Wall Street Disaster

[lannarebirth]

Don't disagree at all, LRB.

I'm contra-dollar and short (to a degree) myself now.

Once the monetizing of this problem works its way through the system.....

Buy yuan?

Yuan? I don't know. I'm not really a currency guy. the THB is as much exposure as I want or need. Curious about the contra $ stance however. It's going up, and this is even one of the rare occasions you can cite a reason, ie: carry trade unwind. How long that continues? Who knows.

[dingdongrb]

Don't disagree at all, LRB.

I'm contra-dollar and short (to a degree) myself now.

Once the monetizing of this problem works its way through the system.....

Buy yuan?

I bought plenty of rmb while I was living in China knowing that it would soon become stronger. Had I'd known of this current fallout of the US market I would have bought more. But you know what they say about hindsight.........blah blah blah

[unomi]

It seems to me that the yuan can only ever go up. It is still being held artificially low, even if it weren't they still seem to be in a much stronger position than the pound or usD. They hold quite a bit of US debt which could be due to politics or maintaining an export market, regardless, once they want to go buying they have all the intruments with which to get bang for their rinmibi.

BTW: How would you recommend I get into online trading? looking for something cheap and cheerful to get started.

[Gumballl]

... there's a growing awareness of what a scam stocks really are.

Do you mean that my odds at winning at a craps table in Vegas are just as good??

Edited October 10, 2008 by Gumballl

[lannarebirth]

... there's a growing awareness of what a scam stocks really are.

Do you mean that my odds at winning at a craps table in Vegas are just as good??

A buxom representative from the "house" and free drinks. No comparison really.

[unomi]

From some point of view stocks *are* scams.

The comment above regarding some stocks being undervalued etc. That all has to do with your expectations of the future. Most companies operate in debt, its a widely embraced business tactic that allows you to aggressively invest in procuring perceived market edge; at the same time ofcourse letting you get away with paying less taxes.

Business that are not agressively procuring market share or investing in new markets are rarely favoured by analysts, even though these investments are known to take 'quite a while' to recoup, debt was cheap, considering tax writeoffs and inflation for some it might even be considered an investment in and of itself.

Debt is no longer as cheap, and probably won't be in the medium term, after the short term panic rate cut.

compare http://www.federalreserve.gov/pubs/feds/20...9/200429pap.pdf to

http://www.istockanalyst.com/article/viewa...id_2614442.html

The overnight loan rate tripled. And then ofcourse the fed 'printed' more money and all were happy again.

The problem is that the overnight loans are not really meant to be something that is under pressure in this way. They are only meant to be used when an emergency loan has to be made outside of 'office hours' which sounds a bit weird to me, but there you go.

Lenders didnt want to risk their money in another institutions pocket that might go under by the next day. which basically meant they didn't trust anyone.

Now if people are paying triple the money that they used to, something is wrong.

Imagine enough financial institutions needing so much cash so bad that they can push the rate up in that degree. Just for one night ofcourse

Now consider how this will impact the companies that have more or less been 'forced' by the market to be agressive in their procurements to give some credibility to their growth projections so that they might see their stock values rise and who knows, become yet another 'paper millionaire'

Enjoy.

[fiddlehead]

People, (and most likely companies too) are going to have to start living more like my parents did: When you want something, you save up for it.

Too much credit around the world because it's too easy to get. PEople are too stupid to realize they have to pay it back.

I know people that have so much debt, there's now way they can pay it back. HOw do they get more? Easy. (until recently)

I know 25 year olds with new cars, the latest gadgets, nice clothes, and never really had a job. This kind of stuff has to change.

We are all in for some tough times but especially those that have had the easy ride.

Picking a bottom? Good question. Maybe 6k on the dow? But I agree, it may take 30 years to see last years levels and the Nasdaq, longer to see those 1998 levels.

[flying]

People, (and most likely companies too) are going to have to start living more like my parents did: When you want something, you save up for it.

Too much credit around the world because it's too easy to get. PEople are too stupid to realize they have to pay it back.

I know people that have so much debt, there's now way they can pay it back. HOw do they get more? Easy. (until recently)

I know 25 year olds with new cars, the latest gadgets, nice clothes, and never really had a job. This kind of stuff has to change.

Picking a bottom? Good question. Maybe 6k on the dow? But I agree, it may take 30 years to see last years levels and the Nasdaq, longer to see those 1998 levels.

I agree for the most part.

But I also know/knew folks in debt beyond their years.

They always joked that they had in essence won.

Except now we all lose a bit because of it.

Yet when you say

We are all in for some tough times but especially those that have had the easy ride.

I wish it were true. But those guys are the ones who walk with no conscious about their actions.

[flying]

One thing to watch out for though, is that there's a growing awareness of what a scam stocks really are.

Back in early 2002 I think? When I stopped trading one of the reasons was I saw how big business worked. While doing project management for a large firm I was also on their executive board & saw how the books were made to look like what ever they needed them to look like. Made me realize something that day. If I was going to invest in something it may as well be myself.

[VegasVic]

Some of the reason for the recent sharp delines in the US market is because the ban on shorting was lifted in Wednesday.

So, some of the people shorting think that will be further declines in the market.

There will be a bottom somewhere, and those that buy at or near the bottom and go long can get positive gains, IMO.

Where this bottom is, I have not idea.

When it will happen, I have no idea.

There are many serious problems, as we know.

The bottom was made today, it was around 7880. Today was capitulation day, Monday Mr. Paulson starts to invest the taxpayers money in conjunction with some very interesting ideas out of the G-7 ! As usual the baby was thrown out with the bathwater so there are some once in a lifetime values in the market currently, but do your D.D. Remember, Bernard Baruch, Benjamin Graham and Warren Buffett became the most sucessful investors of all time because they had the guts to buy when there was blood in the streets. Good luck to all

[flying]

The bottom was made today, it was around 7880. Today was capitulation day, Monday Mr. Paulson starts to invest the taxpayers money in conjunction with some very interesting ideas out of the G-7 ! As usual the baby was thrown out with the bathwater so there are some once in a lifetime values in the market currently, but do your D.D. Remember, Bernard Baruch, Benjamin Graham and Warren Buffett became the most sucessful investors of all time because they had the guts to buy when there was blood in the streets. Good luck to all

I hope your right. I would like to see a turn to this. It may have not lasted long but it was enough to wear a few out

[zorro1]

CNN news 10 mins ago suggesting it will bottom out next 48 hours http://money.cnn.com/2008/10/10/markets/st...f=googletoolbar

Whatever the bottom, how many YEARS will it take to even get to the SAME LEVEL as the highs, already down about 40 percent from the highs, the true bottom maybe even more. Apparently after the great depression it took 29 years just to get back to even. Easy come, easy go INDEED. I don't know about growing rice as PB has suggested, but some rice WHISKEY right about now. not a bad idea. To the people who say soon it is a good time to buy, sure, but it will take years before the masses are comfortable with the stock market again after this historic BURN OUT.

During the great depression did they throw the equivalent of 7 bill at the banks was there a G7 rescue package?. If not then we are in different times and not really comparable.. The 29 years to recover really affected those who rode it out. The ones the bought near the bottom would have had 29 yrs of growth. But where is the bottom now? wish I knew , i wanna get rich

[flying]

During the great depression did they throw the equivalent of 7 bill at the banks was there a G7 rescue package?. If not then we are in different times and not really comparable.. The 29 years to recover really affected those who rode it out. The ones the bought near the bottom would have had 29 yrs of growth. But where is the bottom now? wish I knew , i wanna get rich

I feel the same way & would love to profit by a ride up as stocks return to normal prices.

Maybe thinking this way is wrong?

What we *thought* was normal was a bubble yes? So will prices be going back anywhere near their old prices for a long time to come? Are stocks really beaten down now or in reality are they closer to their true value?

[unomi]

Since people are trying to compare this to the 1929 crash:

http://www.istockanalyst.com/article/viewa...id_2696735.html

To say that just because stocks have dropped they *must* go up is, I think, rather optimistic.

Consider the very abrupt tripling of interbank lending rates, no one wanted to lend because no one wanted to be caught out unable to cover their own debts.

Lowering interest rates only works if you have money to lend.

If you put in more money in the market where does this money come from?

The Fed seems to have 2 choices: 1. issue bonds. 2. print money.

Now most money in the world is already invested in something, even if it is just collecting interest in a bank account.

removing 700B from the books of financial institutions to give to the Fed for redistribution won't help the credit crunch.

http://www.istockanalyst.com/article/viewa...id_2696822.html

printing money is in rather poor taste and leads almost inevitably to inflation (I personally would say 'by definition' rather than 'almost' , but thats just cause I am old school)

Inflation ofcourse hurts everyone that IS NOT in debt.

If you are in debt and you have a revenue stream that you control well enough to increase to compensate for inflation then inflation overall works in your favour.

In my view inflation has been a tool to keep people engaged in the treadmill, it inexorably decreases the value of 'static' savings, forcing people to put their money in the 'markets' and become good little capitalists.

[lordofdelusion]

Well, thats the thing about being poor. When you've got bugger all to start with you have bugger all to lose. I will shortly be opening a consultancy business on how to live pretty well on very little and will offer a generous discount to impoverished T.V members

You know, you may be on to something! While living in the US during the last real estate run up, the airwaves were saturated with ads for "get rich in real estate" seminars. "No money down" "how to be a millionaire", etc; At every hotel, every weekend for some incredible price, you too could learn to make a fortune in real estate. Obviously the only millionaires were the guys selling the "systems" (Why? Because they wanted to share with you.)

Now the American people are looking for a way to survive with a simple, more sustainable lifestyle. Your course may be in high demand. Get together a DVD set and market it on the internet ASAP!! $19.95 plus shipping and handling. ORDER NOW!!!!!

[unforgiven]

Wonder why political posts and the aides/advisers don't have to have minimum qualifications, like the CEO of a Multi-national. Appropriate degrees, professional qualifications, proven ability and experience et al.

I suppose I can answer my own musings, 'cos it's political.

Also why don't white collar crooks go to real jails instead of closed tennis clubs.?

[/quotethi

This is all going to come down on billl clinton as he was the one responsible for these regulations that lead to this rape....................................republicans in /08 will dodge the the Iraque noose

[Naam]

buy U.S. shares, work for ten years in PeaceBlondie's rice field, look at your portfolio again and rejoice (select what is applicable HALLELUJA AMEN / AL-HAMDULLILLAH / SHIVA SHUKR... ) that you haven't lost too much money.

go back, work another ten years for PeaceBlondie (perhaps FOR A CHANGE cutting trees or tending and shearing his Alpaca herds for wool), then look at your portfolio...

[flying]

This is all going to come down on billl clinton as he was the one responsible for these regulations that lead to this rape....................................republicans in /08 will dodge the the Iraque noose

So basically your saying it is rape & it was Clinton who started it?

So your also saying Mr Bush just continued with sloppy seconds for 8 years right?

[Naam]

This is all going to come down on billl clinton as he was the one responsible for these regulations that lead to this rape....................................republicans in /08 will dodge the the Iraque noose

So basically your saying it is rape & it was Clinton who started it?

So your also saying Mr Bush just continued with sloppy seconds for 8 years right?

nah, i have a feeling Monica enjoyed it

[flying]

nah, i have a feeling Monica enjoyed it

When she was asked if her new boy friend was anything like Bill she replied......

Close but no cigar

[Lancelot]

one word . BUY

Zorro1 and Brit Maverick get it. (Buy reference)

Don't believe in buying? Research some historical stock charts from 1929, 1974, 1987, 2002.

The wise investor keeps 3 to 5 years of living expenses in cash; the rest he invests in downturns and harvests in market peaks.

Not saying I've got it all figured out. But when others are greedy; I am a bit fearful and sell; when otheres are fearful I buy a little.

Works for me

[Bangyai]

Well, thats the thing about being poor. When you've got bugger all to start with you have bugger all to lose. I will shortly be opening a consultancy business on how to live pretty well on very little and will offer a generous discount to impoverished T.V members

You know, you may be on to something! While living in the US during the last real estate run up, the airwaves were saturated with ads for "get rich in real estate" seminars. "No money down" "how to be a millionaire", etc; At every hotel, every weekend for some incredible price, you too could learn to make a fortune in real estate. Obviously the only millionaires were the guys selling the "systems" (Why? Because they wanted to share with you.)

Now the American people are looking for a way to survive with a simple, more sustainable lifestyle. Your course may be in high demand. Get together a DVD set and market it on the internet ASAP!! $19.95 plus shipping and handling. ORDER NOW!!!!!

Good idea !! I've caught your ball and I'm gonna run with it. As it was your idea originaly I'm going to give you a special 50% discount . As soon as I recieve your

" check is in the post ' reply....I'll post it off

[Wrong Turn]

one word . BUY

Zorro1 and Brit Maverick get it. (Buy reference)

Don't believe in buying? Research some historical stock charts from 1929, 1974, 1987, 2002.

The wise investor keeps 3 to 5 years of living expenses in cash; the rest he invests in downturns and harvests in market peaks.

Not saying I've got it all figured out. But when others are greedy; I am a bit fearful and sell; when otheres are fearful I buy a little.

Works for me

Wise words. People (with time) need to look at the historical averages of the market.

This bear, or downward spiral may last longer than others. Or, maybe not.

But many are waiting for the bottom or near the bottom, to start buying.

[russianrobert]

Lots of people are making comparisons with the '29 depression. This is totaly different. Governments today understand what the crisis is and have a better idea how to handle it.

One other example of the difference between 'now' and 'then' is unemployment benefit. It hadn't been invented in '29. It's absence was a big factor in plunging the country into depression and keeping it there for so long.

[Lancelot]

Lots of people are making comparisons with the '29 depression. This is totaly different. Governments today understand what the crisis is and have a better idea how to handle it.

One other example of the difference between 'now' and 'then' is unemployment benefit. It hadn't been invented in '29. It's absence was a big factor in plunging the country into depression and keeping it there for so long.

I agree. I have no idea how bad or how long the current financial crisis will last, but now many national governments have social institutions pumping HUGE amounts of money into consumers/businesses pockets, namely pensions, health care, unemployment insurance, disability insurance....

That helps to prop up spending and keep companies going, which, inturn, keeps people employed.

[Shotime]

... there's a growing awareness of what a scam stocks really are.

Do you mean that my odds at winning at a craps table in Vegas are just as good??

It's more like a horse race. You have to be lucky that you picked the horse that was fixed to win.

[dingdongrb]

Here are my thoughts: DRINK MORE BEER!!!!

If you had purchased $1,000 of shares in Delta Airlines one year ago,

you would have $49.00 today.

If you had purchased $1,000 of shares in AIG one year ago, you would have $33.00 today.

If you had purchased $1,000 of shares in Lehman Brothers one year ago, you would have $0.00 today.

But, if you had purchased $1,000 worth of beer one year ago, drank all the beer, then turned in the aluminum cans for recycling refund, you would have received $214.00.

Based on the above, the best current investment plan is to drink heavily & recycle. It is called the 401-Keg.

[teatree]

Lots of people are making comparisons with the '29 depression. This is totaly different. Governments today understand what the crisis is and have a better idea how to handle it.

One other example of the difference between 'now' and 'then' is unemployment benefit. It hadn't been invented in '29. It's absence was a big factor in plunging the country into depression and keeping it there for so long.

I agree. I have no idea how bad or how long the current financial crisis will last, but now many national governments have social institutions pumping HUGE amounts of money into consumers/businesses pockets, namely pensions, health care, unemployment insurance, disability insurance....

That helps to prop up spending and keep companies going, which, inturn, keeps people employed.

But this spending will in turn lead to hyper-inflation, making the value of the dollar, pound etc greatly reduced.

[Naam]

Lots of people are making comparisons with the '29 depression. This is totaly different. Governments today understand what the crisis is and have a better idea how to handle it.

One other example of the difference between 'now' and 'then' is unemployment benefit. It hadn't been invented in '29. It's absence was a big factor in plunging the country into depression and keeping it there for so long.

but until now none of their "better ideas" worked.

[Naam]

Lots of people are making comparisons with the '29 depression. This is totaly different. Governments today understand what the crisis is and have a better idea how to handle it.

One other example of the difference between 'now' and 'then' is unemployment benefit. It hadn't been invented in '29. It's absence was a big factor in plunging the country into depression and keeping it there for so long.

but until now none of their "better ideas" worked.