MERRILL LYNCH + FOX NEWS.

[tailwind]

25 Oct 2007

Today Merrill Lynch announced a massive 8 billion dollar loss, and S&P downgraded their debt. This is just the beginning, as trillions of dollars that Wall Street loaned to American homeowners will never be repaid.

Watch this video clip from Fox News "Cavuto on Business" that originally aired Aug 17, 2007. The exchange is amazing in view of what has just happened. See how I tried to explain to a panel of delusional "experts" why earnings in the financial sector were about to turn into losses. Ben Stein even recommended Merrill Lynch as his favorite stock and lost his cool as I tried to enlighten him and Fox viewers regarding what was about to happen. You just have to see the exchange for yourself to believe it!

http://www.youtube.com/watch?v=6XtQoZAqjc8

On a similar line, this video (originally aired on Dec 29, 2006) of a similar exchange I had on Fox "Bulls & Bears" regarding the impending collapse in the housing/mortgage market must also be seen to be believed.

http://www.youtube.com/watch?v=yoZV5jt9puc

It is important that the public understand just how bad the advice main stream "experts" are peddling. Please forward this email, or the YouTube links to as many people in your contact list as possible and ask them to forward the email to their contacts as well, and so on.

Let's get the word out and hold these clowns accountable for their lousy forecasts.

Peter Schiff
President and Chief Global Strategist
http://www.europac.net

[dysfunctional press]

1. trillions?

do you have something that backs up that number?

[TomClash]

2. It's in today's NYT

At this juncture, economists say the troubles in the mortgage market could, all told, cost financial firms and investors up to $400 billion.

That is far more than the roughly $240 billion cost, adjusted for inflation, of the savings and loan crisis of the early 1990s, according to estimates of the combined financial toll of that crisis on both the federal government and private sector. The loss in total real estate wealth is expected to range from $2 trillion to $4 trillion, depending on how far home prices fall, according to several economists.

That would be significantly less than the losses suffered by investors in the stock market collapse earlier this decade, which erased more than $7 trillion, or about 40 percent, of market value.

Experts caution that these estimates are preliminary and the total costs could get bigger still. They also note that the loss of real estate wealth could prove more damaging for the general public than falling stock values because more American families own homes than own stock.

“There weren’t a lot of people living off their capital gains from stocks,” said Jane Caron, chief economic strategist at Dwight Asset Management. “There were a lot people using their home as a piggy bank.”

Of course, many people who bought their houses several years ago are still ahead financially, because the sharp run-up in home values is still far greater than the expected decline. Those who bought close to the peak stand to lose the most if they have to sell in the near future.

snip

Global Insight, a research firm, predicts that the national average for housing prices will drop 5 percent over the next year and 10 percent before mid-2009, for a total of about $2 trillion. Economists at Goldman Sachs have predicted prices will drop by 15 percent, meaning an overall decline of more than $3 trillion; other forecasters have said the decline could be 20 percent or more.

http://www.nytimes.com/2007/10/25/business/25mortgage.html?_r=1&ref=business&oref=slogin

[dysfunctional press]

4. that's NOT the same as "as trillions of dollars that Wall Street loaned to American homeowners..."

"...that will never be repaid"

what the article is referring to is the loss of value in the real estate market as a whole, due to falling prices- if all the houses in america are worth $50trillion on paper, and there's a 10% contraction in prices- that equates to an overall "loss" of $5trillion- but that's not money that's been lent that isn't going to be repaid.

[TomClash]

5. It is $400 billion

I think the op was arguing that is the tip of the iceberg. Truth is no one really knows.

With a decline in the equity markets, I could see a several trillion dollar loss no matter how you slice it.

[dysfunctional press]

6. i don't doubt that the losses are going to be beyond huuuge...

but the way that op phrased it implied it all as being money that was lent out, and will never be paid back, when that isn't really the case. also- in those cases where the money WAS lent out- it's not like the borrowers are running off with the money- they don't have it, it's "in" the home they bought with it. and when they lose their homes thru foreclosure, they don't have the houses, either.

[TomClash]

8. You're right

. . . but you don't borrow or lend when such an enormous amount of equity evaporates. That could have a devastating effect.

Still, you are correct.

BTW, everyone on Wall Street is VERY worried. And we are in a recession. Those are two facts you can take to the bank.

[tailwind]

9. Look out below folks.

.

[Toots]

3. It is important that the public understand just how bad the advice main stream "experts" are peddlin

This is applicable to everything, not just financial advice. This is in regards to foreign policy and environmental policy, and domestic policy. Everything. These so-called "experts" have not been right er I mean correct on anything. Name any issue and the advice given has proved to be the exact opposite of what should take palce..

[Ilsa]

7. My suspicion is they are peddlig stocks they bought low and

haven't moved. They are trying to drive up the price. Crooks.

[Deja Q]

10. It's just business.

\

[hatrack]

11. What a SAD little coven of stock pimps!

My God, if this is what Fox Business Channel is going to be like . . . look out below, indeed!

On edit - yet another reminder of why I never watch cable business shows. :puke:

[hatrack]

12. K&R

Pure comedy gold, as only Fox knows how!

[tailwind]

13. .

Can't wait to see FOX spews when the next crash happens.