“The biggest tumor that we are now facing for the economy is the shadow inventory of housing. We now have six million units that are delinquent, in default, or foreclosed, and 15 million other units for sale. Demographic demand can only soak up one million units a year. It is the biggest dilemma for homeowners,” [...]

“Real estate is always the drunk driver of the economy. Usually the problem is oversupply. This time it was an oversupply of debt,” said Tom Barrack, CEO of Colony Capital, and a former principal of the Bass Group.

“The generals are still there, but the soldiers are leaving the field,” said Tom Dorsey of Dorsey Wright Associates, a technical analysis research firm, about the current level of stock indexes.

“If you add up all the stimulus that expires at the end of the year, like the Bush tax cuts, the jobs bill, and so on, it adds up to 4% of GDP. It’s a major factor that no one is focusing on….yet,” said Larry Kantor, chief strategist of Barclays Capital.

“The VIX right here is unsustainably low. I think China has more of a downside surprise. Analyst expectations for earnings are overly aggressive. There are just a few too many things that can go wrong out there,” said Vadim Zlotnikov, chief market strategist at Alliance Bernstein.

“People that have complete disdain for government intervention in the economy and markets of the West have complete faith in nine guys in a room being able to figure out the very complex and rapidly growing Chinese economy,” said hedge fund manager Jim Chanos of Kynikos Associates, about foreign investors’ unlimited faith in the Middle [...]

My problem with the stock market is that I fail to see who the incremental buyer will be to take the S&P 500 to 1,500. It’s not going to be the retail investor who has been hit with a 34% drop in home prices, two market crashes in the last decade, and a flash crash [...]

“The Bernanke put is still there, but it is far more out of the money that it was a few days ago,” said Doug Kass of hedge fund Seabreeze Partners.

“What we really have to do is get back to fundamentals, and for most Americans that means working for a living and not investing for a living.” said Tom Barrack, CEO of Colony Capital, and a former principal of the Bass Group.

“A statistical model built around a normal distribution when applied to markets can be a very dangerous thing,” said David Kelly of JP Morgan.

“Equities lead the risk appetite on the way up, and they will lead on the way down,” said Lincoln Ellis of the Linn Group

“Bull markets go everywhere from 1-2 years to five years after the Fed begins tightening. We’ve got a long way to go before we have to worry about bonds competing against stocks,” said Professor Jeremy Siegel of the Wharton School of Business

“The only surprise to me is that so many people were surprised,” said Nobel Prize winning economist Joseph Stiglitz, about the financial crisis he predicted.

“It’s very difficult to navigate a business through a paradigm shift. You must hard wire your system to second guess all the time, questioning what is next, and then what is next. You’ve got to retain optionality for both investment portfolios and the business your run to navigate this well,” said Mohamed El-Erian, co-chairman of [...]

“The luckiest person in the world today is the baby being born in the United States. The outlook for this country is fantastic,” said Warren Buffet.