[Arniev]

As reported early today, the Home Mortgage Meltdown is largely concentrated in seven states, California and Nevada leading the list, and not widespread as many feared. Many "defaulters" were speculative investors, buying second, third, even fourth properties in the hope their marker values will increase substantially in the future.

Overall, U.S. market fundamentals remain strong.

Obviously, the U.S. government is reluctant to make a "full-court press" action to deal with present mortgage difficulties. Any sudden and wide-spread action by the government is potentially a lightning-rod for political criticism.

Some major mortgage lenders are letting go of hundreds of employees to cope with losses incurred due to bad loans.

Clearly, it is the Mortgage Lending Industry that has to regulate itself and institute effective, albeit practical and reasonable strategies to deal with defaulting mortgage owners, while ensuring that more stringent and diligent procedures are initiated for screening potential new mortgage applicants.

The Yachting Industry is not expected to be adversely affected by the present mortgage meltdown. True, some potential owners may have backed off a project or two, but otherwise, we expect "calm seas" ahead.

[outmywindow]

The Canadian dollar hit Par with the US one today. This spells dark days ahead for the Canadian Manufacturing Industry. Needless to say, the Marine industry has lost its edge, and just a matter of time before everyone figures out that you can buy the same Porsche for $20K less just south of the border.

[Loren Schweizer]

A marine lender who was in my office a couple of days ago said Westship did two 130s and three 112s within a 30-day timespan out of the Fort Lauderdale office.
My spies over at International Yacht Collection tell me they are having (and have had) a banner year there.
The sub-million market is about as slim as O.J.'s chances of escaping serious time in the can.

[Codger]

It is turning out to be a good time to buy.
I put a couple of offers out on some property a few months ago before I went away. At the time both sellers acted insulted and one actually swore at me and said something about a rainy day in hell.
I now have proof that it rains in hell.
Both offers accepted.

[brian eiland]

I had a very good friend who bought a number of properties up in Nova Scotia a few years back when the Canadian dollar was something like 65% of USA. He figured he would make money on the change in the exchange rate, and the property value increase.

He sure has.

[Loren Schweizer]

Originally Posted by Codger

It is turning out to be a good time to buy.
I put a couple of offers out on some property a few months ago before I went away. At the time both sellers acted insulted and one actually swore at me and said something about a rainy day in hell.
I now have proof that it rains in hell.
Both offers accepted.

[outmywindow]

Originally Posted by outmywindow

just a matter of time before everyone figures out that you can buy the same Porsche for $20K less just south of the border.

Originally Posted by Loren

A marine lender who was in my office a couple of days ago said Westship did two 130s and three 112s within a 30-day timespan out of the Fort Lauderdale office.

All the other auto manufacturers will follow suit shortly, this should also translate over to all manufactured goods.(do or die)
Over the last couple of weeks the line-ups on the boarder were 3-4 hours long, as Canadians head south of the line to make their major purchases.
__________________________________________________ __________

Strong loonie drives Porsche prices down
Last Updated: Tuesday, September 25, 2007 | 2:18 PM ET
CBC News
If you've been hopelessly ogling a sweet new Porsche, it's no longer quite as far out of reach.

Porsche announced Tuesday plans to lower prices by an average of about eight per cent on its 2008 models to better reflect the loonie's strength.

"We cannot ignore our customers and dealers in Canada who can look to the U.S. and recognize a substantial price difference," said Peter Schwarzenbauer, president and CEO of Porsche Cars North America, Inc., in a release Tuesday.

"We listened to the market and did what is best for our customers in Canada."

The Canadian dollar reached parity with the U.S. greenback for the first time in almost 31 years on Sept. 20. Since then, it has hovered a little under parity. U.S. retailers have reported a boom in business, while Canadian consumers have complained that retailers at home haven't changed sticker prices to reflect the current exchange rate.

[outmywindow]

Ross Perot was right about the "Giant sucking sound", (nafta) he just got the wrong countries.



p.s. the edit button expired on my previous post.

[outmywindow]

Lining up to invest? I'm inclined to look the other way

In the early '80s I was working as a stock analyst at Bache Canada, the local outpost of a U.S. old-line merchant bank. I sat among the retail brokers who hustled for a living, and these people taught me 50 per cent of what I know about the market. (The other 50 per cent the market taught me, and not politely.) It was fun, too.

For example, once a year, just before Christmas, the brokers presented the "Aorta Award" to the one among them who suffered the worst illness in the line of duty. For the presentation, an old broker who invested in violins and old wines brought his Stradivarius from the bank's safe, and played a gypsy tune. One such event occurred after I had been lucky enough to have issued a sell on Mitel before it cratered and, as a reward, I was handed the Strad and allowed to play. (When I was in the first grade the harmonica teacher was absent, so I ended up playing the violin.) That's how I and the Strad owner (whom I'll call Ernest) got to know each other and, a few days later, he taught me a memorable market lesson that remains very relevant today.

That old Bache office was on King Street East in Toronto, the same as the office of Deak Pereira, dealer in precious metals. As I came to work on the day in question, I found myself having to squeeze through a thick throng of people clutching envelopes full of cash and certified cheques, or holding onto thick wallets. I asked one of them about the lineup. Why, said he, they were lining up to buy gold, which had just broken $800 (U.S.) an ounce on the way up to $2,000, surely, maybe even $3,000. Cash, said he, was no good, what with inflation in the double digits, so one had to rush and get gold.

And no, gold was not the only precious metal going up. Silver, too, was zooming, having reached more than $40 an ounce - mainly because two Texan brothers, Albert and Bunky Hunt, bought as much as they could - with financing facilitated by Bache in the U.S., it so happened - and so created a short squeeze. Silver, no doubt, was also going higher. All this seemed exciting stuff, and so I went in and asked Ernest whether I should also go buy myself some gold and silver with my hard-earned savings. "Before I answer," said Ernest, "please go look at those lining up, and describe them to me. Don't ask questions, just do it." Perplexed, I went out, then came back and reported: "Scuffed shoes, wrinkled clothes, very few ties, and nary an overcoat in sight. So what?"
"Ah," said Ernest. "The pros are selling to this motley crew. Who is left to buy, then?" The revelation was like a flash bulb, and it stayed with me until today. Since then, whenever I see non-wealthy folks lining up to buy from the wealthy pros, I recall old Ernest and try to do the opposite - or at least keep away from what the liner-uppers are buying.

You probably know that the 1980 gold price of $800-plus was the peak for a long time. The following year gold fell, as Federal Reserve chairman Paul Volker choked inflation with steep interest rates, and it continued to fall for many years. Only in 2007, more than a quarter century later, did gold's price rise again above $800. If you take inflation into account, the price of gold price has not yet surpassed what that motley crew paid for it in 1980.

Silver, too, soon buckled after 1980, the brothers Hunt lost everything and soon, as the saying went, were down to their last million. And Bache itself, laden with bad paper due to the silver gamble, was almost taken over by Canada's entrepreneurial Belzberg family before running to the arms of Prudential Insurance.

Now, why I am telling you this story? Because just last week I saw another such lineup, like the 1980 queue for gold. It was on Toronto's Bloor Street, near the Yonge Street intersection, and eager persons stood up all night in order to buy condominium futures. (Why futures? Because buyers were asked to fork over a down payment of a few hundred thousand dollars in order to buy the condo in 2010 or 2011 for full price. Just like buying gold futures, or pork belly futures, or soy bean futures.) The condo's future price? Oh, at least half a million to start, and up to five mil at the top. But then, what's $5-million compared with the privilege of living in the heart of that vibrant metropolis Toronto, which is (as Peter Ustinov once said) New York run by the Swiss? After all, someone surely would soon pay more than five mil for it.

It is here that memories of gold buyers lining up before Deak Pereira in 1980 keep running through my mind, and bring up the nagging thought: Can this be the top of the million-dollar-condo bubble? It is, of course, possible that it's not, and that a four-room (as yet unbuilt) Toronto condo would be worth $10-million - maybe more - very soon, just as it was possible that an ounce of 1980 gold would be worth north of $800 soon after. But just as the gold of 1980 revisited its price only 27 years later, those lining up to buy downtown Toronto condos today may also find they must wait several years - perhaps many - before they get their money back.

Or is it my value investor bias showing? If so, I apologize. But it is the best investing method I know. -Avner Mandelman is president and chief investment officer of Giraffe Capital Corp. and the author of The Sleuth Investor

Nautical Moment:
Poland's 491 km of Baltic Sea coastline is exposed with little shelter from the prevailing winds. Majority of the Country's boating is done on it's thousands of inland lakes and rivers. Poland's low wages have created a niche market as a subcontractor builder for major European and US boat builders with about 90% of all boats produced destined for export.

[Arniev]

A very interesting article ...
with a very important and valuable advise for investors.
Thanks!

[Loren Schweizer]

The famous old adage--Sell when the shoeshine boy offers you a stock tip and buy when there is blood in the streets.

[airship]

Just what do you call it these days when both China and the ex. USSR appear to have embraced capitalism?! "It" being 1st World capitalist democracies who've most recently voluntarily injected "the peoples' funding" into various private enterprises such as a $51 billion US taxpayers' injection into Countrywide and British taxpayers whose central bank has graciously contributed £25 billion (a similar amount).

Beware of where you park your (diesel-powered) cars in future. Some people may yet acquire an official right to refuel their superyachts by tapping into the tanks of parked vehicles in marinas (and make you pay for the length of the hose required), in addition to all the other tax advantages they've already acquired vis-a-vis registering their playthings as commercial vessels, and not being required to pay VAT etc.

But, as GWB said of the latest Middle-eastern peace conference said tonight, "I'm optimistic..."

[YachtForums]

The following was sent by a friend. It's an article from the Motley Fool, an investors website. Seems like the Titanic theme fits into our Market Meltdown thread...

We all remember the tale of the doomed Titanic, and the musicians who kept fiddling while the ship sank into the icy waters. Were they idiots who couldn't see their doom, or were they fatalists who figured they'd put on a happy face to meet their end?

We might ask the same question today of the National Association of Realtors (NAR), the folks who work hard to ensure that their constituency gets 6% of your dough every time you sell your house.

Today, the NAR and Lawrence Yun, its new chief propagandist -- er, economist -- continued to fiddle and insist that all was well, despite that big old iceberg, the wet, numb feet, and the curious gurgling sounds from the shortest of the housing ships' passengers.

Take a look at this ridiculous and self-contradictory release, titled "Mixed Results for October Existing-Home Sales; Mortgages Improving." The NAR follows that front-line fib with what I can only characterize as a big, fat, stinking lie. The first line begins, "Single-family existing-home sales were stable in October."

"Mixed" results? "Stable" sales? There's nothing mixed about a nearly 21% drop from October 2006. There's nothing stable about a housing inventory that has jumped 15.4% year over year, so that the months'-supply number screamed upward by 46%, meaning there is now an incredible 10.8 months' worth of homes on the market. It's amazing the way this real estate trade group can't bring itself to put a realistic perspective on the numbers it releases itself. Click here for the unvarnished figures. (Downloads an Excel spreadsheet.)

Incredibly, the NAR continues to pile the manure on even more thickly, trying to explain away a dismal, 5% median-price drop by claiming that problems in jumbo-loan markets changed the mix of homes sold for the worse. Sorry, NARleys, but yesterday's Case-Shiller home price index numbers, which I discussed here, clearly illustrate the ongoing record (and accelerating!) drop in home prices.

And yo, my NARleys, if you're going to cry about the sales mix moving the results downward, offer up the figures to prove it. Better yet, adjust your pricing statistics to clearly account for incentives given to buyers, as well as remodeling, additions, and other investments that move the sales prices upward without actually representing a capital gain.

With inventory that high, prices will continue to tank, which will mean problems for desperate sellers, as well as builders such as Beazer Homes (NYSE: BZH), D.R. Horton (NYSE: DHI), Ryland Group (NYSE: RYL), Toll Brothers (NYSE: TOL), Hovnanian Enterprises (NYSE: HOV), Pulte Homes (NYSE: PHM), and KB Home (NYSE: KBH).

If this is how the housing-ship Titanic looks now, how buoyant do you suppose it will be in a few months, when all those newly foreclosed properties hit the market?

[outmywindow]

Looks like it may be time to jump back into the market, in Vegas anyway, or wait for a 3 for 1.

[CanuckBoater]

Be careful with statistics and averages:

"You can stick you head in the oven, and butt in the freezer, and be comfortable, on average".