We're On Our Way Up...

[lannarebirth]

You know Goldman Sachs are liars, right? They make the market in what you buy and will at some point flip over to the other side of your trade. They trade for their own account and use you to provide the liquidity to make that happen. Can't really call it "investing" anymore, can we?

[LaoPo]

Myself, Lazeeboy and a few others excluded, the majority of people on TV, including Lao Po are pessimistic. Hence to me it seemed to actually contradict Lao Po's comments to an extent.

For a newbie, judging about 'the majority of people on Thaivisa' you must possess a lot of knowledge....

There's a huge difference between pessimistic and realistic. I am the latter; realistic.

I note what I'm seeing, reading and watching and keep in mind that the large financials/mortgage banks/ banks and insurers are shrewd institutions who lie and cheat upon normal investors AND shareholders and will do whatever they like to make the balance sheets look good....

On top of that we have governments who lie as hard because they're in the same train as the previous mentioned institutions.

If you want to call me pessimistic, it's up to you. I call it being realistic in a financial jungle with many predators.

Did anybody say "Welcome to Thaivisa, newbie" yet ?

LaoPo

[NovaBlue05]

The term "newbie" is a bit odd in an internet forum.

[LaoPo]

The term "newbie" is a bit odd in an internet forum.

Newbie* : I learned the term here, on TV

For someone who's a member since 2 1/2 weeks with 24 posts and claiming he knows that 'the majority of people on Thaivisa are pessimistic' (about economics/finance) he sure acts like a newbie.

Newbie is a slang term for a newcomer to online gaming or an Internet activity.

* http://en.wikipedia.org/wiki/Newbie

LaoPo

[NovaBlue05]

The term "newbie" is a bit odd in an internet forum.

Newbie* : I learned the term here, on TV

For someone who's a member since 2 1/2 weeks with 24 posts and claiming he knows that 'the majority of people on Thaivisa are pessimistic' (about economics/finance) he sure acts like a newbie.

Newbie is a slang term for a newcomer to online gaming or an Internet activity.

* http://en.wikipedia.org/wiki/Newbie

LaoPo

Hmnnnn....Sorry..but I still find it odd.....

[AFKAFSinLOS]

Myself, Lazeeboy and a few others excluded, the majority of people on TV, including Lao Po are pessimistic. Hence to me it seemed to actually contradict Lao Po's comments to an extent.

For a newbie, judging about 'the majority of people on Thaivisa' you must possess a lot of knowledge....

There's a huge difference between pessimistic and realistic. I am the latter; realistic.

I note what I'm seeing, reading and watching and keep in mind that the large financials/mortgage banks/ banks and insurers are shrewd institutions who lie and cheat upon normal investors AND shareholders and will do whatever they like to make the balance sheets look good....

On top of that we have governments who lie as hard because they're in the same train as the previous mentioned institutions.

If you want to call me pessimistic, it's up to you. I call it being realistic in a financial jungle with many predators.

Did anybody say "Welcome to Thaivisa, newbie" yet ?

LaoPo

A quick scan through the topics and skim read of the posts is enough to get a feel of the forum. Say 30 regular posters max on economics/business/markets. I wasn't referring spefically to yourself, Lao Po, on being pessimist or realist. More a reflection of the general mood/ impression one gets reading here. Often easier for a "newbie" to form a quick impression, than someone who's been on the inside a long time.

Anyway thanks for the welcome

Also, I'll remember next time when discussing economics, business and the markets, it's not how much you know or deduce, but how long you've been on Thai Visa that really is the real measure of your business/financial/economic acumen. Perhaps that's where Greenspan and now Bernanke went wrong. Now, if they'd have done their time on Thai Visa forum, as a "newbie" earning their spurs, maybe the world would be in better shape. On second thoughts, maybe that's what they've actually been basing their economic policy on for the last few years - Reading Thai Visa posts Come on. Own up. Who on here is really Greenspan or Bernanke under a pseudonym.. UBS CEO anyone?

Edited April 3, 2008 by AFKAFSinLOS

[AFKAFSinLOS]

You know Goldman Sachs are liars, right? They make the market in what you buy and will at some point flip over to the other side of your trade. They trade for their own account and use you to provide the liquidity to make that happen. Can't really call it "investing" anymore, can we?

Agree you always have to keep an open mind on whatever people say, do and write. The 2 people that have read the download , will see there are 4 key points: My own comments on whether I think they are fact or fiction

1) Markets are down a lot. = "Fact". Numbers tally for peak to rough, trough to current and peak to curent

2) Valuations have compressed = "Fact". P/E's have come down to lower levels, and look more rasonable/ more like a buy in my view

3) Credit markets have stabilized = "Debatable opinion". Whether "stabilized" is correct is debatabe, but they have improved. Credit spreads are also narrowing

4) Investor positioning suggests pain trade is up: "Debatable opinion" but some evidence to support

All in all some reasonable facts, data and points in their report. Some of it obviously debatable opinion, when it comes to interpretation of data. As for their disclosures explanations etc at the end. They're a waste of space. We know they may/may not have interests in what they are writing. Mainly a reflection of the US banking world that the disclaimers and disclosures texts are longer than the actual facts and opinions

Then again it's just one source of many...Key is collecting from a wide variety of sources: facts, data, etc and then weighing the opinions with a little healthy scepticism as you imply.

Edited April 3, 2008 by AFKAFSinLOS

[AFKAFSinLOS]

Bear Sterns had leveraged its approximately $80 billion to over $13 trillion. That $13 trillion has not gone away, it is simply added to the already huge number for JP Morgan. I think Morgan is now sitting on something like $90 trillion. This is a disaster waiting to happen. JP Morgan is the largest Fed share holder at over 30%, This can't be swept under the rug for much longer.

Possibly. Another way of looking at it is, that both Bear and JPM were counterparties (with each other)to a significant amount of derivatives. By melding the two companies all that risk is erased. How much that might be, I have no idea.

The reason the $29 billion was loaned to JP instead of directly to Bear in my view was to hide something. The Fed didn't want to save Bear, it wanted to save the economy meltdown that would have occured if Bear had been allowed to go bankrupt. I can't imagine what their actual collateral would have been against that $13 trillion. IMHO, less than 10% could have been immediately liquidated and what a mess that would have made. The Fed had little choice but the Bear Sterns failure has not gone away by any stretch

Well, we don't know do we? Personally I don't think the deal would have happened if it created a net gain in derivative exposure. My guess is that it created a net subtraction. I would not be surprised to see more deals with a similar aim.

For the conspiracy theories and vested interests you might fancy watching CNBC and Bloomberg at the time of righting this. There's a "

"Senate Banking Committee Hearing into the FEDs involvement in Bear Stearns" or words to that effect...

Trouble is, even with the hearing: you have to take account of the motives of the people calling the halling, the motives of the senate and their questions into the motives of the FED/JPM/Bear Stearns/Black Rock and all the other players/individuals/personalities involved.

As Lannarebirth says we'll never really know... Interesting times tho'...

[LaoPo]

It's not just BS; CFC Countrywide is under investigation also.

Judge Authorizes Probe Of Countrywide's Practices

By PEG BRICKLEY April 3, 2008

A federal judge has authorized an in-depth probe of Countrywide Financial Corp.'s mortgage-processing systems by bankruptcy investigators hunting for evidence that the big mortgage lender has systematically abused borrowers.

from: http://online.wsj.com/article/SB1207154382...=googlenews_wsj

LaoPo

[siamamerican]

"The most common cause of low prices is pessimism – some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It's optimism that is the enemy of the rational buyer. None of this means, however, that a business or stock is an intelligent purchase simply because it is unpopular; a contrarian approach is just as foolish as a follow-the-crowd strategy. What's required is thinking rather than polling.

Unfortunately, Bertrand Russell's observation about life in general applies with unusual force in the financial world: "Most men would rather die than think. Many do."

Warren Buffett

LaoPo

Isn't Buffet saying this current environment is an opportunity. Maybe that is the argument you are making, but it contradicts some earlier posts. Markets are extremely pessimistic the last few months. We have had a nice bounce the last few days and I'm almost break even for the year, but I feel the markets could test the previous lows.

He is a proponent of picking value stocks when everyone else is exiting the markets. It's is hard to determine a posters point of view and i may have misread yours.

Funny you should post this Siamamerican. I read this along similar lines as yourself, that Buffet is saying the current environment could be an opportunity. Myself, Lazeeboy and a few others excluded, the majority of people on TV, including Lao Po are pessimistic. Hence to me it seemed to actually contradict Lao Po's comments to an extent.

Goldman's obviously see it as an opportunity

Personally I don't think we will significantly test previous lows, but I think there's a possibility it could go slightly lower than previously in the general ebb/flo ups and downs of the market. However, there is much more upside than downside in my view. Could go a little lower, but mainly looks like trending higher to me.

It's difficult having an intelligent debate on this forum at times. I questioned LaoPo's Buffet quote and instead of addressing it, he goes off on an unrelated tangent. Buffet's quote completely contradicts the majority of his recent posts and I was curious if he had a change in heart.

Edited April 3, 2008 by siamamerican

[LaoPo]

It's difficult having an intelligent debate on this forum at times. I questioned LaoPo's Buffet quote and instead of addressing it, he goes off on an unrelated tangent. Buffet's quote completely contradicts the majority of his recent posts and I was curious if he had a change in heart.

..hmmmm...Intelligent debate...on Thaivisa ?

OK, I'll try Sir.

If you would have read some of my previous posts, I've always said that I post news what I think could be of interest for interested TV members, whether good or bad news.

I have staid cash for quite some time now and that is exactly what I had in mind since, let's say some 7 months or so, when I saw the dark clouds coming and...I'm still cash. Whether that is wise or not is my decision and nobody else's.

That there are posters who qualify me as a doom and gloom poster is up to them, and I don't give a darn.

It's different however if those posters change their attitude and attack me in person as being a 'cut and paste' poster or as someone who doesn't have an opinion.

They're wrong, believe me, they're wrong -VERY WRONG

Now, coming to Buffett words......I have cuddled and cherished ( ) those words since a long, long time and.....I just LOVE the negative sentiment he is talking about (and me as well).

I am just a simple human being, trying to learn from others, and especially from people who know better than me. Warren Buffett is one of them.

That's why I posted his quote and maybe 1 or 2 posters here learned something from his words. I hope so and in that case I am a happy man because I love to see people getting rich(er), not poorer.

Are you satisfied with my explanation ? I hope so, because if you do you can see that there are NO contradictions with Buffett's words with my previous posts; on the contrary.

My posts serve a cause....primarily my own, of course.

It doesn't hurt to be a little snobbish once in a while; this is one of those moments and......

don't feel pissed off.

LaoPo

[torrenova]

I remember when Deutsche got heavily into Mortgage Backed Securities (MBS) as I was a risk analyst at the time and the basic problem was that the quant guys baffled the bosses about the real risk and the covering of risk with credit default swaps was just not completely hedging the risk. had we done that, then we'd have gotten only the structuring fees and some management fees but because we kept some mezzanine debt on the books the profits could be booked and realised now. The liabilities however went out into the future and were not covered sufficiently.

However, just how some of our US counsins and UBS got into this so badly means they will be writing texts on this for years.

[LaoPo]

I remember when Deutsche got heavily into Mortgage Backed Securities (MBS) as I was a risk analyst at the time and the basic problem was that the quant guys baffled the bosses about the real risk and the covering of risk with credit default swaps was just not completely hedging the risk. had we done that, then we'd have gotten only the structuring fees and some management fees but because we kept some mezzanine debt on the books the profits could be booked and realised now. The liabilities however went out into the future and were not covered sufficiently.

However, just how some of our US counsins and UBS got into this so badly means they will be writing texts on this for years.

And on Universities of Economy; however by the time the students have learned the fine touches of these products, the geniuses have discovered and invented new products.

The real financial sharks will always be there.

LaoPo

[sonicdragon]

I remember when Deutsche got heavily into Mortgage Backed Securities (MBS) as I was a risk analyst at the time and the basic problem was that the quant guys baffled the bosses about the real risk and the covering of risk with credit default swaps was just not completely hedging the risk. had we done that, then we'd have gotten only the structuring fees and some management fees but because we kept some mezzanine debt on the books the profits could be booked and realised now. The liabilities however went out into the future and were not covered sufficiently.

However, just how some of our US counsins and UBS got into this so badly means they will be writing texts on this for years.

I fully concur. The compensation structure in the finance industry leads to big money being paid to those working on trading desks who come up with the new products. Risk management on the other hand had a very small budget. Consequently the rocket scientists put the deals together and the janitors had to try to figure out the risk. If risk had any really bright people they were so stretched that they would never have the time to get their heads around all the new products that the scores of geniuses on the desks we coming up with, and so long as the fees were coming in and the bonuses being paid, senior management had no incentive to do anything about it.

Having originally worked at the sharp end, and now in risk management, I can see this very clearly. However there is a depressing sense of "closing the barn door after the horse has bolted" around me these days !

[siamamerican]

It's difficult having an intelligent debate on this forum at times. I questioned LaoPo's Buffet quote and instead of addressing it, he goes off on an unrelated tangent. Buffet's quote completely contradicts the majority of his recent posts and I was curious if he had a change in heart.

..hmmmm...Intelligent debate...on Thaivisa ?

OK, I'll try Sir.

If you would have read some of my previous posts, I've always said that I post news what I think could be of interest for interested TV members, whether good or bad news.

I have staid cash for quite some time now and that is exactly what I had in mind since, let's say some 7 months or so, when I saw the dark clouds coming and...I'm still cash. Whether that is wise or not is my decision and nobody else's.

That there are posters who qualify me as a doom and gloom poster is up to them, and I don't give a darn.

It's different however if those posters change their attitude and attack me in person as being a 'cut and paste' poster or as someone who doesn't have an opinion.

They're wrong, believe me, they're wrong -VERY WRONG

Now, coming to Buffett words......I have cuddled and cherished ( ) those words since a long, long time and.....I just LOVE the negative sentiment he is talking about (and me as well).

I am just a simple human being, trying to learn from others, and especially from people who know better than me. Warren Buffett is one of them.

That's why I posted his quote and maybe 1 or 2 posters here learned something from his words. I hope so and in that case I am a happy man because I love to see people getting rich(er), not poorer.

Are you satisfied with my explanation ? I hope so, because if you do you can see that there are NO contradictions with Buffett's words with my previous posts; on the contrary.

My posts serve a cause....primarily my own, of course.

It doesn't hurt to be a little snobbish once in a while; this is one of those moments and......

don't feel pissed off.

LaoPo

Far from pissed off - just wondered why you posted a Buffet quote that flies in the face of what you have been posting of late. Thanks for the explanation.

Never took you as snobbish. A little stubborn and extremely negative in regards to the global economy, is the impression I got from your posts.

I think I've already apologized for my earlier confrontational replies and some of the jabs in your post were directed towards me. I probably deserved them. LOL

Edited April 4, 2008 by siamamerican

[AFKAFSinLOS]

Bear Sterns had leveraged its approximately $80 billion to over $13 trillion. That $13 trillion has not gone away, it is simply added to the already huge number for JP Morgan. I think Morgan is now sitting on something like $90 trillion. This is a disaster waiting to happen. JP Morgan is the largest Fed share holder at over 30%, This can't be swept under the rug for much longer.

Possibly. Another way of looking at it is, that both Bear and JPM were counterparties (with each other)to a significant amount of derivatives. By melding the two companies all that risk is erased. How much that might be, I have no idea.

The reason the $29 billion was loaned to JP instead of directly to Bear in my view was to hide something. The Fed didn't want to save Bear, it wanted to save the economy meltdown that would have occured if Bear had been allowed to go bankrupt. I can't imagine what their actual collateral would have been against that $13 trillion. IMHO, less than 10% could have been immediately liquidated and what a mess that would have made. The Fed had little choice but the Bear Sterns failure has not gone away by any stretch

Well, we don't know do we? Personally I don't think the deal would have happened if it created a net gain in derivative exposure. My guess is that it created a net subtraction. I would not be surprised to see more deals with a similar aim.

For the conspiracy theories and vested interests you might fancy watching CNBC and Bloomberg at the time of righting this. There's a "

"Senate Banking Committee Hearing into the FEDs involvement in Bear Stearns" or words to that effect...

Trouble is, even with the hearing: you have to take account of the motives of the people calling the halling, the motives of the senate and their questions into the motives of the FED/JPM/Bear Stearns/Black Rock and all the other players/individuals/personalities involved.

As Lannarebirth says we'll never really know... Interesting times tho'...

It's not just BS; CFC Countrywide is under investigation also.

....

I enjoyed watching some of the Senate Hearing on the Fed's involvement in Bear Stearns. I'm not a big fan of some of the legal and regulatory practices in the US, but I have to admit it did give some confidence last night.

Watching a variety of senators take turns for 7 minutes each and ask some very direct questions of Bernanke, SEC President, et al, did inspire some confidence. Seeing Bernanke and co. look uncomfortable at times as they explained their actions was great. They were given quite a tough time. Whatever you think of the US and its systems there are some checks and balances in place compared to many countries in the world, and there is some accountability.

Think they forgot though, that the show was a bit late for those people in Thailand.

Hopefully there'll be some positives out of all this. Sure sometimes the barn door gets shut a little late. But the pace of market development and info spread just keeps increasing. Some comfort that (re)actions are being taken. Better an inquiry and upgrade after the event than nothing. I think some lessons will have been learnt.

The other positives of course, are great buying opportunities now in the equities market...

Edited April 4, 2008 by AFKAFSinLOS

[lannarebirth]

Here's one negative I can think of. Everybody's already in, and in America at least, a lot of private pension money flow ends in a week. Pretty nice of Wall Street to let the general public buy the lows.

Edited April 4, 2008 by lannarebirth

[AFKAFSinLOS]

Here's one negative I can think of. Everybody's already in, and in America at least, a lot of private pension money flow ends in a week. Pretty nice of Wall Street to let the general public buy the lows.

Fair comment to an extent. I'd agree that more people are now coming back to the market, but think there's some way to go before "everybody" being already in.

As someone above mentioned to me as a "newbie" here on Thai Visa: length of time posting here on Thai Visa is really what matters. There's a lot of posters on Thai Visa who are still pessimistic, realistic etc and are holding gold and cash. So we're not quite there yet on that score...

[pliny]

Sentiment is one thing but I think that the significance of the current conditions has escaped many " optimists ".

We are in unchartered waters. Governments and Central banks are just learning that the traditional tool of interest rate intervention has now no linkage with liquidity but in discovering this they have risked inflation at the expense of all else.

Socialising the debt fallout is their next staggering step into the last chance saloon but frankly recession is inevitable and not necessarily such a bad thing. Let the house of cards fall and we can then get on with the next pyramid selling scam.

China's implosion would certainly be an interesting development.

[LaoPo]

Sentiment is one thing but I think that the significance of the current conditions has escaped many " optimists ".

We are in unchartered waters. Governments and Central banks are just learning that the traditional tool of interest rate intervention has now no linkage with liquidity but in discovering this they have risked inflation at the expense of all else.

Socialising the debt fallout is their next staggering step into the last chance saloon but frankly recession is inevitable and not necessarily such a bad thing. Let the house of cards fall and we can then get on with the next pyramid selling scam.

China's implosion would certainly be an interesting development.

I agree with most of what you wrote.

If China implodes....we will see something we haven't seen before. The west will face enormous problems. Enormous.

Problems will surface we haven't even thought about.

China better NOT implode.

LaoPo

[lannarebirth]

Here's one negative I can think of. Everybody's already in, and in America at least, a lot of private pension money flow ends in a week. Pretty nice of Wall Street to let the general public buy the lows.

Fair comment to an extent. I'd agree that more people are now coming back to the market, but think there's some way to go before "everybody" being already in.

As someone above mentioned to me as a "newbie" here on Thai Visa: length of time posting here on Thai Visa is really what matters. There's a lot of posters on Thai Visa who are still pessimistic, realistic etc and are holding gold and cash. So we're not quite there yet on that score...

Anyhow, I'm not pessimistic or optimistic. I just trade it. Today, not well, but it's been a very very good year till now. Looks like up till it's not. Good Luck.

[VegasVic]

Ignore Bernanke, he's a Bushtool.

Pay attention to what Warren Buffett says, he deals in realities.

I'm all ears

LaoPo

Bernanke sez there's a possibility of a recession...

Buffett sez the US is already in a recession...

Maybe Buffett sees things that way because he's actually in the market.

Maybe Buffett sees things the way he wants them to be because he has loads of cash available to him and is an opportunist with a stake in the game and if things get worse he buys lower. On the other hand Bernanke has no stake in the game is privy to more information than Buffett and is far more likely to have a realistic view and not a tainted view. Time and time again you seem to post this nonsense, it is clear that you hate Bush, but it is your choice to be a tool for the far left (Soros-Buffett) wing of the democratic party.

[VegasVic]

..

Facts please, AFKAFSinLOS, not words.

* UBS, the company you were praising a few messages back; yeah right.

LaoPo

The key with facts is interpreting them, not quoting them. There are plenty of facts in my posts above, which are then combined to form an opinion. Quoting all the facts used to arrive at this opinion is simply too time consuming and not worth it.

If you're looking for facts that something "will" happen, then you're chasing a holy grail.

As for "praising UBS" that's a misinterpretation of a fact and opinion. Nowhere have I praised them above. I'd "owned up" but I'd hardly call that praise.

Markets largely up yesterday, and starting postively in Asia today...Third day in a row...

I disagree, I think that lao goes a step beyond just quoting statements in the press, he often completely misrepresents them Case in point a few posts back when he stated that the U.S. taxpayers gave JPM $30 billion in the Bear Sterns bailout, now someone reading reading this post on TV would conclude that the U.S. taxpayers just gave $30 billion away to one of the largest money center banks while getting nothing in return. Most of us who have followed the situation with Bear Sterns know that this is not accurate, and the sad fact is that lao po also knows this but is so use to giving his slant to the facts and taking things out of context that this passes as SOP for him. I think that Lao and a few others here who are daily serial posters on TV do present and prepetuate a pessimistic view, hence the reason for the new posters take on thai visa I am amazed that lao or one of the others have not reposted the headlines from the Brit rag last week that said "U.S. in the throws of a depression", now those of us who are familiar with how sensationalistic and loose and fast way the press in GB play with the facts can discount this easily enough, but when crap like this gets reposted on TV as the gospel truth then one can see why impartial onlookers see TV as overly pessimistic. I have seen people quoted here as experts on the U.S. economy whom I personally know to have been bearish(and wrong 90% of the time) for the past 25 years, and yet they are presented as gurus who have great insight as to where the U.S. economy is headed.

[VegasVic]

Here's one negative I can think of. Everybody's already in, and in America at least, a lot of private pension money flow ends in a week. Pretty nice of Wall Street to let the general public buy the lows.

Fair comment to an extent. I'd agree that more people are now coming back to the market, but think there's some way to go before "everybody" being already in.

As someone above mentioned to me as a "newbie" here on Thai Visa: length of time posting here on Thai Visa is really what matters. There's a lot of posters on Thai Visa who are still pessimistic, realistic etc and are holding gold and cash. So we're not quite there yet on that score...

Anyhow, I'm not pessimistic or optimistic. I just trade it. Today, not well, but it's been a very very good year till now. Looks like up till it's not. Good Luck.

Don't forget that there are currently record levels of $ on the sidelines in money markets and cash equivilents, just waiting to be put to work The DOW has put in its double bottom and poor Bingo will never see his 11,300 level! The risk-reward ratio has turned the corner and now favors reward, and foriegners investing in U.S. equities will get a duoble payoff should they invest now as the dollar will coming out of its W-shaped bottom very soon!

[LaoPo]

I disagree, I think that lao goes a step beyond just quoting statements in the press, he often completely misrepresents them Case in point a few posts back when he stated that the U.S. taxpayers gave JPM $30 billion in the Bear Sterns bailout, now someone reading reading this post on TV would conclude that the U.S. taxpayers just gave $30 billion away to one of the largest money center banks while getting nothing in return. Most of us who have followed the situation with Bear Sterns know that this is not accurate, and the sad fact is that lao po also knows this but is so use to giving his slant to the facts and taking things out of context that this passes as SOP for him. I think that Lao and a few others here who are daily serial posters on TV do present and prepetuate a pessimistic view, hence the reason for the new posters take on thai visa I am amazed that lao or one of the others have not reposted the headlines from the Brit rag last week that said "U.S. in the throws of a depression", now those of us who are familiar with how sensationalistic and loose and fast way the press in GB play with the facts can discount this easily enough, but when crap like this gets reposted on TV as the gospel truth then one can see why impartial onlookers see TV as overly pessimistic. I have seen people quoted here as experts on the U.S. economy whom I personally know to have been bearish(and wrong 90% of the time) for the past 25 years, and yet they are presented as gurus who have great insight as to where the U.S. economy is headed.

I'm most interested what, if and when the American taxpayers are receiving in return for the $ 30 Billion of their money, used to save Bear Stearns, Vic.

Most interested, as I didn't hear or read anything in the press, so far; but you could be right as I have not seen the full hearings by the Senate last week of Bernanke cs.

And, I said it before: "don't shoot the messenger" and I would welcome news from you (just post a link, ok?) which says the opposite of what I read in the US and other world financial press agencies. I have no idea what GB press or "Brit rag" you're referring to.

I certainly hope there will be no recession in the US, whether small or big. Nobody gains from a recession and if you have positive news which claims the opposite of the negative news from your own country, please let us know.

LaoPo

[AFKAFSinLOS]

Thought the following article was a good read:

Simons, Mandel Post Biggest Slump as Hedge Funds Hit by Markets By Katherine Burton

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

It seemed to lack a bit of focus, but after a general few paras on some hedging funds losing out so far - which is not big news in itself really, there are some interesting background comparisons/context. eg

Soros:

World financial markets haven't been in such bad shape since the 1930s, billionaire hedge-fund investor George Soros said in an interview last week in which he predicted more losses.

My comment: Think he has got it wrong this time. Perhaps trying to explain away that he might be having problems with his positions...

I think VegasVic's comments above look more accurate. I'm not sure if it will be W-shaped or have a few more troughs, but I believe for the stock markets the worst is over, and gains potential is higher than loss potential.

Hedge funds Compared With 1998:

... The industry has faced tough markets before....There was a four-month period when funds fell 11.4 percent on average in 1998 after Russia defaulted on its debt and devalued its currency. That led to the Federal Reserve- orchestrated bailout of John Meriwether's Long-Term Capital Management LP, which lost about $4 billion in a matter of weeks. Funds rebounded and ended up an average of 2.6 percent for the year.

My Comment: I remember LTCM quite well, doesn't seem like 10 years ago. Shows again that it wouldn't be the first time the Fed has had to get involved one way or another, and won't be the last. Not very successful in that case though, but it did become a text book case. Probably like Bear Stearns will. Bear Stearns if I recall declined to assist in the bail out, unlike many other banks. I believe it's position was LTCM was too risky. Quite some irony there

Dry Powder

Equity-fund managers, who account for about one-third of industry assets, held an estimated $90 billion of cash in January, a hoard that dropped to $64.8 billion the next month, according to data compiled by Merrill Lynch & Co. analyst Mary Ann Bartels. The last time equity funds held cash outside of their trading accounts was in 2004, New York-based Merrill reported. At that time, market direction was also unclear, with the S&P 500 up less than 2 percent through October.

``Your average manager is not invested and is sitting on lots of dry powder,'' said Brett Barth, a partner at New York- based BBR Partners, which invests money in hedge funds for clients.

My comment: Those stats would seem to support that cash has been sat on sidelines as Lanna mentioned. However, it's also been coming back as I mentioned. 90bio in Jan, 64bio in Feb... I would expect Mar is lower, but still some dry powder. When that comes in, (and it will definitely do at some point), it will be part of more funds coming in and pushing the market upwards.

Edited April 8, 2008 by AFKAFSinLOS

[LaoPo]

If you think Soros is wrong, what about Morgan Stanley/Oliver Wyman's statements in a report, called:

"Banks Face Biggest Crisis in 30 Years, Report Shows"

"http://www.bloomberg.com/apps/news?pid=20601087&sid=ag6x7hY0GLFo&refer=worldwide

Are they wrong; there is no financial crisis ?

That would be the best news I've heard in months and I hope that your quote: "...I believe for the stock markets the worst is over, and gains potential is higher than loss potential." will be proved correct.

Laopo

[stumonster]

well , I am still a doom and gloom merchant - I think the world markets are just getting started on their downward journey

these little upswings are only because of money injections into the system by governments trying to avert reality and investors holding out hope that all the profits they have been achieving for the last 20 years are not about to dissolve.

rising prices for base materials will not sustain anything if the end demand is not there.

things will continue to unravel

The United States has lost 232,000 jobs this year.

Over ten million households already owe more on their homes than they are worth. This number is growing and will continue to grow as house prices fall further.

http://www.atimes.com/atimes/Global_Economy/JD09Dj03.html

[AFKAFSinLOS]

If you think Soros is wrong, what about Morgan Stanley/Oliver Wyman's statements in a report, called:

"Banks Face Biggest Crisis in 30 Years, Report Shows"

"http://www.bloomberg.com/apps/news?pid=20601087&sid=ag6x7hY0GLFo&refer=worldwide

Are they wrong; there is no financial crisis ?

That would be the best news I've heard in months and I hope that your quote: "...I believe for the stock markets the worst is over, and gains potential is higher than loss potential." will be proved correct.

Laopo

The emphasis of their report is on banks and the banking industry, with a particular focus on US banks and European banks. This sector will continue having a tough ride economically.

As for the stock markets, they are much wider in scope in terms of industries and geographical locations. Thailand, Korea, Singapore for example look good value to me. Latin America and Africa have some interesting opportunities.

[AFKAFSinLOS]

Seems Bank of Thailand doesn't feel the need yet for rate cuts in the same way the FED does. Domestic demand is still continuing to grow in the first couple of months of 2008, though they think the global economy could slow growth here later in the year.

This seems in line with the view that although the US will have it's problems, there is some decoupling of the economies. But, there will still be some spillover/slowdown from the US impact.

I find this interesting, as in my view Thailand is one of the economies in Asia that is more dependent on US/exports, and "less decoupled" than other countries in Asia. So if Thailand are only expecting a slowdown and not a recession/meltdown, and Thailand don't feel the need to cut rates, this augurs well for countries that are "more decoupled", and more able to rely on their own domestic demand or alternative export markets other than US.

Little disappointed in some ways they didn't cut rates, as I think it would have been a nice boost to the SET, which has been pretty flat over the last few sessions.

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Monetary Policy Committee's Decision on 9 April 2008

Ms. Duangmanee Vongpradhip, Assistant Governor of the Monetary Policy Group, Bank of Thailand, announces that the Monetary Policy Committee (MPC) met today to assess the latest economic developments and trends in order to determine the appropriate monetary policy stance. The main issues discussed were as follows.

In the first two months of this year, domestic demand continued to expand, from both private consumption and private investment. At the same time, the government's budget disbursement met its target. Exports continued to expand well, but the slowdown in the global economy could affect export growth going forward.

Risks to inflation increased from the previous meeting. Headline inflation accelerated in the first quarter due to the prices of oil and commodities in world markets, as well as greater pass-through of costs to domestic prices. However, the MPC assessed that these pressures were likely to moderate in the latter part of the year in tandem with the slowdown of the global economy.

The MPC deemed that the overall growth momentum of the Thai economy continued to be sustained from domestic demand, which was supported by accommodative monetary policy in previous periods and additional fiscal stimulus. Nevertheless, risks to inflation and growth going forward increased, making it necessary for the MPC to monitor both issues closely.

The MPC decided to keep the policy interest rate at 3.25 per cent per annum.

Edited April 9, 2008 by AFKAFSinLOS