Global Correction

[lannarebirth]

the plan proposed by Paulson will only lead to a short term bounce, and i agree with AlexLah, great pain is coming to global bourses........the proposed $1 trillion fund intended to fund this bailout compared to the $45 trillion debt market and the even larger derivatives time bomb.

it wont have any substantial impact except for being highly inflationary and making foreign governments decide to longer buy US debt thereby ramping up interest rates

and yes LOS will feel the pain as well

strap in

Not much did I pay attention to fundamentals except sentiment in the markets and its observers but considering the latest step of the US and UK pumping in worthless paper into companies which grew and failed by greed and fraud only I am getting a bit worried about financial prospects here. The new short selling rule is a temporary one only as it would suck out a lot of liquidity from the markets in the long run causing much more damage than support or improvement.

Would they not have come up with some action on the other hand we definitely would have seen a real crash. Many funds and institutionals were now forced to not only cover shorts but also to take new positions in order not to miss another manipulated upswing should it continue.

A possible war breaking out in the near future nevertheless will guide to an unavoidable disaster bringing along a long overdue correction to global equity markets with an exeggeration to the downside and complete revaluation.

The ban on short sales was designed to put some air under the market. in case some exogenous event were to have occured at the lows. if said event comes, we should now remain in historic ranges, rather than at new lows.

Well, I hope you dont believe that a ban of short selling can protect the market from plunging, it is rather the opposite and if then it wont look back after starting the move. In case we get a war we get a disaster you can bet on that.

No, I don't believe that at all. In fact, lack of shorts in the market opens the possibility of a plunge even further. Shorts are buyers in the market. The removal of those buyers was just plain stupid.

You know, I'm not a conspiracy theorist generally (accept for what I know about how wall street works, which many other people tell me are my own conspiracy theories), but when events occur, I like to see who wins and who loses. I think looking at things from that perspective is very revealing.

[Naam]

more of the "mother of all bail-outs":

http://www.reuters.com/article/businessNew...ews&sp=true

[lannarebirth]

But surely what this also advertises to the terrorist groups is just how short money

the US Government is going to be in the future ? I dont understand how the Americans could even think of electing

John McCain knowing he will commit the forces to stay in the battlefield for

another " 100 years " with worn out equipment and worn out soldiers.

Where will the money come from for all these promises and obligations............?

printing press

Oh yeah, they'll be putting on new shifts of printing crews and the new phase of economic expansion will be driven by ink and paper sales. And for what?

You know, in one respect America is a lot like Thailand. Instead of it's daughters, it trades it's sons for the promise of economic growth. Now it's selling the productive lives of it's unborn children to supply a life of leisure to the present crop of leisure seeking retirees.

Anyhow, I doubt very much if it will be only Americas presses running around the clock. It's only paper and ink and I think every country might join in.

[Naam]

But surely what this also advertises to the terrorist groups is just how short money

the US Government is going to be in the future ? I dont understand how the Americans could even think of electing

John McCain knowing he will commit the forces to stay in the battlefield for

another " 100 years " with worn out equipment and worn out soldiers.

Where will the money come from for all these promises and obligations............?

printing press

Oh yeah, they'll be putting on new shifts of printing crews and the new phase of economic expansion will be driven by ink and paper sales. And for what?

You know, in one respect America is a lot like Thailand. Instead of it's daughters, it trades it's sons for the promise of economic growth. Now it's selling the productive lives of it's unborn children to supply a life of leisure to the present crop of leisure seeking retirees.

Anyhow, I doubt very much if it will be only Americas presses running around the clock. It's only paper and ink and I think every country might join in.

many of them!

[Naam]

No, I don't believe that at all. In fact, lack of shorts in the market opens the possibility of a plunge even further. Shorts are buyers in the market. The removal of those buyers was just plain stupid.

that is correct but it's the time lag between shorting and covering that counts. i think the temporary removal was invoked to add some confidence to those "jittery hands" which are influenced by falling prices and tempted to sell.

[LaoPo]

Euronext stock market in The Netherlands, France and Belgium will put a ban on so called "Naked-short selling" as of Monday, September 22nd also; for a period of 3 months. A list with stocks will follow.

The UK, USA and Germany had a ban in place already.

and Taiwan follows:

Taiwan Bans Short Selling of 150 Key Index Stocks for 2 Weeks

By Janet Ong

Sept. 21 (Bloomberg) -- Taiwan's financial regulator placed a ban on the short-selling of 150 stocks for two weeks starting Sept. 22, following similar moves by U.S., U.K. and Canadian regulators.

The 150 stocks, members of the Taiwan 50 Index, Taiwan Mid- Cap 100 and Taiwan Technology Index, will be banned from short- selling when they trade below the previous session's close, the Financial Supervisory Commission staid in a statement today.

``The move is to maintain market order and stability, raise investors confidence and boost the market,'' the regulator said. The halt will start from Sept. 22 and will be in effect until Oct. 3, unless it's further extended, according to the statement.

The U.S. Securities and Exchange Commission halted the short selling of 799 financial companies in a move to combat investors seeking to drive down shares following the collapse of Lehman Brothers Holdings Inc. and the bailout of American International Group Inc.

Short sellers borrow stocks and sell them, betting the price will fall and they'll be able to buy them later, return them to the lender, and pocket the difference in price.

--Bloomberg

LaoPo

[LaoPo]

Is he bluffing...or.....?

Paulson Says Several Countries May Adopt Bank Rescue Plans

By John Brinsley

Sept. 21 (Bloomberg) -- Treasury Secretary Henry Paulson said he's confident several countries will take steps comparable to the $700 billion plan he proposed to buy bad mortgage-related securities to address the global financial crisis.

``We are talking very aggressively with other countries around the world and encouraging them to do similar things, and I believe a number of them will,'' Paulson said on ABC News' ``This Week'' program.

Paulson yesterday asked Congress for unfettered authority to buy devalued mortgage-related securities from investment firms in an effort to keep the financial system from coming to a standstill. The proposal would prevent courts from reviewing the Treasury's actions while raising the nation's debt ceiling.

German Finance Ministry spokesman Stefan Olbermann said members of the Group of Seven industrial nations are in ``ongoing talks about the situation on financial markets worldwide.'' Finance ministers from the G-7 countries meet in Washington on Oct. 10.

Asked about the U.S. plan, Olbermann said, ``We have to see if and to what extent those measures make sense for Germany.''

The U.K. currently has no plans to set up such a fund, a British Treasury official said.

Prime Minister Gordon Brown today said ``in relative terms, we've done a huge amount'' by giving banks access to more than 100 billion pounds ($183 billion) under a Bank of England program that allows them to swap bonds hurt by the collapse of the subprime mortgage market.

While a French finance ministry spokesman declined to comment on Paulson's latest remarks, Finance Minister Christine Lagarde spoke with U.S. officials during the week and told Europe 1 radio today that the U.S. response had ``allowed us to avoid a systemic crisis.''

Treasury's Plan

``We have obstacles to overcome,'' Lagarde said.

The U.S. Treasury late yesterday modified its proposal to allow for purchases from institutions outside of the U.S., a step Paulson today said was needed to mute the impact of the credit crisis in the U.S.

``As you think about this, if a financial institution has business operations in the United States, hires people in the United States, if they are clogged with illiquid assets, they have the same impact on the American people as any other institutions,'' he told ABC News.

--Bloomberg

LaoPo

[LaoPo]

Australia follows:

Australian Exchange to Abolish `Naked' Short Selling (Update1)

By Jacob Greber

Sept. 19 (Bloomberg) -- The Australian Securities Exchange said it will abolish so-called ``naked'' short selling from the start of next week.

The change will be reviewed when the government amends laws related to the reporting of ``covered'' short selling, the Sydney-based ASX said in an e-mailed statement today. The exchange will still allow ``covered'' short selling.

The move comes after the U.S. Securities and Exchange Commission halted short selling of financial companies in a bid to stymie speculators seeking to benefit from the credit crisis that led to the collapse of Lehman Brothers Holdings Inc. and American International Group Inc.

Short sellers try to profit by betting stock prices will fall. In a short sale, traders borrow shares from their broker that they then sell. If the price drops, they buy back the stock, return it to their broker and pocket the difference.

In ``naked'' short selling, traders never borrow the shares, raising concerns that investors are flooding markets with sell orders to drive down prices.

--Bloomberg

LaoPo

[LaoPo]

Traders have ways around short-sale ban: Journal

By MarketWatch

Last update: 3:32 a.m. EDT Sept. 21, 2008

TEL AVIV (MarketWatch) - U.S. and U.K. regulators may have restricted short sales, but investors have other tools to protect themselves from falling share prices, The Wall Street Journal reported.

And some consequences of the restrictions might be unintended, the paper reported.

The U.K. Financial Services Authority on Thursday restricted short sales of financial stocks. The U.S. Securities and Exchange Commission on Friday banned shorting - bets that a security's price would drop - of roughly 800 financial-services stocks through Oct. 2.

Volumes in credit-default swaps, other derivatives trades and options are likely to rise in the wake of the short-sale restrictions, the Journal reported on Saturday.

Derivatives like credit-default swaps aren't publicly traded, and their growth and their lack of transparency have raised concern, the Journal reported.

In addition, some exchange-traded funds enable bets against the financial sector, and short-sellers might now turn their attention to financial-related stocks that aren't on the regulators' restricted list, the paper reported.

The short-sale restrictions also could affect the corporate-bond market, the Journal said. Investors who buy convertible bonds will often short the same company's stock as a hedge, the paper said.

http://www.marketwatch.com/news/story/shor...printMidSection

LaoPo

[glyph]

A lot of cutting and pasting, for sure. But, I don't see any individual critical analysis of the cited references.

[Wrong Turn]

A lot of cutting and pasting, for sure. But, I don't see any individual critical analysis of the cited references.

I think there's a reason why by many of us. (Including me, but I don't post on these topics because with the discussion about derivatives, it's over my head.)

My point: we know what is happening now in the laymen and general sense. It's interesting to discuss.

But we do not know what will happen tomorrow, next week, next month, or in the next year.

Does anybody?

It's a strange time. And economics has never been a "future" field. Only the past and the present.

[LaoPo]

Not much faith in the BAILOUT RESCUE OPERATION....

Dow 11,015.69 -372.75 (-3.27%)

Nasdaq 2,178.98 -94.92 (-4.17%)

S&P 500 1,207.09 -47.99 (-3.82%)

LaoPo

[flying]

Not much faith in the BAILOUT RESCUE OPERATION....

Dow 11,015.69 -372.75 (-3.27%)

Nasdaq 2,178.98 -94.92 (-4.17%)

S&P 500 1,207.09 -47.99 (-3.82%)

LaoPo

I think when it first came out many like myself thought ahhhh relief of some kind.

Then this weekend we all got to read the specifics of it & realized

What a mess & the fact that this may be just the tip of the iceberg does not help build confidence.

[glyph]

"It's interesting to discuss..."

Cutting and pasting isn't discussing. OK, let's discuss it...the 1.5 trillion USD is about 1/4th of the money that Bush43 has committed to the war in Iraq. How about this: there is 100T USD in residential mortgages in the US, and the ballout package represents less than 2% of that.

[Naam]

"It's interesting to discuss..."

Cutting and pasting isn't discussing. OK, let's discuss it...the 1.5 trillion USD is about 1/4th of the money that Bush43 has committed to the war in Iraq. How about this: there is 100T USD in residential mortgages in the US, and the ballout package represents less than 2% of that.

???

[Naam]

where is Bingo and Vic? we need some guidance here! Bingo for doom and gloom and Vic to tell us how the Greatest Nation on Earth™ will in no time ascend to old glory and that soon the dollar will be fully backed by gold

[LaoPo]

"Meanwhile, The Wall Street Journal reported that automakers, student lenders and others are lobbying to get their troubled assets included in the Treasury bank asset plan."

...others....? maybe Bingo and Vic are working hard to get their loans included as well ? Hmmmm...I'm considering to put mine on the list as well

What a world....

http://www.marketwatch.com/news/story/us-f...2-5677DC3EADA8}

LaoPo

[bingobongo]

"Meanwhile, The Wall Street Journal reported that automakers, student lenders and others are lobbying to get their troubled assets included in the Treasury bank asset plan."

...others....? maybe Bingo and Vic are working hard to get their loans included as well ? Hmmmm...I'm considering to put mine on the list as well

What a world....

http://www.marketwatch.com/news/story/us-f...2-5677DC3EADA8}

LaoPo

sorry Lao, no loans for me, 100% assets and no liabilities, excpet for my many short positions which i have no need to close

Edited September 23, 2008 by bingobongo

[LaoPo]

Not much faith in the BAILOUT RESCUE OPERATION....

Dow 11,015.69 -372.75 (-3.27%)

Nasdaq 2,178.98 -94.92 (-4.17%)

S&P 500 1,207.09 -47.99 (-3.82%)

LaoPo

And, the day after, Sept. 23 - 2008, faith didn't return, yet...

Dow 10,847.87 -167.82 (-1.52%)

Nasdaq 2,155.34 -23.64 (-1.08%)

S&P 500 1,188.00 -19.09 (-1.58%)

edit:

U.S. Stocks Fall in Market's Worst Two-Day Drop Since 2002

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

LaoPo

Edited September 23, 2008 by LaoPo

[LaoPo]

Warren Buffett's Berkshire to invest at least $5 bln -of perpetual preferred stock- in Goldman Sachs ***

"The preferred stock has a dividend of 10% and is callable at any time at a 10% premium. Berkshire Hathaway will also get warrants to purchase $5 billion of Goldman common stock with a strike price of $115 each. Buffett can exercise these at any time over five years, Goldman said in a statement.''

http://www.marketwatch.com/news/story/berk...7-B0C68B1975D6}

Note:

On 17-09-2008, 6 days ago, member 'Professor' VegasVic wrote this:

"Lets not tell everyone the truth that GS -Goldman Sachs- remains highly profitable despite the worldwide financial crisis and billions in write downs, no sir that would take some degree of honesty, something that you seem to be unaccustomed to . To take an objective view and not cherry pick your facts seems to be a mission impossible to you biggrin.gif . Goingforward GS -Goldman Sachs- and MS -Morgan Stanley- are the last of the goliaths standing and they will split the world between them (hows that for a scarey thought)"

1. Well Professor, any explanation from your side how come one of your last -highly profitable- Goliaths need a humble man like Buffett and his Billions of Cash to help and save your Goliath company ?

2. And how come another of your Goliaths, Morgan Stanley had to sell an equity stake of $ 8,5 Billion or 20% of the shares to Japanese Mitsubishi UFJ Financial Group Inc; the world's No. 2 bank by deposits ?

3. and...wasn't it you who wrote -just 13 days ago- about Mr. Warren Buffett: "I guess the old man really is slippping...." ?

Well Viccy*, I have more respect for Mr. Buffett than you...in my eyes he is one of the Great Americans and a man like him doesn't deserve ''low'' comments from a fellow American like yourself.

* I stripped you from the title 'Professor'; doesn't fit you

http://www.thaivisa.com/forum/Warren-Buffe...30#entry2207130

*** Bloomberg even speaks of $ 7,5 Billion to be invested in Goldman:

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

LaoPo

Edited September 23, 2008 by LaoPo

[Naam]

i chuckled about the "goliaths" but refrained from commenting. reason why i chuckled? in "our" group which consists of bankers and investors we have (amongst other bankers) two members from MS and one from GS who are (since spring of this year) scared shÍtless because they might lose their jobs.

[LaoPo]

i chuckled about the "goliaths" but refrained from commenting. reason why i chuckled? in "our" group which consists of bankers and investors we have (amongst other bankers) two members from MS and one from GS who are (since spring of this year) scared shÍtless because they might lose their jobs.

..yes, and these three are the ones you know....there are many more already on the streets and more to come, also and especially from those Goliaths.

10's of thousands in NY and London packed their boxes with private belongings already, stepped in their Jaguars, Ferrari's, Bentley's, Benzes and Porches.....back home.

What's worse (so I read) that for every high paid banker/financier/stock broker etc. 4 more people will lose -or already lost- their jobs, closely related to the service industry, catering to those banks and institutions c.s.

LaoPo

[Naam]

..yes, and these three are the ones you know....there are many more already on the streets and more to come, also and especially from those Goliaths.

10's of thousands in NY and London packed their boxes with private belongings already, stepped in their Jaguars, Ferrari's...,

LaoPo

washed the (95% financed) cars, looked for the second key set and then returned the cars to the dealerships.

[lannarebirth]

Well, I wouldn't be going to Mr. Buffet for a loan. He drives a harder bargain than my 4'9" 90 year old Tuscan grandmother. Heads he wins, tails you lose.

[LaoPo]

Well, I wouldn't be going to Mr. Buffet for a loan. He drives a harder bargain than my 4'9" 90 year old Tuscan grandmother. Heads he wins, tails you lose.

He sure is one tough cookie.....and he made a fabulous deal -for Berkshire- with Goldman

Your grandmother is from Tuscany ?...wow, that's a beautiful area; spent a lot of time there...business; long time ago.

LaoPo

[LaoPo]

All will be well soon now that Republican presidential candidate McCain has decided to suspend his campaign and return to WASHINGTON to deal with the current bailout debate.

McCain to suspend campaign over bailout crisis

By Wallace Witkowski

Last update: 3:02 p.m. EDT Sept. 24, 2008

SAN FRANCISCO (MarketWatch) -- Republican presidential candidate John McCain said Wednesday he will suspend his campaign to return to Washington to deal with the current bailout debate. McCain also called for a delay of Friday's debate with Barack Obama, the first of three scheduled debates, to focus on the current financial crisis.

--THE WALL STREET JOURNAL/MarketWatch

LaoPo

[LaoPo]

All will be well soon now that Republican presidential candidate McCain has decided to suspend his campaign and return to WASHINGTON to deal with the current bailout debate.

McCain to suspend campaign over bailout crisis

By Wallace Witkowski

Last update: 3:02 p.m. EDT Sept. 24, 2008

SAN FRANCISCO (MarketWatch) -- Republican presidential candidate John McCain said Wednesday he will suspend his campaign to return to Washington to deal with the current bailout debate. McCain also called for a delay of Friday's debate with Barack Obama, the first of three scheduled debates, to focus on the current financial crisis.

--THE WALL STREET JOURNAL/MarketWatch

LaoPo

BREAKING NEWS CNN:

Obama initiated a possible JOINT press statement* about the serious financial situation and phoned McCain in the morning on Wednesday (Sept. 24) and McCain returned the call on 2.30PM to ask for a JOINT return to Washington to discuss the serious situation with all financial specialists involved i.e. Paulson, Bernanke, The President etc.

McCain wants to postpone/delay the upcoming Friday debate; Obama wants to continue with the debate.

* it was mentioned that both parties were working on a joint press release.

ps: if I mention something -in detail- wrong, pls feel free to correct me.

LaoPo

[cclub75]

Obama initiated a possible JOINT press statement* about the serious financial situation and phoned McCain in the morning on Wednesday (Sept. 24) and McCain returned the call on 2.30PM to ask for a JOINT return to Washington to discuss the serious situation with all financial specialists involved i.e. Paulson, Bernanke, The President etc.

What a strategic mistake the Democrats made... by choosing Obama. They were fooled like all the others ("the economy is sound" mantra).

With the crisis, Hillary would have nailed McCain. Anyway.

So now, Obama wants to help those who created this mess ? The "sacred union" idea is pure bullshit. They have an elections in 1 month and 2 weeks... and people are angry !

Dangerous game I think.

Edited September 24, 2008 by cclub75

[bingobongo]

interesting they said the same about (that everything was ok) IndyMac and Washington Mutual.........

for those who think Asia is immune, you truly are dumber than you think..........its coming..........and yes, LOS will take it on the chin like a bar girl after servicing a farang on the little blue pill..............

the current global derivative market exposure is $47 TRILLION, good luck

Hong Kong Savers Line Up as Bank of East Asia Rebuffs Rumors

The bank's image was tarnished on Sept. 18 as it reduced its first-half profit by HK$109 million because of ``manipulation'' of the valuation on equity derivatives it holds.

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

Edited September 25, 2008 by bingobongo

[Naam]

What a strategic mistake the Democrats made... by choosing Obama. They were fooled like all the others ("the economy is sound" mantra).

McCain used more or less the same words!