Global Correction

[teej]

Thanks lanna.

I wonder if GM could single-handedly blow out the PBGC. What a wreck.

GM market cap: 6 billion USD

Toyota market cap: 148 billion USD

The talking heads on CNBC are talking about GM as I write this. It's sad, actually... for the workers. I hope the management doesn't get out un-scathed while the blue collars suffer -- but that never is the case, sadly. I think it would be the first time I actually feel sorry for "The Average American Worker." GM's management has had no vision for years, brutally and serially behind the curve.

[LaoPo]

Thanks lanna.

I wonder if GM could single-handedly blow out the PBGC. What a wreck.

GM market cap: 6 billion USD

Toyota market cap: 148 billion USD

The talking heads on CNBC are talking about GM as I write this. It's sad, actually... for the workers. I hope the management doesn't get out un-scathed while the blue collars suffer -- but that never is the case, sadly. I think it would be the first time I actually feel sorry for "The Average American Worker." GM's management has had no vision for years, brutally and serially behind the curve.

I think that's a misunderstanding. Although Toyota is also noted in NY the market cap/financials/profits etc. are in Jap. Yen. Market Cap 143,92 Billion Yen (Google Finance)

Note:

GM went down another scary -14.89% in a single day. Market Cap now: $ 5.66 Billion

Get your heart pills ready Gents !

LaoPo

[pkrv]

Interesting much like endowments policies in the UK the humble annuity could spell out to us what is truly happening.

Essentially an annuity (your pension) is handing over a pot of cash that is returned to you with interest over your expected lifetime. So we see lots of information on life expectancy. If you take out you annuity at say 50 you will simply receive basic interest. If you take out an annuity at 65 a higher amount will be paid because the money with interest is returned to you over a shorter period.

So people who say if you take your pension early you are losing money are actually talking crap, your money is returned to you over your expected lifetime (with interest)

For me I intend to take my final salary pension at 50 i.e ASAP

Yes final salary schemes which I intend to draw on at the earliest opportunity do place a burden on the company who offered them but you will not lose out by taking an early pension. Agreed it will be smaller but will last much longer! In the UK it is mandatory it is invested in UK government bonds.

Any thought on this?

Edited July 4, 2008 by pkrv

[AFKAFSinLOS]

Interesting much like endowments policies in the UK the humble annuity could spell out to us what is truly happening.

Essentially an annuity (your pension) is handing over a pot of cash that is returned to you with interest over your expected lifetime. So we see lots of information on life expectancy. If you take out you annuity at say 50 you will simply receive basic interest. If you take out an annuity at 65 a higher amount will be paid because the money with interest is returned to you over a shorter period.

So people who say if you take your pension early you are losing money are actually talking crap, your money is returned to you over your expected lifetime (with interest)

For me I intend to take my pension at 50 ASAP

Yes final salary schemes which I intend to draw on at the earliest opportunity do place a burden on the company who offered them but you will not lose out by taking an early pension. Agreed it will be smaller but will last much longer! In the UK it is mandatory it is invested in UK government bonds.

Any thought on this?

Pretty much agree, unless someone does a Maxwell and raids the pension fund kitty, and the company goes bankrupt, wherein everyone loses, not just those taking an early pension.

BTW I'd do the same in your shoes. You're lucky to be able to take your pension at 50, before it gets increased to 55 soon. My view on my final salary schemes is to start taking as early as possible regardless of whether I need the cash. I can then do what I please with it, including stashing it away and reinvesting elsewhere. You're also likely to have more to pass on to your relatives. As you say, waiting gets you a higher amount but the trade off is for less time.

There is an element tho' that increased returns by delaying a few years may/may not exceed the opportunity cost of what you could do in reinvesting the money. That said a bird in the hand.... is even nicer if she brings a friend...

[churchill]

And if you are non resident transfer your funds via QROPS to get even more flexibility

[pkrv]

Interesting much like endowments policies in the UK the humble annuity could spell out to us what is truly happening.

Essentially an annuity (your pension) is handing over a pot of cash that is returned to you with interest over your expected lifetime. So we see lots of information on life expectancy. If you take out you annuity at say 50 you will simply receive basic interest. If you take out an annuity at 65 a higher amount will be paid because the money with interest is returned to you over a shorter period.

So people who say if you take your pension early you are losing money are actually talking crap, your money is returned to you over your expected lifetime (with interest)

For me I intend to take my pension at 50 ASAP

Yes final salary schemes which I intend to draw on at the earliest opportunity do place a burden on the company who offered them but you will not lose out by taking an early pension. Agreed it will be smaller but will last much longer! In the UK it is mandatory it is invested in UK government bonds.

Any thought on this?

Pretty much agree, unless someone does a Maxwell and raids the pension fund kitty, and the company goes bankrupt, wherein everyone loses, not just those taking an early pension.

BTW I'd do the same in your shoes. You're lucky to be able to take your pension at 50, before it gets increased to 55 soon. My view on my final salary schemes is to start taking as early as possible regardless of whether I need the cash. I can then do what I please with it, including stashing it away and reinvesting elsewhere. You're also likely to have more to pass on to your relatives. As you say, waiting gets you a higher amount but the trade off is for less time.

There is an element tho' that increased returns by delaying a few years may/may not exceed the opportunity cost of what you could do in reinvesting the money. That said a bird in the hand.... is even nicer if she brings a friend...

You know I don't think we are the only ones to have worked this out. The consequences are quite profound.

It may be prudent to have a roof over your head and cash and perhaps learn about a certain prophet (you can't draw pictures though)

So much for Bushes 'crusade'. God (no pun intended) what a prat to have said that. Mind you I suspect he will be amongst the first to convert.

[lannarebirth]

Everyone knows how this will end Lao Po. Those Industrials have HUGE pension and medical obligations. They'll take'em right to the brink to cast off those retired workers that gave their working lives to these companies. The day they find a way to disencumber themselves from these legal and moral obligations will be the day the stocks begin their 1000% ascent.

Yes, sad enough. In fact the whole USA is broke. But it will be the blue collars who suffer, like always.

LaoPo

CODE RED

I'm not given to hyperbole, but let's just say a break of the red line would not be good. Not at all.

[LaoPo]

Everyone knows how this will end Lao Po. Those Industrials have HUGE pension and medical obligations. They'll take'em right to the brink to cast off those retired workers that gave their working lives to these companies. The day they find a way to disencumber themselves from these legal and moral obligations will be the day the stocks begin their 1000% ascent.

Yes, sad enough. In fact the whole USA is broke. But it will be the blue collars who suffer, like always.

LaoPo

CODE RED

I'm not given to hyperbole, but let's just say a break of the red line would not be good. Not at all.

I just noticed the fall of the mortgage- and insurance banks/institutions in the US by percentage of -15% >> -18% and that's a lot for Giants like Freddie Mac and Fannie Mae and the like.

http://www.marketwatch.com/news/story/fann...&dist=msr_1

Too many banks, both in the US and Europe have to raise Billions and Billions in order to survive; I don't even want to think of the possibility that they are NOT able to find that money.

Fortis, A Belgian-Dutch Bank/Insurer had no other option last week than to accept cash from Lybia/Gadaffi, Ping An/China and a Russian Billionair....

It's risky out there.

LaoPo

[LaoPo]

Freddie Mac, Fannie Mae Plunge on Capital Concerns

By Jody Shenn and Shannon D. Harrington

July 7 (Bloomberg) -- Freddie Mac and Fannie Mae fell to the lowest in 13 years in New York Stock Exchange composite trading as concerns grew the two largest U.S. mortgage-finance companies may need to raise more capital to overcome writedowns and satisfy new accounting rules.

Freddie Mac fell 18 percent and Fannie Mae dropped 16 percent after Lehman Brothers Holdings Inc. analysts said in a report today that an accounting change may force them to raise a combined $75 billion. Speculation that the companies may take further writedowns also weighed on the stock, said John Tierney, a credit strategist at Deutsche Bank AG in New York.

``There's a lot of apprehension about writedowns,'' Tierney said. ``If they have writedowns, they have to raise capital. How much do they raise and how easily can they do that? Those are the questions that everybody is asking.''

Fannie Mae and Freddie Mac have declined more than 60 percent this year, with declines accelerating in the past two weeks, on concern the companies' capital raisings since December may not be enough to overcome writedowns. Washington-based Fannie Mae so far has raised $6 billion in capital to offset writedowns on mortgages it owns or guarantees. Freddie Mac, based in McLean, Virginia, raised $13.5 billion since December and said last week plans to add $5.5 billion probably won't be fulfilled until late next month.

Growing Delinquencies

Brian Faith, a Fannie Mae spokesman, declined to comment as did Michael Cosgrove, a Freddie Mac spokesman.

Freddie Mac fell $2.59 to $11.91 after earlier dropping as low as $10.28. Fannie Mae declined $3.04 to $15.74 and earlier fell to $14.65.

Continues here:

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

LaoPo

[dotcom]

As GSE's they will not be allowed to fail. Taxpayer bailout. So quoteth Cramer.

[dotcom]

BKX closed 55.18 -2.12 LOL.

[LaoPo]

BKX closed 55.18 -2.12 LOL.

Kbw Bank Index USD BKX

BKX closed 55.18; it came from 115.....12 months ago; it looks like an Aspen ski slope...a black one

LaoPo

[bingobongo]

yawn, what have we learned folks other than Naam hates me (not that I care)

global bourses are swooning, once the Beijing olympics are over and we move into autumn, it is over

here is a tip....support on the DOW is 11203, if that fails next stop is 10750 and the rest of the markets will follow

since this is LOS, support isn't until 725-730, so dont buy now, buy later

dang, i nailed that one......AGAIN, 725 - 730 on the SET (today as of this posting) just like i said, oh where art thou NAAM and PKRV and you other amateurs? LOL

anyway, if DOW does not hold 11203, then 10750 is next support, and if that does hold..........oh dear

regardless, the $ is going to start a long march upward, not because of US strength, but because the rest of the world (yes including LOS) is mismanaging inflation.........get ready

Edited July 8, 2008 by bingobongo

[LivinLOS]

Naam, how is the financial colonic coming along?

SET down again to 782, and next support is not until 725-730

it will be time for your financial lesson very shortly

Well Bingo I have to give credit where credit is due and your call for the DOW to break down to the 11,300 neighborhood has come to pass, kudos on your prediction sir! Last year I predicted that the Shanghai exchange would lose 50% of its value before the Olympics and at the time I encountered a constant barrage of verbal abuse from a certain poster who was regularly pumping(or pimping) that market back then (now who could that be?), but that particular serial poster hasn't had the decency to admit I was correct as of yet, par for the course I guess. I any event the oil bubble is currently on the precipise of bursting and when it does the bottom will fall out of the gold market and gold will come down to the mid $600's or lower, just as I predicted last year as well. To all the Americans out there, have a safe and fesitve 4th of July weekend.

Yet you also said sell gold at 850 and EUR would be 1.4x (by March or April ??)..

So admitting errors is not only other peoples problems is it ??

Oil down and gold down.. We will see wont we.

[glyph]

"dang, i nailed that one......AGAIN..."

Then you must be super rich, right? I mean, not only do you predict doom and gloom, you invest according to your predictions, right? You sold short, and you had to hire someone just to help you count your money, right? Of course not, and that's the difference between an "investor" and a passive "market watcher". A recent poster claimed that he predicted the fall of the Shanghai stock index a year ago. I did the same 3 years ago and, rather than just gloat when my prediction came true, I actually invested in the Shanghai market. My 100K turned into just over 400K - in 3 years, and that's after paying taxes and all fees. It's not nearly as good as your trusty Nationwide Flex account, but it's a pretty good return.

[pkrv]

Bonkers you really should learn to read

i don't hate poor frustrated boys Bingo. i pity them

Obviously we are on a broken 24 hour clock at this time.

[lannarebirth]

"dang, i nailed that one......AGAIN..."

Mr Bongo needs to learn the difference between making a call and repeating a one note theme. It's all in the details.

[teej]

dotcom: Fannie and Freddie, yeah sure they won't be allowed to fail but that doesn't mean shareholder equity can't be obliterated.

lanna: scary graph

LaoPo: i blew my ACL on a triple black diamond ski slope

bingo: you made the call. hope you made some money.

I think there are lots of things to talk about global economies/opportunities/blow-outs. I'm not sure, however, that this thread has more legs on it. Really, is some newbie going to read 36 pages to get up to date on this thread?

Maybe some new threads covering some new ideas are in order. Ideas?

Incidentally, Boone Pickens on CNBC's Squawk Box right now -- hilarious old man. He's talking about Natural Gas (among other things) running cars, it's like a Natural Gas Vehicle is a totally alien topic for Joe Kernan to digest (Maybe he's just asking on behalf of the viewing public). He's asking questions like, "I mean what do these cars look like?" and "I don't want some putt-putt car" and "can I get premium?" Boone just mentioned Thailand, actually.

[pkrv]

Really, is some newbie going to read 36 pages to get up to date on this thread?

Maybe some new threads covering some new ideas are in order. Ideas?

IMO If they can't they are f****d. Life is an everchanging dynamic. Keep going IMO. And learn from past mistakes.

[dotcom]

BKX 59.38 +4.20

[LaoPo]

BKX 59.38 +4.20

Yes, thats because Bernanke's FED extends the help for the troubled financials; in fact helping the crooks who created the mess... ...and the market cheers and applaud Doctor Bernanke...................More aspirin, more injections for the patient...if it will help ?

First, 100's of Billions of $'s have to be found to cure the sick financial patients in the US, Europe and Far East. The Russian, Lybian, Arabian and Chinese predators with their pockets full of cash are laughing....

Bernanke Says Fed May Continue Lending Into Next Year

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

If Dr. Bernanke will succeed with his medication ? We'll see

LaoPo

[Naam]

yawn, what have we learned folks other than Naam hates me (not that I care)

global bourses are swooning, once the Beijing olympics are over and we move into autumn, it is over

here is a tip....support on the DOW is 11203, if that fails next stop is 10750 and the rest of the markets will follow

since this is LOS, support isn't until 725-730, so dont buy now, buy later

dang, i nailed that one......AGAIN, 725 - 730 on the SET

does that mean you stopped beating your wife Bingo?

[glyph]

"Boone Pickens on CNBC's Squawk Box right now -- hilarious old man."

You should Google his name, and you'll find out a lot more about Mr. Pickens, his age and sense of humor notwithstanding.

[teej]

No need for Google as I had myself a proper Texan Professor in Business School, and he was always fixin' to talk about Boone all day everyday... I still think he's a fully old man (Boone, that is) -- seems like he'd make an awesome grandpa

My class notes can be found in the local landfill in Ann Arbor, Michigan. Anybody interested in knowing about Boone's childhood, family, business history, shoe size, random facts on Oklahoma and Texas, or all kinds of fun stuff can contact my Professor "The Texan Mexican" at U of M (Go Blue! ). He'll sit y'all down for a tall tale 'bout a man named Boone... and you'll fall asleep. It was much more interesting to watch Boone on TV. He's clever. And he even busted out a whiteboard for a lesson on CNBC!

[bingobongo]

Naam, what drains faster, a colonoscopy bag or your brokerage account?

HSBC Global Research said Tuesday it has downgraded Thailand's stock market to underweight from overweight and closed its position in Thai equities because the country's "serial political instability" is becoming too entrenched.

ok, well if the BOT does not raise rates this month, then inflation will continue to worsen thereby making LOS folks poorer on a daily basis

if the SET doest get back over 725-727 soon, then 675 is next, how are the protests and gvt dissolution coming along by the way?

[LaoPo]

Freddie Mac, Fannie Mae Plunge on Capital Concerns

By Jody Shenn and Shannon D. Harrington

July 7 (Bloomberg) -- Freddie Mac and Fannie Mae fell to the lowest in 13 years in New York Stock Exchange composite trading as concerns grew the two largest U.S. mortgage-finance companies may need to raise more capital to overcome writedowns and satisfy new accounting rules.

Freddie Mac fell 18 percent and Fannie Mae dropped 16 percent after Lehman Brothers Holdings Inc. analysts said in a report today that an accounting change may force them to raise a combined $75 billion.

LaoPo

Fannie, Freddie shares slump for third day

Freddie Mac falls 23% as capital fears persist

Freddie Mac's (FRE): Freddie Mac FRE 10.26, -3.20, -23.8%) shares were hit the hardest Wednesday, dropping 23% to close at $10.39.

Shares of Fannie Mae (FNM): Fannie Mae FNM 15.31, -2.31, -13.1%) dropped 12.6% to finish at $15.40.

continues here:

http://www.marketwatch.com/news/story/fann...amp;dist=msr_15

Sub Prime crisis over ?

I don't know how much further these 2 American Mortgage Giants could fall any further but nothing is impossible.

FRE: Freddie Mac lost -83 % of their market value/past 12 months; Coming from $ 60, now $ 10.39

FNM: Fannie Mae lost -76% of their market value/past 12 months; Coming from $ 65, now $ 15,40

LaoPo

[Naam]

Naam, what drains faster, a colonoscopy bag or your brokerage account?

never used a broker and wouldn't entrust a broker with a single penny of my hard earned money for the record: YTD i am down 2.788% in €UR terms and up 6.744% in USD terms. i use €UR and USD as main reference currencies.

now Bingo... what about answering my question? have you or have you not stopped beating your wife, girlfriend, boyfriend? [delete what is not applicable]

[cloudhopper]

Sub Prime crisis over ?

I don't know how much further these 2 American Mortgage Giants could fall any further but nothing is impossible.

FRE: Freddie Mac lost -83 % of their market value/past 12 months; Coming from $ 60, now $ 10.39

FNM: Fannie Mae lost -76% of their market value/past 12 months; Coming from $ 65, now $ 15,40

LaoPo

Pretty shocking all right. Aren't those two quasi-government companies?

[pkrv]

Sub Prime crisis over ?

I don't know how much further these 2 American Mortgage Giants could fall any further but nothing is impossible.

FRE: Freddie Mac lost -83 % of their market value/past 12 months; Coming from $ 60, now $ 10.39

FNM: Fannie Mae lost -76% of their market value/past 12 months; Coming from $ 65, now $ 15,40

LaoPo

Pretty shocking all right. Aren't those two quasi-government companies?

Yes

[LaoPo]

Sub Prime crisis over ?

I don't know how much further these 2 American Mortgage Giants could fall any further but nothing is impossible.

FRE: Freddie Mac lost -83 % of their market value/past 12 months; Coming from $ 60, now $ 10.39

FNM: Fannie Mae lost -76% of their market value/past 12 months; Coming from $ 65, now $ 15,40

LaoPo

Pretty shocking all right. Aren't those two quasi-government companies?

Yes

I couldn't describe it better than the specialists...

FREDDIE MAC: FRE: http://www.reuters.com/finance/stocks/comp...RE.N&rpc=66

FANNIE MAE: FNM: http://www.reuters.com/finance/stocks/comp...NM.N&rpc=66

LaoPo

More shocking news

Former Fed President: Freddie Mac, Fannie Mae Insolvent

NEW YORK (Dow Jones) -- Fannie Mae (FNM) and Freddie Mac (FRE), the two U.S. government-sponsored mortgage giants, are involvent and Congress is allowing them to "exist as bastions of privilege," former Federal Reserve president William Poole told Bloomberg Wednesday.

In an interview, Poole, who left the Fed in March, said under fair value accounting rules Freddie Mac is involvent and that the fair value of Fannie Mae may be negative next quarter -- increasing chances that the federal government may need to bail out the two.

"Congress ought to recognize that these firms are involvent," Poole said A Fannie Mae spokesman said the company can "fulfill our congressionally chartered mission now and in the future." A spokesman for Freddie Mac noted that Poole is "a long-time critic," and said the company is "well capitalized and positioned to continue" its mission.

But the Bush administration has held talks about what to do in the event Fannie and Freddie falter, according to three people familiar with the matter, as the stock prices of both companies continue to fall sharply, The Wall Street Journal reported.

On Wednesday, Freddie shares fell 24% to close on the New York Stock Exchange at $10.26. Fannie shares dropped 13% to $15.31. For both companies, it was the lowest close in more than 15 years. Fannie's share price is down 76% from a year ago and Freddie is down 83%.

The shares of the two companies have plummeted for several reasons. Investors are worried they will suffer bigger losses as housing prices continue to fall and mortgage defaults rise. Stock-market investors are also worried they will need to raise significant amounts of capital to cover those losses. For stock investors, that means the value of their ownership stakes in the company will be cut. Bond investors continue to lend to both companies, though they are also demanding slightly higher interest rates.

The article continues here:

http://www.smartmoney.com/breaking-news/sm...=20080710085412

LaoPo

Edited July 10, 2008 by LaoPo