Watch Your Steps At Thai SET...

[lannarebirth]

Citibank's P/E is 10.5 and the dividend yield is 4.74%. B of A's P/E is 10 and it yields 5.3%. How much of a subprime hit would they have to take for these figures to not look reasonable? You'd have to believe in a big sub prime hit followed by an extended recession not to like these stocks at current prices. Citibank has heavy international exposure. B of A is more of a US play.

1. Traders hate financials now.

2. I'm with the cooler heads that are thinking past the volatility.

1. Understandable, as nobody knows how bad the banks are or will be hurt, and...that's worldwide because of this subprime <deleted>.

2. I go along with you.

LaoPo

If you're familiar with market geometry at all, today, August 16, 2007 is the most important date of the past few years. Stay on your toes.

edit: for US markets

Edited August 16, 2007 by lannarebirth

[PCA]

Citibank's P/E is 10.5 and the dividend yield is 4.74%. B of A's P/E is 10 and it yields 5.3%. How much of a subprime hit would they have to take for these figures to not look reasonable? You'd have to believe in a big sub prime hit followed by an extended recession not to like these stocks at current prices. Citibank has heavy international exposure. B of A is more of a US play.

1. Traders hate financials now.

2. I'm with the cooler heads that are thinking past the volatility.

1. Understandable, as nobody knows how bad the banks are or will be hurt, and...that's worldwide because of this subprime <deleted>.

2. I go along with you.

LaoPo

If you're familiar with market geometry at all, today, August 16, 2007 is the most important date of the past few years. Stay on your toes.

edit: for US markets

what makes you believe that?

[LaoPo]

If anyone wishes to have a detailed look at the bloodbath in RED:

It's my bloody Birthday as well, today

From the UK to mainland EU - Russia - Eastern Europe - Israel into Africa and South Africa:

August 16, 2007:

http://www.bloomberg.com/markets/stocks/wei_region2.html

In the meantime the USA markets dived into the red again, further down.

LaoPo

[lannarebirth]

Citibank's P/E is 10.5 and the dividend yield is 4.74%. B of A's P/E is 10 and it yields 5.3%. How much of a subprime hit would they have to take for these figures to not look reasonable? You'd have to believe in a big sub prime hit followed by an extended recession not to like these stocks at current prices. Citibank has heavy international exposure. B of A is more of a US play.

1. Traders hate financials now.

2. I'm with the cooler heads that are thinking past the volatility.

1. Understandable, as nobody knows how bad the banks are or will be hurt, and...that's worldwide because of this subprime <deleted>.

2. I go along with you.

LaoPo

If you're familiar with market geometry at all, today, August 16, 2007 is the most important date of the past few years. Stay on your toes.

edit: for US markets

what makes you believe that?

Market geometry is the study of time relationships between highs and lows of various market cycles using certain mathematical criteria. It would take way to long to explain, but today has many many corelations with previous market turns. Mostly I was just fishing to see if anybody here looked at markets in another way than just reading what some article says is happening. These things are never for certain of course, just probabilities based on historical events.

[lannarebirth]

Happy Birthday Lao Po!

[samran]

this thread is amazing for (at least) two reasons.

Bingobongo has submitted at least 2 non thailand knocking posts with neither having a link to some dodgy article written by an author with questionable economic skills.

Bingo mate, I do love you, you know that....

come on samran, i don't hate thailand, just the junta and the subsequent fallout

and don't worry, i'll get back on track with better "reporting" as the bad news from thailand will be increasing in the weeks and months to come, that is of course if any serious reporter outside of thailand actually cares.....it is just that thailand does not matter to the rest of the world

by the way, how are your "paper" profits from the SET?

up 7% from April, Bingo, at the end of todays shinanegans. Sure, I was up 30% a few weeks ago, and there is blood on the floor for one or two of my picks, but overall, up (though anything could happen tomorrow). Small part of mine and my wifes investments.

My Aussie superannuation fund seems to be holding up, cash in the bank is getting a steady 6.25% on OZ and 5% in the UK, and we have a shared mortgage in OZ, so we aren't too exposed to debt. Hey, even the US dollar is stronger, which is what I earn.

[LaoPo]

I'm afraid the subprime crisis in the US is worsening.

Some excerpts from a US investment letter I just received:

The Banks Have Stopped Lending

By Tom Dyson

August 16, 2007

The phone rang yesterday. It was Iowa Hal, my agriculture contact...

"I'm hearing about all the cheap properties for sale in Florida," he says. "I've always wanted a Florida vacation home. Do you know any good brokers?"

Hal must have seen the news. It came out yesterday morning. Every month, the National Association of Home Builders reports on sentiment in the homebuilding industry. It surveys 352 homebuilders, adjusts for the season, and then presents its results in an index from 0-100. If the index is greater than 50, then builders who see "good" sales outnumber builders who forecast "bad" sales.

This month, the number hit 22 from 24 in July. The reading of 22 marks the lowest point in the index since January 1991. Here's how it looks in a chart:

According to the NAHB statistics released yesterday, these states suffered the biggest drop in sales in the second quarter, compared to the same period a year ago:

Florida, down 41.3%

Nevada, down 37.5%

Arizona, down 23.4%

Tennessee, down 21.5%

Maryland, down 21.1%

California, down 19.8%

"Adjustable rate mortgages in Florida are already resetting like crazy," says Hal. "But the bulge comes in 2008. So I don't think we've seen the worst yet. Besides, I hear it's impossible to get a mortgage anywhere in the northeast. The banks up there have totally shut down. That can't be good for house prices."

The banks won't lend money in Florida, either. I live in Florida...

A neighbor applied for a mortgage last week at Bank of America. My neighbor has great credit, he'd pay a high interest rate, and the collateral – the house – was worth far more than the loan. For the Bank of America, this should have been a slam-dunk deal...

It refused his business. "Bank of America has told everyone to stop lending," he said. "No exceptions."

When the banks stop lending, you've got real trouble. No one has access to money. Money is like oxygen. When it's cut off, everything dies, no matter how valuable it was to begin with. That's the case in the property market right now... especially in places where easy credit played a big part in the property boom... places like Florida.

The pain could be considerable. Cutting off credit while house prices are falling and homeowners are defaulting can only end in disaster. I expect more downside in property prices. I also expect more institutions to go bankrupt.

On the upside, you're close to the end of the crisis when the banks stop lending... and those with cash are kings. It's like the final battering in a boxing match: The consequences are serious, but at least they unfold quickly. Cash goes far in these situations. The guy with cash has no competition. He can have any asset he wants... at a big discount.

I am not responsible for this article and since I don't live in the USA I am not sure HOW serious the situation really is.

Let's wait and see what happens today at the US stock markets but it doesn't look very prosperous, does it ?

ps: Thanks Lannarebirth! My wife gave me a new TomTom GPS for her car

LaoPo

[Farma]

["Adjustable rate mortgages in Florida are already resetting like crazy," says Hal. "But the bulge comes in 2008. So I don't think we've seen the worst yet. Besides, I hear it's impossible to get a mortgage anywhere in the northeast. The banks up there have totally shut down. That can't be good for house prices."

That ties in with an email I received today from a friend with 40 years experience in a real estate office near Chicago.

To quote them “It sounds like the housing bubble has really burst big time. The stock market is going south in a hurry. One of our agents said they had a sale, almost to the signing stage, get stopped when the people were going back to the lender to get the money and were told their credit wasn't up to what is needed to borrow money now.”

[Mid]

Stocks Slide on Credit Fears

The gloom and doom won't stop on Wall Street as more bad news arrives from mortgage lenders at the center of the widening credit crisis

by Ben Steverman

August 16, 2007, 10:55AM EST

snip

The Federal Reserve stepped in again early Thursday and pumped another $5 billion into the markets to help ease the liquidity crunch. On Wednesday, the New York Fed used an overnight repurchase agreement, or "repo", to add $7 billion to financial institutions. In the last week, central banks in the U.S. and Europe have injected money into the markets to help stabilize the credit markets.

However, the Fed's rescue is making investors nervous that more financial and lending companies are in danger. "The Fed pumping money into the system is positive, but the more money they pump in, the more the fear factor increases," explains Peter Cardillo, chief market economist at Avalon Partners in New York. "People think there are still a lot of problems out there."

Plus, some disappointing economic news arrived Thursday morning. U.S. housing starts dropped 6.1% to 1.38 million in July (economists were expecting 1.42 million), from a 1.47 million in June, which was revised lower. July permits fell 2.8%. Single-family starts were off 1.6% while multi-family starts fell 6.1%. Also, U.S. initial jobless claims rose 6,000 to 322,000 in the week ended Aug. 11.

U.S. Treasury Secretary Henry Paulson told the Wall Street Journal he believes the turmoil on financial markets "will extract a penalty" on U.S. economic growth, but "the economy and the markets are strong enough to absorb the losses" without creating a recession.

snip

businessweek.com

[VegasVic]

If anyone wishes to have a detailed look at the bloodbath in RED:

It's my bloody Birthday as well, today

From the UK to mainland EU - Russia - Eastern Europe - Israel into Africa and South Africa:

August 16, 2007:

http://www.bloomberg.com/markets/stocks/wei_region2.html

In the meantime the USA markets dived into the red again, further down.

LaoPo

Happy B-day Lao! The bloodbath will continue when the Asian markets open tomorrow. I warned here many months ago about the hedge funds and and their highly leveraged investments in the Asian stock and currency markets, and also about all the cheap highly leveraged money coming out of Japan. The Yen carry trade is unwinding very rapidly at a most inopportune time, its almost like the perfect storm. Hedge funds, mutual funds and currency traders will all be forced to exit postitions in order to meet redemtions and as the panic continues more redemtions will be made. Friday could be really ugly in the U.S. because it is an options expiration Friday. Cash is certainly king and the movement to the safety of the U.S. dollar has already begun.

[Carmine6]

If anyone wishes to have a detailed look at the bloodbath in RED:

It's my bloody Birthday as well, today

From the UK to mainland EU - Russia - Eastern Europe - Israel into Africa and South Africa:

August 16, 2007:

http://www.bloomberg.com/markets/stocks/wei_region2.html

In the meantime the USA markets dived into the red again, further down.

LaoPo

What a rollercoaster. Dow down 343 two hours before the close then rallied to a gain in the last 4 minutes of the trading day. But now settling down 15 at the close. S&P 500 up 4.56. Citibank up 4.25%, B of A up 3.36%. I shall momentarily revel in my first daily gain in a week. Tears, I'll have in reserve for tomorrow.

Happy birthday LaoPo. At least the last market of the day sorta came through for you. Hopefully the Asian markets carry through a little of the firming up, followed by Europe. Although lots of people are saying the rally was due to short covering.

I saw an estimate on CNN Money that the total actual losses in subprime bonds would be $50 billion to $100 billion. Since it's spread to holders around the world, that's not so much.

[lannarebirth]

Too many deep in the money index puts. 40 point "V" reversal in futures. We'll see what the real market looks like after they kill the puts tomorrow.

[LaoPo]

Thanks for the birthday wishes Gents!

Thursday August 16th, the 'New York' DJIA & Nasdaq closed just a little down and the S&P500 even a bit up which takes the extreme tense away, for the moment.

There are speculations* that the interest rate will be cut, by the FED. That could ease the need for money.

We will have to see Friday what happens on the Thai SET and rest of Asia.

Personally, I don't think that Friday the Asian markets will drop dramatically any further [for the moment]; maybe just moderate or even up a bit, but at this stage ANYTHING is possible, like a downfall of a major mortgage bank, which will put fire to the oil -again-.

...who knows ?

edit:

" `Losing Faith'

The Fed should reduce interest rates ``pretty soon'' because mortgage market losses have created a ``credit crunch,'' Barton Biggs said.

``People are losing faith in credit, so the economy is seizing up,'' said Biggs, 74. ``That's why it's important that the Fed cut rates and get confidence back in the system.''

Biggs predicted in April that the Dow average will rise 19 percent this year. The 30-stock gauge has risen 3.1 percent so far and has dropped 8.2 percent since reaching a record July 19.

Other investors and traders said speculation of a rate cut spurred the rally in financial shares.

``There's a rumor of an emergency Fed meeting,'' said Thomas Garcia, head of trading at Thornburg Investment Management, which oversees about $45 billion in Santa Fe, New Mexico. ``You've got a major credit crunch right now and these guys need to get it together and do something about it.''

source:

http://www.bloomberg.com/apps/news?pid=206...&refer=news

LaoPo

Edited August 16, 2007 by LaoPo

[LaoPo]

I would like to add to the post above:

Personally, I don't know if an interest rate-cut, by the FED, is wise in order to heal the sick financial (also especially in the US) markets in the world.

For years, since 1995, many (lower income) people were 'lured' with cheap loans, credits and mortgages, which in fact they were not even able (or at least very difficult) to repay.

People were granted many kinds of credit cards, no problem Sir! "spend as much as you want"

NO PROBLEM, Sir, "we will loan you the money...BUT, sorry, it's a bit (a lot in fact) more expensive than if you had a better job, income or other sources of income.....but we're sure and trust you, you will repay us...."

The problem is that, like a banker friend once told me, 'Banks are legalized Mafia'.....and will do ANYTHING to make money.

They don't & didn't protect their own clients against themselves and their own responsibilities, read: 'I can't pay -anymore- for my own debts...'

The point NOW is, that if interest rates are cut by the FED, money will become cheaper -again- and mortgages and loans will be more accessible -again-; (USA) mortgage banks that are on the edge of bankruptcy will be saved, or taken over by Mortgage giants like Fannie Mae (private but government supported) and thus the same 'old' financial possibilities will be 'eased' again for the same lower-income people.

Thursday, the FED pumped many more Billions into the market (TAX money!), supplying cash to the banks in fact, making it possible for banks to 'ease' their credits to customers -and other banks- and Hedge Funds as well.

Now, THAT's a major problem IMHO because it will ease the subprime mortgage crisis AGAIN !!!

It's like taken an Aspirin for your headache, but the origin of your headache is still there.

Hedge Funds: the 'play ball' of our esteemed member Mr. VegasVic.

I despise hedge funds as much as he does but they're not the only ones who created the financial mess in the world; it's a combination of financial institutions, banks, hedge funds and insurance companies, amongst others, who invented: 'buy cheap money and sell it for the highest bidder'.

BUT, where does/did all this money come from ?....

And, YES, than we arrive in Japan where the money was almost for free...for years, years, and years....

And, some brilliant (have to admit that) financial brains created very complicated but sophisticated financial products which they could sell and re-sell again at huge profits...as long as the money staid cheap.....

But, now the money-well is almost dry, so the world has a problem, a <deleted> BIG problem!

Well, enough for now, since my birthday is over... ...and maybe, just maybe the SET will rise tomorrow, Friday August 17th, to skyhigh numbers..

who knows?

PS: sorry for my simple English as I'm not educated in financial English...dumb me.

LaoPo

Edited August 16, 2007 by LaoPo

[bingobongo]

todays reversal on the DOW (from -365 to -15)and US markets were due to:

1) rumours of Fed rate cut

2) fed injecting $17 billion today alone to grease the frozen credit market http://www.cnbc.com/id/20294841

3) tomorrow being the 3rd Friday of the month, for which all you options traders know is the last tradeable day for Aug puts and calls (which has always been volitale prior to options expiry)

4) short covering

the overall trend is still down (in the US at least)

[Mid]

The SET is currently testing (breaching, for the moment) the 780 level. It's an area that should provide support in a bullish market environment. If it doesn't, I would expect a rapid drop to 725-740 level. If that doesn't hold, IMO this run is over.

Last Update : 17 Aug 2007 11:26:44

Last Change Value

(M.Baht)

SET Index 739.20 -11.49 6,560.01

SET100 Index 1,132.95 -20.40 5,568.68

SET50 Index 522.11 -9.94 4,935.98

mai Index 236.05 -4.19 200.80

bump ...................

[esbobes]

todays reversal on the DOW (from -365 to -15)and US markets were due to:

1) rumours of Fed rate cut

2) fed injecting $17 billion today alone to grease the frozen credit market http://www.cnbc.com/id/20294841

3) tomorrow being the 3rd Friday of the month, for which all you options traders know is the last tradeable day for Aug puts and calls (which has always been volitale prior to options expiry)

4) short covering

the overall trend is still down (in the US at least)

Up and down the rich Americans ontrol the markets their planwipe out the middle and upper class they shall own it all.

Becafeful 60 Baht to dollars All housing shall decline 70 per cent in the World Uk not safe at all

[highdiver]

If anyone wishes to have a detailed look at the bloodbath in RED:

It's my bloody Birthday as well, today

From the UK to mainland EU - Russia - Eastern Europe - Israel into Africa and South Africa:

August 16, 2007:

http://www.bloomberg.com/markets/stocks/wei_region2.html

In the meantime the USA markets dived into the red again, further down.

LaoPo

Happy B-day Lao! The bloodbath will continue when the Asian markets open tomorrow. I warned here many months ago about the hedge funds and and their highly leveraged investments in the Asian stock and currency markets, and also about all the cheap highly leveraged money coming out of Japan. The Yen carry trade is unwinding very rapidly at a most inopportune time, its almost like the perfect storm. Hedge funds, mutual funds and currency traders will all be forced to exit postitions in order to meet redemtions and as the panic continues more redemtions will be made. Friday could be really ugly in the U.S. because it is an options expiration Friday. Cash is certainly king and the movement to the safety of the U.S. dollar has already begun.

Vegas you are spot on!!!

in may we disussed this in great detail about the hedge funds position policy and what it will create as they are not under any controll.

I remember more then one poster mocking us about this.....

Now the bubble has burst cary taderd are on the loose tying to dump all the high yield assets and pay back the loans to the Japanese

The yen is shooting up and it will continue to shoot up as more and more of those positions will be seeking to buy yen.

The USD will shoot up as well as all those investors in hedge fund will want to redeem and liquidate.

today has started with the australian bank buying curency to support the aussie dollar. japan and us are dumping cash on the market to support the credit crunch.

it does not look good.

[Moe]

Yesterday I bought a small amount of SCC at 236 and will look at buying small amounts of other stocks like PTT, TOP, BBL and KBANK periodically over the next few weeks and months.

Time will tell if this is a good strategy or an incredibly foolish one.

[lannarebirth]

Yesterday I bought a small amount of SCC at 236 and will look at buying small amounts of other stocks like PTT, TOP, BBL and KBANK periodically over the next few weeks and months.

Time will tell if this is a good strategy or an incredibly foolish one.

The only problem I see with the SET is that there's a gap in the chart near 519. Hopefully it won't ever fill, but usually it does.

[sonicdragon]

I bought the HK market this morning. After lunch it was very ugly. I've ended up getting out just better barely than flat. The afternoon sell off and then the rally back was really quite amazing. I think we've seen capitulation. I'm buying S&Ps here on globex. I expect strength at some time in the US day in the absence of any more negative news. That's not to say that I think this current turmoil is over. There can easily be more downside. I just think that at this point, for someone willing to take risk, it's worth a dipping a toe in.

[samran]

I bought the HK market this morning. After lunch it was very ugly. I've ended up getting out just better barely than flat. The afternoon sell off and then the rally back was really quite amazing. I think we've seen capitulation. I'm buying S&Ps here on globex. I expect strength at some time in the US day in the absence of any more negative news. That's not to say that I think this current turmoil is over. There can easily be more downside. I just think that at this point, for someone willing to take risk, it's worth a dipping a toe in.

more green to be seen later this afternoon on the SET, probably following HK lead. Still volatile, and anything can happen tomorrow I guess.

[Mid]

Still volatile, and anything can happen tomorrow I guess.

bit rattled are we , ,

relax , tomorrows Saturday .............................

[samran]

Still volatile, and anything can happen tomorrow I guess.

bit rattled are we , ,

relax , tomorrows Saturday .............................

Seriously, my Thai 'portfolio' would buy me a nice round trip first class to say the UK, but not much further. It is fun and games for me. I like a couple of Thai companies and will put some spare cash into them, what is left over after I've paid into my normal AMP super fund in Australia and our mortgage!.

I'm not rattled, just been flat out at work all week, in fact for the past three. I don't know whats up or down, or when my day will end. Work, work, work.

Anyway, hopefully the weekend may give pause for some people to look at what is happening in the US at least a little bit objectively.

[Mid]

Anyway, hopefully the weekend may give pause for some people to look at what is happening in the US at least a little bit objectively.

agreed , 'ave a great 'un

[lannarebirth]

So, the Fed bailed out the options underwriters today. Those options expire in a few hours time. We'll see what the real market is after that I guess.

Edited August 17, 2007 by lannarebirth

[Farma]

The US Fed has just cut rates by 50 points to 5.75%

[LaoPo]

The US Fed has just cut rates by 50 points to 5.75%

Correct.

Fed Cuts Discount Rate to 5.75%, Cites `Downside' Risks

By Brendan Murray

Aug. 17 (Bloomberg) -- The Federal Reserve, in an unscheduled meeting, cut the discount rate to 5.75 percent from 6.25 percent, noting market conditions have deteriorated since it last met Aug. 7.

``Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward, '' the central bank's Federal Open Market Committee said in a statement. ``The downside risks have increased appreciably.''

The FOMC left the overnight federal funds target rate unchanged at 5.25 percent.

Last Updated: August 17, 2007 08:16 EDT

From: Bloomberg

edit:

The European stock markets were very nervous but JUMPED UP after the news of the rate-cut by the FED; some now up more than +2%

LaoPo

Edited August 17, 2007 by LaoPo

[j_cheung]

The US Fed has just cut rates by 50 points to 5.75%

Correct.

Fed Cuts Discount Rate to 5.75%, Cites `Downside' Risks

By Brendan Murray

Aug. 17 (Bloomberg) -- The Federal Reserve, in an unscheduled meeting, cut the discount rate to 5.75 percent from 6.25 percent, noting market conditions have deteriorated since it last met Aug. 7.

``Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward, '' the central bank's Federal Open Market Committee said in a statement. ``The downside risks have increased appreciably.''

The FOMC left the overnight federal funds target rate unchanged at 5.25 percent.

Last Updated: August 17, 2007 08:16 EDT

From: Bloomberg

edit:

The European stock markets were very nervous but JUMPED UP after the news of the rate-cut by the FED; some now up more than +2%

LaoPo

First shoe (i.e. discount window rate) dropped ... just waiting for the second (i.e. Fed Funds rate). Anti-climax & final burial would possibly be Ch. 11 filing of some big mortgage financials.

[VegasVic]

The US Fed has just cut rates by 50 points to 5.75%

Correct.

Fed Cuts Discount Rate to 5.75%, Cites `Downside' Risks

By Brendan Murray

Aug. 17 (Bloomberg) -- The Federal Reserve, in an unscheduled meeting, cut the discount rate to 5.75 percent from 6.25 percent, noting market conditions have deteriorated since it last met Aug. 7.

``Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward, '' the central bank's Federal Open Market Committee said in a statement. ``The downside risks have increased appreciably.''

The FOMC left the overnight federal funds target rate unchanged at 5.25 percent.

Last Updated: August 17, 2007 08:16 EDT

From: Bloomberg

edit:

The European stock markets were very nervous but JUMPED UP after the news of the rate-cut by the FED; some now up more than +2%

LaoPo

First shoe (i.e. discount window rate) dropped ... just waiting for the second (i.e. Fed Funds rate). Anti-climax & final burial would possibly be Ch. 11 filing of some big mortgage financials.

After yesterdays action by the FED, you won't be seeing any Countrywides or Washington Mutuals going C-11, if anything they will be takeover candidates. I do agree that the FED funds rate will likely come down by 50 basis points at the September FOMC meeting, what will be interesting to see is if the discount rate gets lowered further at that meeting (or sooner) as well.