no business getting, but maybe the difference between you and me is really that I am not willing to lay all the blame solely at the ‘ordinary guy’s’ feet?

    Just a thought.

    Whatever.

  64. Fealoth says:

    Donut,

    I don’t know if you’re moving the goal posts on purpose or if you simply lost your place in the discussion. I had only two points, really, and those were:

    1) The guy that was babbling about mutual fund cash holdings doesn’t know what he’s talking about.

    2) The ordinary guy, regardless of how you want to define him, is in better shape than his counterpart from the 70′s. This horse crap about real wages or whatever it is you want to call it is statistical taffy and I have no truck with it. You can inject HELOC discussions into the fray, and assume that anyone with more than one car is up to his armpits in depth, but you’ll simply be wrong.

    I had a small point in between those two, but it was only there to point out that some of the guys screaming about Bush or the Republicans in one breath were then cheering as investors got washed out. Our friends and neighbors are investors. Why are they cheering that people’s 401(k)’s are getting blown up? I then pointed out that it’s moot, because after the specs get washed out we’ll be back to 14,000.

    I clearly never intimated that the idiot up to his eyeballs in debt doesn’t exist. In fact, I told you explicitly that he does indeed exist, and is wolfing down cheap TV’s and trashy furniture as we speak. I challenged instead the idea that the ‘ordinary man’ is in some kind of horrible downward-spiraling limbo here in Amerikkka. It’s just not true.

    Please reread the previous posts and make sure your points and counterpoints are pertinent.

    As for your surprise and shock that I might respond to you ‘facetiously’ calling me dense, you might want to work on those interpersonal skills if you don’t see that it might be obnoxious to say something like that.

    You have thrown up some other flimsy arguments, but I am happy to say that they had nothing to do with my previous points, and thus I will bend like a reed in the face of such hot winds.

  65. Fealoth says:

    Donut,

    I don’t know if you’re moving the goal posts on purpose or if you simply lost your place in the discussion. I had only two points, really, and those were:

    1) The guy that was babbling about mutual fund cash holdings doesn’t know what he’s talking about.

    2) The ordinary guy, regardless of how you want to define him, is in better shape than his counterpart from the 70′s. This horse crap about real wages or whatever it is you want to call it is statistical taffy and I have no truck with it. You can inject HELOC discussions into the fray, and assume that anyone with more than one car is up to his armpits in depth, but you’ll simply be wrong.

    I had a small point in between those two, but it was only there to point out that some of the guys screaming about Bush or the Republicans in one breath were then cheering as investors got washed out. Our friends and neighbors are investors. Why are they cheering that people’s 401(k)’s are getting blown up? I then pointed out that it’s moot, because after the specs get washed out we’ll be back to 14,000.

    I clearly never intimated that the idiot up to his eyeballs in debt doesn’t exist. In fact, I told you explicitly that he does indeed exist, and is wolfing down cheap TV’s and trashy furniture as we speak. I challenged instead the idea that the ‘ordinary man’ is in some kind of horrible downward-spiraling limbo here in Amerikkka. It’s just not true.

    Please reread the previous posts and make sure your points and counterpoints are pertinent.

    As for your surprise and shock that I might respond to you ‘facetiously’ calling me dense, you might want to work on those interpersonal skills if you don’t see that it might be obnoxious to say something like that.

    You have thrown up some other flimsy arguments, but I am happy to say that they had nothing to do with my previous points, and thus I will bend like a reed in the face of such hot winds.

  66. Margin Debt Mutual Fund Cash Levels Dont Matter

    Last Thursday, Barry Ritholtz wrote in The Big Picture about two data points sent in by Doug Kass:

    • The cash positions in mutual funds stand at 3.8%, slightly below the 3.9% low established in 1972.
    • Margin debt as a percentage of the S…

  67. Fu King-Her says:

    The August NYSE Margin debt numbers are out.

    July: $381,370
    August: $331,370

    If you cant tell who is the fool in the stock market – its you.