May 20, 2017

Bill Laggner on a 20-something real estate speculator from Toronto

On a recent NY trip my Uber ride into the city was shared with Lola, a visitor from Toronto.  Our conversation began with why we were visiting the city and her interest in real estate, specifically Toronto where she was an investor in condos along with her brother.  They owned multiple condos, all of which were financed with little or nothing down.  This of course prompted several questions about prices, location and whether or not she was nearing a "flip" of her rented merchandise.  At this point, 20-something Lola looked at me with disdain and the following response: 
"Why would I flip the condos when my brother and I have made several million dollars each and lenders are lined up to lend us more money to but into a project next door?  And the project next door will be incredible because my friend, Drake (rap "artist"), is going to get involved in marketing the project."
After listening to Lola I suggested she read a bit about the US housing bubble circa '05-'08 or take a shortcut and watch The Big Short.  In fact, I emphasized that our firm was one of the most outspoken critics of the central banking inflated housing bubble while profiting from the inevitable demise.  Continuing the conversation about leverage and how it seduces many on the way up while destroying many on the way down it was clear that Lola wasn't interested in my advice.  It reminded me of my trip to southern California in '06, months before the crash in real estate unfolded.

~ Bill Laggner, Bearing Asset Management, May 20, 2017

Brooksley Born on the role of OTC derivatives in the credit bubble

It was my worst nightmare coming true. Nobody really knew what was going on in the market.  The toxic assets of many of our biggest banks are OTC derivatives and caused the economic downturn that made us lose our savings, lose our jobs, lose our homes.  It was very frightening.

~ Brooksley Born, October 20, 2009

Nick Colas: stocks would rally 3-5% if Trump resigned

What would U.S. stocks do if President Trump suddenly resigned? Based on recent price action, the answer is clear: Rally 3-5%, at least, over a day or two. U.S. equities see through the headlines (like the Comey firing) and essentially believe two things. First, corporate earnings are growing nicely. Second, the Republican-led Congress needs to pass tax reform by the 2018 midterm elections.

~ Nick Colas, chief market strategist, Convergex, May 12, 2017

(See "Here's why stocks could rally if Trump heads for the exit, MarketWatch.com, May 12, 2017.)

Jeremy Siegel: the Dow would rally 1,000 points if Trump resigned

If Donald Trump resigned tomorrow, I think the Dow would go up 1,000 points.

One has to remember that the rally since Trump’s election has been based not on Trump’s agenda [but] on the Republican agenda. I would say that 90% of the people, investors on Wall Street, and most of the CEOs, would prefer a President Michael Pence, rather than Donald Trump. So, in a way you know what kind a trouble he’d be, might he have to resign, might he be impeached... all that does not derail the Republican agenda, upon which this rally was based.

~ Jeremy Siegel, CNBC interview, May 17, 2017

(See "Man who called Dow 20,000 says stock market could see 1,000-point surge if Trump resigns," MarketWatch.com, May 18, 2017.)

May 5, 2017

Warren Buffett on the economy (2017)

I don't see anything but a steady rise.

~ Warren Buffett, CNBC interview, May 5, 2017

May 2, 2017

Donald Trump on Janet Yellen and her low interest rate policy

I like her, I respect her…I do like a low interest rate policy, I must be honest with you.

~ President Donald Trump, interview with The Wall Street Journal, April 12, 2017