The Lost Decade Plus

Many refer to the economic mess in Japan in the early 1990s, as leading to the lost decade for Japan. Well at the moment Japan is looking at the lost score (you know, as in four score). The new lost decade crowd is here in the U.S. Both the Dow and S&P are back to levels not seen since 1997.

http://www.calculatedriskblog.com/2009/02/party-like-its-1997.html

My last post yesterday asked where the market is going. I noted my belief that we are in a new, lower, trading range and were at or near the top of that range. Today was more proof of that. We are in for a world of hurt with no easy fix. Hunker down.

Disclosures: None

So What Else is New?

Citigroup needing more government support - nope, old news.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aVw5u2ehimYc

AIG needing more government support - nope, old news.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a_Mj2UeRcQRA&refer=home

Banks slashing dividends - nope, old news.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDh7NR3XwXNA&refer=home

Government lying through its teeth in a failed attempt to boost confidence - nope, old news.

http://globaleconomicanalysis.blogspot.com/2009/02/purposeful-joint-lie-by-treasury-fed.html

Car companies on the brink of bankruptcy - nope, old news.

http://www.nakedcapitalism.com/2009/02/treasury-soliciting-bankruptcy-funding.html

I guess history does repeat itself.

Disclosures: None.

Cannot Build It That Cheap

One of the problems facing builders is that excessive foreclosures in certain markets are leading to home prices a good bit cheaper than they can build a new house. In those locations, even when prices stabilize it will be some time before they can build houses for a profit, and even longer before they can do so for a good profit. Expect more home builder bankruptcies. Unfortunately those bankruptcies in some areas will make no difference in competition for those that remain. The competition is banks with foreclosed properties.

http://www.calculatedriskblog.com/2009/02/home-builder-we-cant-compete.html

Disclosures: None