Apologies to our regular readers who came here and didn’t see any new material in almost a week. The KoolAidMan was on another mini-vacation, hitting the slopes in Utah for an adventurous weekend, returning with a minor cold that required some additional recovery time.
One observation the KoolAidMan made, just by looking and listening, was that the housing bubble we’ve grown to love is much bigger than most people imagine. Stay tuned later in the week for the exact details.
Today is one of those days where there’s some mainstream news that makes this post’s title worthy of sharing the name of this site: DRINKING IS BELIEVING! CNN is reporting that Wall Street analysts are living in a fantasy land (and drinking the fruity red liquid).
Maybe Wall Street analysts are more honest and less compromised than they were pre-SarbOx, but recent events show that they’re still awful at their most important job: predicting bad news. They haven’t lost their habit of falling in love with the companies they cover and refusing to face unpleasant realities until everyone else has already done so. Now, eight years after they were inflating the bubble, we again have to question whether analysts do retail investors any good.
The latest evidence: Analysts have only just discovered that corporate profits in the fourth quarter aren’t going to be nearly as strong as they had supposed a month or two ago.
Drink, and ye shall believe! In other news, Morgan Stanley is writing off more losses and reporting a first quarterly loss ever.
Morgan Stanley posted its first quarterly loss ever Wednesday and stunned the rest of Wall Street by taking additional $5.7 billion mortgage-related writedown, while announcing a $5 billion cash injection from a Chinese state-run investment fund.
If you’re interested in setting up a site to track the mortgage and real estate loss writedowns by the big banks, email me and I’ll be glad to help you get it up and running!
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