How Has The Crash In The Us Stock Market Impacted You?

[zorro1]

I sold up back home and bought 2 condos here in last 24 mths so still smiling however I must say that so far no one has mentioned "dont buy more stock in the good old USA then you can walk away from" Apperently it must only apply to R/E in Thailand

[cmsally]

Just trying to work out when we have reached rock bottom, so maybe can do some shopping.

[lannarebirth]

What many people seem to fail to realize is, that what has been called the "US Subprime Crisis" is really only the tip of the iceberg. Seemingly, this crisis was triggered in the US, but it could have started anywhere. The true problem is the mass of derivative instruments that reside in all financial institutions, everywhere. Even the "goldbugs" now, that the gains they've enjoyed in their "real money" have been due to huge derivative bets. Alot of these bets have been leveraged and no one on earth knows where every bet us made or the consequences of it blowing up and now they have to unwind it. Markets will go where the unwinding and the manipulators take them.

[Jingthing]

I feel the worry now is the potential for deep, long term recession in the US. 70 percent of the US economy is shopping and that still is a key factor in the overall world economy. US people are really hurting and not much in the mood for crazy shopping anymore, they now have been forced to live within their means, and their means aren't that great considering shockingly low savings rates. They have lost money everywhere, home equity (which many people use to live on at least for luxuries), stocks, and their retirement accounts. People are feeling poorer and they are really poorer. Money will be very tight to lend for anything, including needed business expansions, but business won't be interested much in expanding anyway right now. You see there is a potential domino effect. I hope we aren't talking about the D word.

[yabaaaa]

I dont know how its affected me as I have land in Spain (12000m2) and Madeira (3000m2) + the four condos in Bangkok but I'm in it for the long term and wont be selling any of this lot for at least another 6-7 years and the land even longer.

Ive still got the day job but that's in decorating and it aint looking too clever now. Income from the rentals keeps coming in quite well though so the wifes ok.

Not complaining just yet buit wonder if its going to be another 1930's type scenario?

[yabaaaa]

I sold up back home and bought 2 condos here in last 24 mths so still smiling however I must say that so far no one has mentioned "dont buy more stock in the good old USA then you can walk away from" Apperently it must only apply to R/E in Thailand

Thankfully I sold one of my properties in the Uk just before the crash which Id bought for £40000 6 years previously, renovated and sold for £179000 and kept a second house for myself then bought the four condos in Bangkok and some land in Spain and Madeira. I never bought stock in the USA and I dont walk to well anyway ahahaha

[lannarebirth]

What many people seem to fail to realize is, that what has been called the "US Subprime Crisis" is really only the tip of the iceberg. Seemingly, this crisis was triggered in the US, but it could have started anywhere. The true problem is the mass of derivative instruments that reside in all financial institutions, everywhere. Even the "goldbugs" now, that the gains they've enjoyed in their "real money" have been due to huge derivative bets. Alot of these bets have been leveraged and no one on earth knows where every bet us made or the consequences of it blowing up and now they have to unwind it. Markets will go where the unwinding and the manipulators take them.

And your last statement about unwinding bets is confusing as you are implying that by unwinding their hugely leveraged bets in the metals market, that "they" are manipulating the market. That sounds like crazy talk to me. Are you one of those conspiracy minded "goldbugs" by chance? To me, if they are unwinding they bets, than that sounds like normal market activity to me.

Do you think what's been going on in various markets these past few days is normal market activity? Buckle up, things are likely to get even more normal.

[lannarebirth]

What many people seem to fail to realize is, that what has been called the "US Subprime Crisis" is really only the tip of the iceberg. Seemingly, this crisis was triggered in the US, but it could have started anywhere. The true problem is the mass of derivative instruments that reside in all financial institutions, everywhere. Even the "goldbugs" now, that the gains they've enjoyed in their "real money" have been due to huge derivative bets. Alot of these bets have been leveraged and no one on earth knows where every bet us made or the consequences of it blowing up and now they have to unwind it. Markets will go where the unwinding and the manipulators take them.

And your last statement about unwinding bets is confusing as you are implying that by unwinding their hugely leveraged bets in the metals market, that "they" are manipulating the market. That sounds like crazy talk to me. Are you one of those conspiracy minded "goldbugs" by chance? To me, if they are unwinding they bets, than that sounds like normal market activity to me.

Do you think what's been going on in various markets these past few days is normal market activity? Buckle up, things are likely to get even more normal.

Safety belt on.....CHECK! Mouth guard in and crash helmet securely fastened....CHECK!

Dont think I will need it though, as I am not hugely leveraged with all those derivative thingies.

Going on in the market these past few days, hmmm, I would say it looks like a sell off with a huge increase in volitility, oh wait, there is a massive rally, oh, now another sell off. This is a bear market, yeah? In most bear markets there tends to be some selling, so, normal.....yes, for a bear market I would say that the market is doing what it is meant to do. I mean, its not like the markets are in a free fall, at least not yet.

I don't think you understand. Anyone in the market, whether they know it or not is involved with those "derivative thingies". Let's take this week for example. S&P 500 Max Pain 1250. In a non trending market indexes generally settle quadruple witching ato or near Max Pain. This quarter market too far below, so inorder to make up for the payout on options that don't expire worthless, specialists generally get short and drive the market lower. Pretty standard stuff, accept this week it seems they didn't have the money to pay out, so they ban short selling, pump half a trillion dollars in throu the repo facility and THERE"S STILL A NET OUTFLOW! I know you understand all this stuff, so sorry to dumb it down for you.

[Naam]

"The interest in bullion appears widespread. Gold sales to new clients at Blanchard & Co., the largest U.S. precious-metal retailer, have jumped more than sixfold in the past three days as investors responded to the financial turmoil."

Hard assets, not paper.

only if you have the hard assets within your reach, such as gold or platinum bars under your mattress.

[britmaveric]

^ I agree with Nam, its all paper in the end.

[meom]

(Work front is still booming... )

True.They're booming themselves into a petrochemical glut

The place you're at is not yet up and running and there's already talk about further expansion.

You might want to stick around a couple of years more

[Wrong Turn]

What many people seem to fail to realize is, that what has been called the "US Subprime Crisis" is really only the tip of the iceberg. Seemingly, this crisis was triggered in the US, but it could have started anywhere. The true problem is the mass of derivative instruments that reside in all financial institutions, everywhere.

I've tried to read up on and learn more about what derivatives are and how they work, but the material is usually above my head.

Can you LRB, or anyone give me a brief 110 "derivatives for newbies" definition?

TIA.

[ace]

^ I agree with Nam, its all paper in the end.

uhhh.....what????

How can a physical one ounce coin, that I am holding in my hand, be paper in "the end"??

I don't pretend to fully understand it but it depends on what type of asset you own (I'm only talking about gold here).

Many ETFs are leveraged. Some are physical (a bar of gold is held for you in a bank vault somewhere). Now it gets a bit tricky. First physical backed: If I want to sell my bar of gold, do I go to Zurich, pick it up, take it to the pawnbroker? No I do not. I sell it on-line, over the phone. Who buys it? My case? Little company you might have heard of called A.I.G.. They back my Gold with a promise to buy it at current market price, be it $750, $250, $2000 etc. Now I assume you know what happened to them. So what happens now? Well ask etfsecurities it's all fine, don't worry, we're just going to halt all trading for 30 days. Well, you can guess how the market likes that. I am not the only one suffering and this contagion is not finished yet.

That's enough for now, I hope there's no glaring ommision there. DYODD, etc.

[lannarebirth]

What many people seem to fail to realize is, that what has been called the "US Subprime Crisis" is really only the tip of the iceberg. Seemingly, this crisis was triggered in the US, but it could have started anywhere. The true problem is the mass of derivative instruments that reside in all financial institutions, everywhere.

I've tried to read up on and learn more about what derivatives are and how they work, but the material is usually above my head.

Can you LRB, or anyone give me a brief 110 "derivatives for newbies" definition?

TIA.

In it simplest terms, this is the definition:

What are Derivatives?

Derivatives are financial instruments that have no intrinsic value, but derive their value from something else. They hedge the risk of owning things that are subject to unexpected price fluctuations, e.g. foreign currencies, bushels of wheat, stocks and government bonds. There are two main types: futures, or contracts for future delivery at a specified price, and options that give one party the opportunity to buy from or sell to the other side at a prearranged price.

Nothing wrongwith that per se. Unfortunately derivative usage has strayed quite a lot from it's original intent and many things for which mathematical models would not suffice have become subject to drivative hedges. This perversion of the original intent has created greater risk in the finacial system, Due to poor or no oversight/regulation the risks have been further compounded by the use of leveraging already leveraged instruments, and in many cases keeping all these dealings "off balance sheet" where the risks can not be known. It is feared that unexpected movements from any sector could set off a chain reaction of financial blowups due to forced unwinding of all of this risk exposure. That's my understanding anyway.

My particular fear, which I wouldn't want to bias anyone else with is this. The actions of the US government and global central banks of late seem disproportionate to the known risks. It seems like overkill to me. that is, unless they are aware that an even greater risk has been set loose. Again, this is only my own disturbed thinking and one must weigh these things in their own minds.

[lannarebirth]

^ I agree with Nam, its all paper in the end.

uhhh.....what????

How can a physical one ounce coin, that I am holding in my hand, be paper in "the end"??

I don't pretend to fully understand it but it depends on what type of asset you own (I'm only talking about gold here).

Many ETFs are leveraged. Some are physical (a bar of gold is held for you in a bank vault somewhere). Now it gets a bit tricky. First physical backed: If I want to sell my bar of gold, do I go to Zurich, pick it up, take it to the pawnbroker? No I do not. I sell it on-line, over the phone. Who buys it? My case? Little company you might have heard of called A.I.G.. They back my Gold with a promise to buy it at current market price, be it $750, $250, $2000 etc. Now I assume you know what happened to them. So what happens now? Well ask etfsecurities it's all fine, don't worry, we're just going to halt all trading for 30 days. Well, you can guess how the market likes that. I am not the only one suffering and this contagion is not finished yet.

That's enough for now, I hope there's no glaring ommision there. DYODD, etc.

Correct. That is why when owning metals, it is best to actual have them in your possession, as opposed to a piece of paper that says you own such and such. As far as the Canadian Maples goes, if I want to sell some, I call up any dealer, see what the buy prices are, confirm the order and mail it in to them. There is always a market for physical. Bullion dealers make profit on the spread.

http://www.bordergold.com/index.php?option...9&Itemid=63

http://www.bordergold.com/index.php?option...5&Itemid=52

You're quite right that owning physical metal is not subject to paper, unless you want to sell it, in which case the price will have been set in some derivatives market.

As a medium of exchange I don't like Gold much. i mean how many coins would you give up for that antibiotic to cure your childs inner ear infection. Probably all of'em, huh?

Gold is a nice method for transporting wealth however.

[Naam]

How Has The Crash In The Us Stock Market Impacted You?

WHAT crash?

question: WHO are WHAT are U.S. Stock Markets?

[yabaaaa]

"The interest in bullion appears widespread. Gold sales to new clients at Blanchard & Co., the largest U.S. precious-metal retailer, have jumped more than sixfold in the past three days as investors responded to the financial turmoil."

Hard assets, not paper.

only if you have the hard assets within your reach, such as gold or platinum bars under your mattress.

The wife and I both wear Gold underpants ............... surely that would have helped in your line of work Doc?

[VegasVic]

Your're correct, crash is not the right word. Bear market is more like it. It is much more than a correction though.

No it really is not much more than a correction, a correction is usually defined as market down 20%. The Dow high was around 14,000, if you take 20% off of that you get 11,200, and given the fact that the DOW closed at about 11,400 on friday so despite all the hyperbole about a crash the DOW is actually above the 20% correction level. When a market is down 50% you could define it as a crash, like what has happened to the Shaghai market over the past year going from over 6000 to below 2000, they are down nearly 70% and the term crash could readily be applied to the markets in mainland China. The same could also be true for the Russian markets (they actually closed the markets down for most of the past week it got so bad) and the predition for the Indian markets is about the same. We are in the middle of a worldwide financial crisis, and even though it began in the states, the U.S. markets are holding up much better than many of the other major worldwide markets. Its always tough (if not impossible) to pick the absolute bottom, but anyone investing in a solid portfolio of U.S. equities at this time will be very well rewarded in the long term.

[VegasVic]

What many people seem to fail to realize is, that what has been called the "US Subprime Crisis" is really only the tip of the iceberg. Seemingly, this crisis was triggered in the US, but it could have started anywhere. The true problem is the mass of derivative instruments that reside in all financial institutions, everywhere. Even the "goldbugs" now, that the gains they've enjoyed in their "real money" have been due to huge derivative bets. Alot of these bets have been leveraged and no one on earth knows where every bet us made or the consequences of it blowing up and now they have to unwind it. Markets will go where the unwinding and the manipulators take them.

Bravo! Bravo! It is so refreshing to see someone on Thai Visa who actually has a grasp on what is going on! Both gold and oil have been sitting on the edge of a rocky precipise for a while now and I screamed to short oil (when it was in the upper 130's) and gold (at near $1000) over and over again earlier this year and go long the dolllar, but sadly it fell on deaf ears. The recent pop back this week in oil, gold and the Euro will be a short lived phenomena as Europe slides into a recession and the E.C.B. is forced to lower rates, and as these derivative bets continue to unwind in oil and gold we will see oil around $70-$75/bbl and gold at sub $600 levels in the not to distant future.

[lannarebirth]

What many people seem to fail to realize is, that what has been called the "US Subprime Crisis" is really only the tip of the iceberg. Seemingly, this crisis was triggered in the US, but it could have started anywhere. The true problem is the mass of derivative instruments that reside in all financial institutions, everywhere. Even the "goldbugs" now, that the gains they've enjoyed in their "real money" have been due to huge derivative bets. Alot of these bets have been leveraged and no one on earth knows where every bet us made or the consequences of it blowing up and now they have to unwind it. Markets will go where the unwinding and the manipulators take them.

Bravo! Bravo! It is so refreshing to see someone on Thai Visa who actually has a grasp on what is going on! Both gold and oil have been sitting on the edge of a rocky precipise for a while now and I screamed to short oil (when it was in the upper 130's) and gold (at near $1000) over and over again earlier this year and go long the dolllar, but sadly it fell on deaf ears. The recent pop back this week in oil, gold and the Euro will be a short lived phenomena as Europe slides into a recession and the E.C.B. is forced to lower rates, and as these derivative bets continue to unwind in oil and gold we will see oil around $70-$75/bbl and gold at sub $600 levels in the not to distant future.

My Gold trades are over. I no longer have a current view on Gold. I would say you took the wrong message from my post Vic.

[Naam]

"The interest in bullion appears widespread. Gold sales to new clients at Blanchard & Co., the largest U.S. precious-metal retailer, have jumped more than sixfold in the past three days as investors responded to the financial turmoil."

Hard assets, not paper.

only if you have the hard assets within your reach, such as gold or platinum bars under your mattress.

The wife and I both wear Gold underpants ............... surely that would have helped in your line of work Doc?

that sounds quite uncomfortable

[Naam]

Your're correct, crash is not the right word. Bear market is more like it. It is much more than a correction though.

No it really is not much more than a correction, a correction is usually defined as market down 20%. The Dow high was around 14,000, if you take 20% off of that you get 11,200, and given the fact that the DOW closed at about 11,400 on friday so despite all the hyperbole about a crash the DOW is actually above the 20% correction level. When a market is down 50% you could define it as a crash, like what has happened to the Shaghai market over the past year going from over 6000 to below 2000, they are down nearly 70% and the term crash could readily be applied to the markets in mainland China. The same could also be true for the Russian markets (they actually closed the markets down for most of the past week it got so bad) and the predition for the Indian markets is about the same. We are in the middle of a worldwide financial crisis, and even though it began in the states, the U.S. markets are holding up much better than many of the other major worldwide markets. Its always tough (if not impossible) to pick the absolute bottom, but anyone investing in a solid portfolio of U.S. equities at this time will be very well rewarded in the long term.

in the long term we will be all dead Vic take a wild guess what "€uroland" investors think about "U.S. equities, US-Dollar and long term" and especially the DOW. for those who remained invested it means nearly nine long years zero, zilch, nada, rien appreciation plus a huge currency loss

i admit that most european stock markets did not perform much better, but at least the currency loss was avoided.

[VegasVic]

Your're correct, crash is not the right word. Bear market is more like it. It is much more than a correction though.

No it really is not much more than a correction, a correction is usually defined as market down 20%. The Dow high was around 14,000, if you take 20% off of that you get 11,200, and given the fact that the DOW closed at about 11,400 on friday so despite all the hyperbole about a crash the DOW is actually above the 20% correction level. When a market is down 50% you could define it as a crash, like what has happened to the Shaghai market over the past year going from over 6000 to below 2000, they are down nearly 70% and the term crash could readily be applied to the markets in mainland China. The same could also be true for the Russian markets (they actually closed the markets down for most of the past week it got so bad) and the predition for the Indian markets is about the same. We are in the middle of a worldwide financial crisis, and even though it began in the states, the U.S. markets are holding up much better than many of the other major worldwide markets. Its always tough (if not impossible) to pick the absolute bottom, but anyone investing in a solid portfolio of U.S. equities at this time will be very well rewarded in the long term.

in the long term we will be all dead Vic take a wild guess what "€uroland" investors think about "U.S. equities, US-Dollar and long term" and especially the DOW. for those who remained invested it means nearly nine long years zero, zilch, nada, rien appreciation plus a huge currency loss

i admit that most european stock markets did not perform much better, but at least the currency loss was avoided.

Now Naam, you are sounding a bit lao po'ish in pre selecting a time period that will fit your conclusion I clearly stated that "anyone investing in a solid portfolio of U.S. equities AT THIS TIME will do very well in the long run" I did like your J.M. Keynes quote that "in the long run we will all be dead" , but I think that a 3-5 year time horizon will reward current investment very nicely

[Naam]

Now Naam, you are sounding a bit lao po'ish in pre selecting a time period that will fit your conclusion I clearly stated that "anyone investing in a solid portfolio of U.S. equities AT THIS TIME will do very well in the long run" I did like your J.M. Keynes quote that "in the long run we will all be dead" , but I think that a 3-5 year time horizon will reward current investment very nicely

i stated facts Vic and that you consider the last decade indirectly as irrelevant for an investor sounds quite naïve in my ears. but i am willing to discuss your time horizon and the "nice rewards" november 2013 when you attend the party i will throw on my 70th birthday (assuming i am alive).

[VegasVic]

Now Naam, you are sounding a bit lao po'ish in pre selecting a time period that will fit your conclusion I clearly stated that "anyone investing in a solid portfolio of U.S. equities AT THIS TIME will do very well in the long run" I did like your J.M. Keynes quote that "in the long run we will all be dead" , but I think that a 3-5 year time horizon will reward current investment very nicely

i stated facts Vic and that you consider the last decade indirectly as irrelevant for an investor sounds quite naïve in my ears. but i am willing to discuss your time horizon and the "nice rewards" november 2013 when you attend the party i will throw on my 70th birthday (assuming i am alive).

Naam, I never said that I considered the the last 9 years irreleveant, I clearly stated that anyone purchasing a solid basket of U.S. equities at the current time will do very well in the long run, if you want to select segements of history to support your view then lets say 1990-1999 and compare notes on market and dollar performance. I hope you see how ridiculous this could get. I didn't mean to compare you to the mighty lao po (OK maybe I did), but it does appear that you can be just as irrational!

[flying]

I think that a 3-5 year time horizon will reward current investment very nicely

I would very much like to make that happen

Would fit my time line very well.

[Wrong Turn]

What many people seem to fail to realize is, that what has been called the "US Subprime Crisis" is really only the tip of the iceberg. Seemingly, this crisis was triggered in the US, but it could have started anywhere. The true problem is the mass of derivative instruments that reside in all financial institutions, everywhere.

I've tried to read up on and learn more about what derivatives are and how they work, but the material is usually above my head.

Can you LRB, or anyone give me a brief 110 "derivatives for newbies" definition?

TIA.

In it simplest terms, this is the definition:

What are Derivatives?

Derivatives are financial instruments that have no intrinsic value, but derive their value from something else. They hedge the risk of owning things that are subject to unexpected price fluctuations, e.g. foreign currencies, bushels of wheat, stocks and government bonds. There are two main types: futures, or contracts for future delivery at a specified price, and options that give one party the opportunity to buy from or sell to the other side at a prearranged price.

Nothing wrongwith that per se. Unfortunately derivative usage has strayed quite a lot from it's original intent and many things for which mathematical models would not suffice have become subject to drivative hedges. This perversion of the original intent has created greater risk in the finacial system, Due to poor or no oversight/regulation the risks have been further compounded by the use of leveraging already leveraged instruments, and in many cases keeping all these dealings "off balance sheet" where the risks can not be known. It is feared that unexpected movements from any sector could set off a chain reaction of financial blowups due to forced unwinding of all of this risk exposure. That's my understanding anyway.

My particular fear, which I wouldn't want to bias anyone else with is this. The actions of the US government and global central banks of late seem disproportionate to the known risks. It seems like overkill to me. that is, unless they are aware that an even greater risk has been set loose. Again, this is only my own disturbed thinking and one must weigh these things in their own minds.

So, derivatives are future, basically? Futures.

OK, then these future are just being called by a different name.

Thanks, LRB.

[LaoPo]

Now Naam, you are sounding a bit lao po'ish in pre selecting a time period that will fit your conclusion I clearly stated that "anyone investing in a solid portfolio of U.S. equities AT THIS TIME will do very well in the long run" I did like your J.M. Keynes quote that "in the long run we will all be dead" , but I think that a 3-5 year time horizon will reward current investment very nicely

i stated facts Vic and that you consider the last decade indirectly as irrelevant for an investor sounds quite naïve in my ears. but i am willing to discuss your time horizon and the "nice rewards" november 2013 when you attend the party i will throw on my 70th birthday (assuming i am alive).

Naam, I never said that I considered the the last 9 years irreleveant, I clearly stated that anyone purchasing a solid basket of U.S. equities at the current time will do very well in the long run, if you want to select segements of history to support your view then lets say 1990-1999 and compare notes on market and dollar performance. I hope you see how ridiculous this could get. I didn't mean to compare you to the mighty lao po (OK maybe I did), but it does appear that you can be just as irrational!

I know Viccy has a crush on me.....

1. I would love to hear from Professor Viccy what SOLID US basket of equities he has in mind for the long run....

2. How long is long run ..10, 20 30 years ? and what's the proposed yield per year, Professor Viccy has in mind ? If he would be so kind to tell, I'll take my calculator to see if I can survive...

3. Maybe have a look at some of those SOLID US equities: http://www.thaivisa.com/forum/Us-Banking-C...54#entry2228054

But, I'm sure the Professor comes up with the decline on the Chinese stock markets again, the decline in India to come and Europe, being on the brink of a recession.

Happy to know ALL's WELL in the US... But IF it goes wrong it's ALL the fault of the Clinton Presidency, is it now Professor ?

I have this strange feeling the Professor will NEVER come up, showing his basket of SOLID US equities....unless he means Morgan Stanley and Goldman Sachs of course. Are they in your basket, Professor ?...........

The Professor calls me IRRATIONAL...now, now Professor.....don't shout at me please; better have a look at the debts your country has ($ 11,3 TRILLION) and the activities your FED/Wall Street/Administration is busy with, this weekend, trying to give ABSOLUTE -HUGE- POWER to Mr. Paulson with this $ 700 Billion to buy rotten mortgages, given out by some fine corrupt bankers. Power, lasting not even 4 months because he will leave office in January.

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

And you call me irrational ?

You know Professor, you always talk a lot but you don't say anything but vague language. NEVER FACTS.

LaoPo

[london]

aah..it helps that when one isn't that wealthy that these problems and predictions are of interest but not worrying.

Thankfully, I fall into this category.

[siamamerican]

The US issues last week created a great buying opportunity internationally and in the US. While everybody was selling, I was buying. I was down 15% this year and by Friday was up 15%. I don't understand all the trash talk about the US economy. Maybe because the stocks have performed better than all major developed countries in the last 12 months and some American hater are jealous. It must be frustrating to spend the last year posting trash about the US stock economy and now watch it's stock market perform much better than most countries (Germany, England, Spain, Japan, China, Australia...)

Next week I'll be selling deep in the money calls to protect my gains. The US has some challenges ahead and the next 6 months should be a fun ride. For those of you that hope the US sinks, look at your equity markets performance during this crisis. If we go down, you probably won't be far behind. Also, look in the mirror - Europe has some extremely overvalued real estate. Hmmm, what might be in store for some countries in the next year?