Global Correction

[Naam]

2007-08-17[/size] 20:25:54' post='1482481']

The global bust is coming and not all the liquidity, denial, and som tham in the world will prevent it........

Bingo is celebrating an anniversary tomorrow. but i must admit he was right. yesterday was one of the rare occasions when i ventured to downtown Pattaya to pick up a friend at the Marriott. waiting in the lobby a bunch of russian ladies passed by and (LO AND BEHOLD!)... one really had a global bust.

since then i'm trying to figure out "how did Bingo know?"

[VegasVic]

2007-08-17[/size] 20:25:54' post='1482481']

The global bust is coming and not all the liquidity, denial, and som tham in the world will prevent it........

Bingo is celebrating an anniversary tomorrow. but i must admit he was right. yesterday was one of the rare occasions when i ventured to downtown Pattaya to pick up a friend at the Marriott. waiting in the lobby a bunch of russian ladies passed by and (LO AND BEHOLD!)... one really had a global bust.

since then i'm trying to figure out "how did Bingo know?"

Any pictures so we can all see what a global bust looks like?

[LaoPo]

2007-08-17[/size] 20:25:54' post='1482481']

The global bust is coming and not all the liquidity, denial, and som tham in the world will prevent it........

Bingo is celebrating an anniversary tomorrow. but i must admit he was right. yesterday was one of the rare occasions when i ventured to downtown Pattaya to pick up a friend at the Marriott. waiting in the lobby a bunch of russian ladies passed by and (LO AND BEHOLD!)... one really had a global bust.

since then i'm trying to figure out "how did Bingo know?"

Any pictures so we can all see what a global bust looks like?

You better watch your eyes Vic...:

LaoPo

[Naam]

you were in the Marriott to LaoPo?

[LaoPo]

you were in the Marriott to LaoPo?

Unfortunately not...but I used my imagination how a global bust would look to please Vic....

I hope I have satisfied his curiosity

LaoPo

[cloudhopper]

Ugh! Now there's someone desperately in need of a global correction.

[bingobongo]

egg roll and denial are not going to help china.................

Shares in China hit 18-month low

http://www.iht.com/articles/2008/08/18/business/18yen.php

[englishoak]

Bingo,

So what other than " the sky is falling" your posts show a very narrow topical interest and indeed an even lower ability/willingness to engage in healthy debate.

Or am I missing something?

Edited August 18, 2008 by englishoak

[LaoPo]

egg roll and denial are not going to help china.................

Shares in China hit 18-month low

http://www.iht.com/articles/2008/08/18/business/18yen.php

Indeed Bingo. But the money lost in China is from within the country and is of no influence (yet) to the world's stockmarkets; its money from private shareholders who accepted their losses already; remember, Chinese are small time gamblers but hard workers and money-savers as well, not spenders like westerners.

QUESTION: and what will happen to the markets in the USA, EU, OZ and NZ, Japan...?... if the US government has to bail out mortgage giants Freddie Mac and Fannie Mae ?

All normal stockholders will freeze to death, having their stocks wiped off the earth....(although the giants lost already 90-93% of their value in 1 year)...

Fannie, Freddie Fall on Likely Need for a Bailout (Update6)

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

There's something VERY nasty in the air and I'm afraid it will surprise many with a shock, a BIG one.

It's prove of the fact that the financial system is SICK and in need of urgent oxygen (read: taxpayers money). It's also prove that the government has no other choice than to throw the rescue buoy, also because so much foreign-invested money is involved from the Arabs, Chinese, Japanese, Russians, amongst others.

What a world.

Some here act as a Silverback Gorilla (almost the same DNA as humans btw) proud as they are "I told you so" but not a bluddy single word about the sickening financial situation and/or predictions about so many companies in bad shape in the land of the Greatest Nation on Earth.

It's not over yet by far.

LaoPo

[cclub75]

Fannie, Freddie Fall on Likely Need for a Bailout (Update6)

There's something VERY nasty in the air and I'm afraid it will surprise many with a shock, a BIG one.

Some here act as a Silverback Gorilla (almost the same DNA as humans btw) proud as they are "I told you so" but not a bluddy single word about the sickening financial situation and/or predictions about so many companies in bad shape in the land of the Greatest Nation on Earth.

It's not over yet by far.

Of course it's not.

It's easy to mock Bongo and his first messages about the financial crisis in august last year... but the plan is unfolding exactly like predicted.

I mean, how people can pretend to be surprised by Fannie and Freddie ?

It's beyond comprehension.

Their underline business (real estate market/mortgages) is sinking non stop. Non stop.

The costs for capital is increasing... The mistrust is increasing.

How could those "companie" perform in such environment ?

They are toasted, they will be bailed out (too big to fail indeed), their shareholders will loose their shirt and their pants, the US tax payers will pay...

The only thing is that this process takes time.

The US has only one obsession : hide the extend of the damages... until the elections.

Edited August 19, 2008 by cclub75

[midas]

ail indeed), their shareholders will loose their shirt and their pants, the US tax payers will pay...

The only thing is that this process takes time.

The US has only one obsession : hide the extend of the damages... until the elections.

Yes this amazes me also ! Even the likes of Rico Hizon on BBC World Business report Asia

amazes me when he comes on screen some days and says things such as " is the

worst of the economic downturn finally over " ? !! We have just finished an economic expansion

which has gone on for a recorc number of years and yet they expect the downturn to be over in five minutes

[flying]

Yes this amazes me also ! Even the likes of Rico Hizon on BBC World Business report Asia

amazes me when he comes on screen some days and says things such as " is the

worst of the economic downturn finally over " ? !! We have just finished an economic expansion

which has gone on for a recorc number of years and yet they expect the downturn to be over in five minutes

I thought this has been going on for about a year now?

Edited August 19, 2008 by flying

[LaoPo]

It's easy to mock Bongo and his first messages about the financial crisis in august last year... but the plan is unfolding exactly like predicted.

FYI: I wasn't addressing at Bingo; it was meant for someone else. That one knows himself.

If you have followed my views a bit I have been criticizing the roots of the financial problems all along.

To say now that: "How could those "companie" perform in such environment ? They are toasted,...." is like giving Fannie/Freddie an excuse for what happened with them.

THEY were amongst the ones who created the <deleted> in the first place !

Your remark: "The US has only one obsession : hide the extend of the damages... until the elections." is only partly correct.

It's not (anymore) in the US and it's also not just 'hiding' the extend of the damages.

It's now all over the world and it's also that the boards of those financials/banks/insurers don't even KNOW yet how bad the damage is.

That's where the real pain is and that's exactly what causes the build up of the pyramids to collapse.....or rather THE ICEBERGS coming to surface...

LaoPo

[cloudhopper]

To say now that: "How could those "companie" perform in such environment ? They are toasted,...." is like giving Fannie/Freddie an excuse for what happened with them.

THEY were amongst the ones who created the <deleted> in the first place !

It's now all over the world and it's also that the boards of those financials/banks/insurers don't even KNOW yet how bad the damage is.

That's where the real pain is and that's exactly what causes the build up of the pyramids to collapse.....or rather THE ICEBERGS coming to surface...

LaoPo

Another iceberg surfacing:

In the mortgage industry, they are called "liar loans" — mortgages approved without requiring proof of the borrower's income or assets. The worst of them earn the nickname "ninja loans," short for "no income, no job, and (no) assets."

The nation's struggling housing market, already awash in subprime foreclosures, is now getting hit with a second wave of losses as homeowners with liar loans default in record numbers. In some parts of the country, the loans are threatening to drag out the mortgage crisis for another two years.

"Those loans are going to perform very badly," said Thomas Lawler, a Virginia housing economist. "They're heavily concentrated in states where home prices are plummeting" such as California, Florida, Nevada and Arizona.

Many homeowners with liar loans are stuck. They can't refinance because housing prices in those markets have nose-dived, and lenders are now demanding full documentation of income and assets.

Losses on liar loans could total $100 billion, according to Moody's Economy.com. That's on top of the $400 billion in expected losses from subprime loans.

Fannie Mae and Freddie Mac, the nation's largest buyers and backers of mortgages, lost a combined $3.1 billion between April and June. Half of their credit losses came from sour liar loans, which are officially called Alternative-A loans (Alt-A for short) because they are seen as a step below A-credit, or prime, borrowers.

Many of the lenders that specialized in such loans are now defunct — banks such as American Home Mortgage, Bear Stearns and IndyMac Bank. More lenders may follow.

The mortgage bankers and brokers who survived were more cautious, but acknowledge they too were swept up in the housing hysteria to some extent.

"Everybody drank the Kool-Aid" said David Zugheri, co-founder of Texas-based lender First Houston Mortgage. They knew if they didn't give the borrower the loan they wanted, the borrower "could go down the street and get that loan somewhere else."

The loans were also immensely profitable for the mortgage industry because they carried higher fees and higher interest rates. A broker who signed up a borrower for a liar loan could reap as much as $15,000 in fees for a $300,000 loan. Traditional lending is far less lucrative, netting brokers around $2,000 to $4,000 in fees for a fixed-rate loan.

During the housing boom, liar loans were especially popular among investors seeking to flip properties quickly. They were also commonly paired with "interest only" features that allowed borrowers to pay just the interest on the debt and none of the principal for the first several years.

Even riskier were "pick-a-payment" or option ARM loans — adjustable-rate mortgages that gave borrowers the choice to defer some of their interest payments and add them to the principal.

While some borrowers were aware of their risky features and used them to gamble on their home's value or pull out money for vacations, others like Salvatore Fucile insist they were victims of predatory lending.

Fucile, who is 82, and his wife, Clara, wound up in an option ARM from IndyMac after consolidating two mortgages on their suburban Philadelphia home. Fucile was attracted by the low monthly payments, but says the mortgage broker who signed him up for the loan didn't tell him the principal balance could increase. It has risen about $24,000 to $276,000.

"He put me in a bad position," said Fucile, who fears he will be forced into foreclosure. "He misled me."

IndyMac was taken over by the Federal Deposit Insurance Corp. last month.

FDIC spokesman David Barr declined to discuss the Fuciles' case, but said the agency has temporarily frozen all IndyMac foreclosures and is working on a broad plan to modify mortgages held by the Pasadena, Calif-based bank.

The low monthly payments of liar loans helped many home buyers afford to purchase in areas of the country where prices were skyrocketing. But they also helped drive up prices by allowing people to buy more than they could truly afford. Case in point: about 40 percent of loans made in California and Nevada in 2005 and 2006 were either interest-only or option ARMs, according to First American CoreLogic.

"It was pretty evident that the only thing that was supporting these loans was higher home prices" said Tom LaMalfa, managing director at Wholesale Access, a Columbia, Md.-based mortgage research firm.

Now that prices have fallen, almost 13 percent of borrowers with liar loans were at least two months behind on their payments in May, nearly four times higher than a year earlier, according to First American CoreLogic.

Countrywide Financial Corp., now part of Bank of America Corp., was one of the top providers of liar loans. The company is now is paying the price. More than 12 percent of Countrywide's $25.4 billion in pick-a-payment loans are in default, and 83 percent had little or no documentation, according to a Securities and Exchange Commission filing last week.

Critics say Fannie Mae and Freddie Mac, which bought or guaranteed liar loans from lenders including Countrywide and IndyMac, should have stuck with traditional 30-year, fixed-rate mortgages.

"I personally think that they ventured beyond their mission," said Richard Smith, a mortgage broker in Chattanooga, Tenn. Because of their decision to back shakier loans, he said, "the home-buying public is going to have to pay."

Fannie and Freddie entered the market for risky loans just as they emerged from accounting scandals. At the time, Wall Street giants such as Bear Stearns and Lehman Brothers Holdings Inc. were backing a growing share of ever-riskier loans, and both government-sponsored companies felt pressure to compete.

Freddie Mac wanted "to stay competitive in the market and take steps to preserve market share," spokesman Michael Cosgrove said.

Fannie Mae increased its purchases of liar mortgages "at the requests of many of our customers," according to spokesman Brian Faith.

Both companies also were able to use subprime and liar-loan investments to meet government-set affordable housing goals.

Now Fannie, Freddie and other mortgage investors are reviewing defaulted loans to see if lenders committed fraud. If they find enough evidence, they could force lenders to assume responsibility for losses.

But it's unclear how much money they might recover, especially from lenders that have gone under or been seized by the government.

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[Naam]

Yes this amazes me also ! Even the likes of Rico Hizon on BBC World Business report Asia

amazes me when he comes on screen some days and says things such as " is the

worst of the economic downturn finally over " ? !! We have just finished an economic expansion

which has gone on for a recorc number of years and yet they expect the downturn to be over in five minutes

I thought this has been going on for about a year now?

the first indications surfaced end of june 2007 and in july it was clear that the financial institutions are in for big losses. but at that time hardly anybody expected that the losses were not just big but HUGE. talking about a big global economic downturn is not at all warranted, at least not at this time. falling stock markets do not mean necessarily an economic downturn. if that was the case one wouldn't see growth but recession. yes, there are a few countries which show recessionary tendencies but the majority of countries (which count) are still in positive territory.

as far as private investors are concerned i don't pity those who did not recognize the troubles of the banking sector and the global liquidity crisis and did not position themselves accordingly. it' no surprise that those who don't do their homework, respectively learn their lessons will get bad grades.

p.s. CASH IS STILL KING!

[LaoPo]

Yes this amazes me also ! Even the likes of Rico Hizon on BBC World Business report Asia

amazes me when he comes on screen some days and says things such as " is the

worst of the economic downturn finally over " ? !! We have just finished an economic expansion

which has gone on for a recorc number of years and yet they expect the downturn to be over in five minutes

I thought this has been going on for about a year now?

the first indications surfaced end of june 2007 and in july it was clear that the financial institutions are in for big losses. but at that time hardly anybody expected that the losses were not just big but HUGE. talking about a big global economic downturn is not at all warranted, at least not at this time. falling stock markets do not mean necessarily an economic downturn. if that was the case one wouldn't see growth but recession. yes, there are a few countries which show recessionary tendencies but the majority of countries (which count) are still in positive territory.

as far as private investors are concerned i don't pity those who did not recognize the troubles of the banking sector and the global liquidity crisis and did not position themselves accordingly. it' no surprise that those who don't do their homework, respectively learn their lessons will get bad grades.

p.s. CASH IS STILL KING!

I agree a long way here Naam but regarding the private investors in the banking sector I have to say that I pity some of them.

Why ?

Because a lot of those banks -read: CEO's- have been persistently lying to their shareholders for a long time KNOWING THAT THEY WERE IN BAD SHAPE. An example is FORTIS, the Belgian-Dutch financial.

They should have put those crooks in jail but heck no: they send them away wit a bag full of money.

Other examples are UBS and Deutsche Bank but there are lots of others as you know.

Meaning: how on earth can a simple small time shareholder KNOW that these CEO's were lying ?

But: one thing is for sure, as we both have been saying now for quite some time: CASH IS KING INDEED.

LaoPo

[midas]

Yes this amazes me also ! Even the likes of Rico Hizon on BBC World Business report Asia

amazes me when he comes on screen some days and says things such as " is the

worst of the economic downturn finally over " ? !! We have just finished an economic expansion

which has gone on for a recorc number of years and yet they expect the downturn to be over in five minutes

I thought this has been going on for about a year now?

Well it is five minutes figuratively speaking when you take into account LaoPo's comments in post 1093

which I totally agree with :- .

i.e. also that the boards of those financials/banks/insurers don't even KNOW yet how bad the damage is.

We cannot even see a light at the end of the tunnel -in fact we have only just entered the tunnel so how can

people on the BBC even talk about the worst being over - that is my point.

[lannarebirth]

ail indeed), their shareholders will loose their shirt and their pants, the US tax payers will pay...

The only thing is that this process takes time.

The US has only one obsession : hide the extend of the damages... until the elections.

Yes this amazes me also ! Even the likes of Rico Hizon on BBC World Business report Asia

amazes me when he comes on screen some days and says things such as " is the

worst of the economic downturn finally over " ? !! We have just finished an economic expansion

which has gone on for a recorc number of years and yet they expect the downturn to be over in five minutes

It does take time. It's important to remember this process didn't start last year but 8 years ago. In real $USD terms the US markets have been correcting for many years.

[midas]

[

It does take time. It's important to remember this process didn't start last year but 8 years ago. In real $USD terms the US markets have been correcting for many years.

OK lannarebirth now that the bankers seem to appreciate just how little they know really understand

about the extent of their problems for how long can we expect a bear market to continue? And is history

any guide anyway given the unique circumstances of our current problems ? Wasnt it Warren Buffett

who dismissed the importance or value of relying on information from the past to forecast what might happen in the future?

[Naam]

Meaning: how on earth can a simple small time shareholder KNOW that these CEO's were lying ?

But: one thing is for sure, as we both have been saying now for quite some time: CASH IS KING INDEED.

LaoPo

touché LaoPo! i stand corrected.

[lannarebirth]

Meaning: how on earth can a simple small time shareholder KNOW that these CEO's were lying ?

But: one thing is for sure, as we both have been saying now for quite some time: CASH IS KING INDEED.

LaoPo

touché LaoPo! i stand corrected.

I take it as an article of faith, that any CEO that is more interested in managing his company's stock price, than he is in manging his company's growth in earnings, will be by necessity, a liar.

[pkrv]

Ahhhhaaaaa!

I have finally found the perfect article for you Bingo!

Knock yourself out - Its actually on the The Lisbon Treaty (sort of).

[lannarebirth]

[

It does take time. It's important to remember this process didn't start last year but 8 years ago. In real $USD terms the US markets have been correcting for many years.

OK lannarebirth now that the bankers seem to appreciate just how little they know really understand

about the extent of their problems for how long can we expect a bear market to continue? And is history

any guide anyway given the unique circumstances of our current problems ? Wasnt it Warren Buffett

who dismissed the importance or value of relying on information from the past to forecast what might happen in the future?

I rely less on information than even Mr. Buffet does. I'm just telling you where we're at, and it's further along than many people seem to think. You couldn't color me bullish however.

The problem with the markets isn't whatever is currently in the news. The problem is that everyone's in already or looking to get in. That tells me, that at these prices, better opportunities lie elsewhere. Great for trading though.

Too many people focused on return on capital, rather than return of capital.

[pkrv]

Too many people focused on return on capital, rather than return of capital.

IMO that was actually quite profound. So here we go - me can I have my money back now please . Answer - sorry no - Look was only in it for the bonuses and commission - but you will be pleased to hear I have several houses (not sure how many) yachts (I get sea sick) 75 pairs of pedigree dogs - vintage cars and most importantly - LOTS OF SHOES isn't this an important lesson? Sell shoes to these people or don't bother with them?

[Naam]

Too many people focused on return on capital, rather than return of capital.

i'd happily forgo the return of my capital if there was a secure way to receive an appropriate and infinite return on my capital. unfortunately that is a wet dream

[lannarebirth]

Too many people focused on return on capital, rather than return of capital.

i'd happily forgo the return of my capital if there was a secure way to receive an appropriate and infinite return on my capital. unfortunately that is a wet dream

I'm with you. Tough doing business with fiduciary criminals though.

[LaoPo]

Too many people focused on return on capital, rather than return of capital.

i'd happily forgo the return of my capital if there was a secure way to receive an appropriate and infinite return on my capital. unfortunately that is a wet dream

I'm with you. Tough doing business with fiduciary criminals though.

So true, and as I mentioned before: "Banks are legalized Mafia"

Also:

Large U.S. Banks May Fail Amid Recession, Rogoff Says (Update2)

By Shamim Adam

Aug. 19 (Bloomberg) -- Credit market turmoil has driven the U.S. into a recession and may topple some of the nation's biggest banks, said Kenneth Rogoff, former chief economist at the International Monetary Fund.

``The worst is yet to come in the U.S.,'' Rogoff said in an interview in Singapore today. ``The financial sector needs to shrink; I don't think simply having a couple of medium-sized banks and a couple of small banks going under is going to do the job.''

The U.S. housing slump has triggered more than $500 billion of credit market losses for banks globally and led to the collapse and sale of Bear Stearns Cos., the fifth-largest U.S. securities firm. Rogoff said the government should nationalize Fannie Mae and Freddie Mac, the nation's biggest mortgage-finance companies, which have lost more than 80 percent of market value this year.

Freddie Mac and Fannie Mae ``should have been closed down 10 years ago,'' he said. ``They need to be nationalized, the equity holders should lose all their money. Probably we need to guarantee the bonds, simply because the U.S. has led everyone into believing they would guarantee the bonds.''

U.S. Treasury Secretary Henry Paulson asked Congress on July 13 for emergency powers to inject ``unspecified'' amounts of government funds into the companies if necessary.

Shares Slump

The mortgage lenders have been battered by record delinquencies and rising losses. Fannie Mae fell in European trading to the lowest in 19 years today amid concern the government-chartered companies will fail to raise the capital they need to offset losses. Freddie Mac slid 25 percent yesterday to the lowest since January 1991.

Banks repossessed almost three times as many U.S. homes in July as a year earlier and the number of properties at risk of foreclosure jumped 55 percent, according to RealtyTrac Inc., an Irvine, California-based seller of foreclosure data. U.S. builders probably broke ground on the fewest houses in 17 years last month, according to a Bloomberg News survey.

Rogoff told a conference in Singapore today that the credit crisis is likely to worsen and a large bank may fail, Reuters reported earlier. Rogoff, 55, is a professor of economics at Harvard University. He was the IMF's chief economist from August 2001 to September 2003.

``Like any shrinking industries, we are going to see the exit of some major players,'' Rogoff told Bloomberg, declining to name the banks he expects to fail. ``We're really going to see a consolidation even among the major investment banks.''

IndyMac Bancorp

IndyMac Bancorp Inc., once the second-largest U.S. independent mortgage lender until it was seized by regulators July 11, filed for bankruptcy protection Aug. 1, three weeks after it was taken over by the Federal Deposit Insurance Corp. amid a run by depositors that left it strapped for cash. Bear Stearns collapsed in March and sold itself to JPMorgan Chase & Co. for $10 a share.

``The only way to put discipline into the system is to allow some companies to go bust,'' Rogoff said. ``You can't just have an industry where they make giant profits or they get bailed out.''

The world's largest economy is already in a recession, and the housing market will continue to deteriorate, Rogoff said. The U.S. slowdown will last into the second half of next year, he said, predicting a faster recovery in Europe and Asia.

The Federal Reserve, which has left its key interest rate at 2 percent after the most aggressive series of rate reductions in two decades, risks raising inflationary pressures, he said.

``Rates are too low,'' Rogoff said. ``They must realize we're going to get inflation if things stay where they are. They need to raise rates but I don't think they are going to because they're way too nervous.''

-Bloomberg

LaoPo

[bingobongo]

get ready..............

Naam, how much are adult diapers?

Sharp US money supply contraction points to Wall Street crunch ahead

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/19/cnusecon119.xml

[Naam]

you forgot again to jerk off today Bingo?

[pkrv]

get ready..............

Naam, how much are adult diapers?

Sharp US money supply contraction points to Wall Street crunch ahead

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/19/cnusecon119.xml

Ohh surely we can ride up on Pantaloon can we not?