Financial Crisis

[flying]

In Texas a new state law was passed last year that holds borrowers accountable for the information

supplied on mortgage applications Borrowers who are caught lying or inflating income could

face up to 99 years in jail and a $10,000 fine.

How about tit for tat?

Lenders who are caught lying, inflating income or using any form of creative financing to qualify those who would not otherwise qualify for a mortgage will

face up to 99 years in jail and a $10,000 fine along with a stern whack over the head.

Also Lenders may sell mortgage only after holding it for at least 10% length of mortgage.

Lender shall not allow mortgage to be bundled with other supposedly like valued mortgages for sale to a third party.

Edited March 13, 2009 by flying

[12DrinkMore]

Short selling is simply a bet that a given stock will go down. Buying a stock long is a gambling bet that it will go up.

Yes, you are correct. I had already changed my outdated view on this. It is all one big casino. Pity that so many normal people have been well and truly "boned" by this misconception, either by direct investment, through a mismanaged fund or by the destruction of their savings in pension schemes.

due to the market's natural tendency to go up over time (due to inflation, corporate growth, and so on)

I think this myth has now well and truly been exposed. Over the last decade most normal people would have been better just putting their money in a bank account, and this will probably be true for the next decade. The market's natural tendency is now a series of wild swings going up and down due to the leveraged speculation and the "lemming" factor in the trading rooms. ("I cannot be fired if I follow the market")

and because someone who is short a stock can be subjected to unlimited losses if the stock skyrockets (e.g., gets bought out by a competitor for double the stock price, or worse, pulls a Netscape or Global Crossing or Apple or Microsoft and does a moonshot). Shorts really have to know what they're doing with respect to any company they short, or else they will get boned hard.

As far as your repeated use of the word "leverage", this just goes to show how thoroughly ignorant you are. A straight short isn't leveraged; his bet moves at a 1:1 ratio with the stock price. Leverage is when you gain or lose more than what a simple pricing mechanism would give you, usually by borrowing money.

And here I would disagree,

Buying and holding the stock when it is fully paid then yes, it is not leveraged.

Borrowing the stock is totally different. When a short trader borrows the stock he is not putting up the full market price of the stock, but just a small itsy bitsy percentage for the days he will borrow it. So now he is leveraged to the hilt, as he has to return that same number of shares, which if they climb by more than the same itsy bitsy percentage, he will, as you so eloquently expressed it "get boned hard". Which I observed with glee in the case of Porsche and Volkswagen. And the short traders had the gall to complain :D But if they fall, then he will profit by many times his original ante.

That is surely a leveraged gamble? Or maybe I have misunderstood it all?

By the way, shorting provides a much-needed buffer. When share prices start to fall, shorts step in to cover by BUYING BACK THE SHARES. That means that the stock falls less than it otherwise might. In other words, it can prevent or at least slow total collapse, giving a little breathing time so that companies can arrange an emergency buyout, or go to the public with open balance books to show that they really aren't in as bad a shape as people think, or even -- hey, here's a thought -- the executives can demonstrate high confidence by announcing that they're going to buy a huge chunk of shares.

Yes, that is the claim made by the shorters, that they bring to the attention of the market when a company is in difficulty and probably forces and accelerates the fall in the share price down to what is perceived as the market value.

The whole question is not so simple that it can be said that shorting is an essential part of the market. What would happen to a stock price if there was no shorting? There would still be a decline in the price, but would it be slower or faster? I suspect slower. Would that be better or worse? I suspect better.

But to relate it at the level most people in the world can understand.

If you put yourself in debt (ie borrow shares or take out a 125% mortgage) in the hope of making a quick and very large profit, then

a. this is risky for you

and, as has been amply demonstrated

b. risky for the rest of us, who never took the dam_n risks in the first place, but have now lost trillions in bailouts.

So was it profitable for all those hedge fund managers to place leveraged bets with other peoples' money on VW/Porsche, for them yes, but for all the clients a massive NO.

But the main question I asked was "does the world need the over bloated self important and self serving finance industry" or does it really require just basic financial services to enable trade, manufacture, research and education? If all the time, energy, intelligence and money that has been wasted into producing the horrendous financial mess had been spent on manufacturing and developing products, medicine, agriculture, education that produce sustainable profits in the single figure precentage, would we all now be better off?

I think the answer is absolutely crystal clear.

The human race has been well and truly boned by the greed, ruthlessness and selfishness of the &$^%$ in the finance industry.

Edited March 13, 2009 by 12DrinkMore

[AlexLah]

[thaidrew]

And just to really cheer you up is the news in today's daily mail that GB and darling now have plans to bring the offshore tax free status to a halt and incorporate it into the financial system so that tax can be collected on the deposits held there. Now is that not just what you wanted to hear???????

[lannarebirth]

And just to really cheer you up is the news in today's daily mail that GB and darling now have plans to bring the offshore tax free status to a halt and incorporate it into the financial system so that tax can be collected on the deposits held there. Now is that not just what you wanted to hear???????

Yep.

http://www.thaivisa.com/forum/index.php?s=...t&p=2544839

[midas]

When i read this today I thought what happens of the next step in this " procedure "

is to seek permission to leave and the next step after that is that

you would be denied permission ? Why do they need to do this ? To create a profile.....

Thank god I left the UK in the 1980's

All travel plans to be tracked by Government

The travel plans and personal details of every holidaymaker, business traveller and day-tripper who leaves Britain are to be tracked by the Government, the Daily Telegraph can disclose.

Even swimmers attempting to cross the Channel and their support teams will be subject to the rules which will require the provision of travellers' personal information such as passport and credit card details, home and email addresses and exact travel plans.

Yachtsmen, leisure boaters, trawlermen and private pilots will be given until 2014 to comply with the programme.

They will be expected to use the internet to send their details each time they leave the country and would face a fine of up to £5,000 should they fail to do so.

http://www.telegraph.co.uk/news/uknews/498...Government.html

Edited March 14, 2009 by midas

[flying]

They will be expected to use the internet to send their details each time they leave the country and would face a fine of up to £5,000 should they fail to do so.

Whats next? I think we will see more & more of this from others too.

We cannot have folks jumping ship when we need them for the bailing out to work.

Literally how perfect

[Naam]

telegraph.co.uk

tell me what newspaper you read to add to the picture i have of you.

[Nouf]

Jon stewart finally calls out the CNBC shills of their BS calls,

The 1st video was well funny, but the second, and third makes Jim cramer out to be the crook he really is, the daily show has all but likley ended Mad money and finally shown CNBC for the partner in crime station they really are

Their interests lie with Wall street not the small investors and the daily show exposures the truth

This videos are quality, well funny

need to watch the 1st video to understand the second video and third, this thing got out of hand, what started as a joke, but it got to a stage where the other Media outlets, were all over the BS shown in the Montage, this may just end Jim Cramers Mad money show

http://www.thedailyshow.com/video/index.jh...inancial-advice

http://www.thedailyshow.com/video/index.jh...cramer-we-trust

http://www.thedailyshow.com/full-episodes/...pisodeId=220533

[JimsKnight]

And just to really cheer you up is the news in today's daily mail that GB and darling now have plans to bring the offshore tax free status to a halt and incorporate it into the financial system so that tax can be collected on the deposits held there. Now is that not just what you wanted to hear???????

That Scottish gimp is beyond the pale!

He'll be taxing the fresh air we breathe next!

Edited March 14, 2009 by JimsKnight

[churchill]

and this is not what is needed -

I thought Obama was about negotiation and dipomacy .

US warships head for South China Sea after standoff

http://www.timesonline.co.uk/tol/news/worl...icle5898650.ece

[flying]

I thought Obama was about negotiation and dipomacy .

Not hardly.............I think it was not long after he took office that he bombed Pakistan.

Errrr I guess I should say he was bombing Al Qaeda Terrorist in Pakistan. Although the 18 dead didn't think so.

Edited March 14, 2009 by flying

[lannarebirth]

I thought Obama was about negotiation and dipomacy .

Not hardly.............I think it was not long after he took office that he bombed Pakistan.

Errrr I guess I should say he was bombing Al Qaeda Terrorist in Pakistan. Although the 18 dead didn't think so.

Well, this China thing is a no brainer. China "trying it on" IMO. In international waters in the South China Sea, which several countries, not just China have interests and territorial rights. Some of the heviest traffic shipping lanes in the world go through the SCS. As if!

Anyway, I suppose all this is OT.

Edited March 14, 2009 by lannarebirth

[midas]

I thought Obama was about negotiation and dipomacy .

Not hardly.............I think it was not long after he took office that he bombed Pakistan.

Errrr I guess I should say he was bombing Al Qaeda Terrorist in Pakistan. Although the 18 dead didn't think so.

We also though he was

1, About " Transparency "

2. and that he was against earmarks

3. he was against raising taxes

and he has falied on those three counts as well - in fact I am beginning

to think the USA was duped by this guy ?

[midas]

]

Whats next? I think we will see more & more of this from others too.

We cannot have folks jumping ship when we need them for the bailing out to work.

Literally how perfect

Flying - have they initated this in USA yet ?

'' Airlines are protesting a government plan that would require them to take

fingerprints of foreign travelers as they fly out of the USA, saying it could

create massive lines at airport check-in counters.

[flying]

Flying - have they initated this in USA yet ?

'' Airlines are protesting a government plan that would require them to take

fingerprints of foreign travelers as they fly out of the USA, saying it could

create massive lines at airport check-in counters.

Not that I have seen. I flew out mid Feb & there was nothing like it.

[Nouf]

I thought Obama was about negotiation and dipomacy .

Not hardly.............I think it was not long after he took office that he bombed Pakistan.

Errrr I guess I should say he was bombing Al Qaeda Terrorist in Pakistan. Although the 18 dead didn't think so.

We also though he was

1, About " Transparency "

2. and that he was against earmarks

3. he was against raising taxes

and he has falied on those three counts as well - in fact I am beginning

to think the USA was duped by this guy ?

most likely and it wont take long to expose the real truth.

He lacks the skills of a real leader, (he has no balls), he is a lacky, a puppet for the campaign contributers that got him there

The reason why he is there was simply the bad taste Bush left of the republicans, that party simply has no creditability left

same deal with McCain, he is a flip flop, one minute is was all for bail outs when he was running for the presidency now he is anti-bailouts, and now thinks all this stimulus is bad

errrrr what happened, did he see the light

no Obama is the best of the worst, and people just wanted change, anything better than the last party, only they will be disapppointed on his results,

he has a grace period possible the next 3-4 months, when the economy falls away, you will see the Media and the public have a change in opinon

Look at the hatered with Gordon Brown in September he was seen to be the savour of the world, with his plans, now them plans are a joke, in that the governments of the world simply does not understand the real problem, and the real concept of why and how we got here

But the Governments simply dont have the balls to tell the people the world has real problems, (with expection to new zealand, they seem to understand and not making promises they can deliver on)

Obama will slowly lose street cred, because he simply is an Amatuer, he has no real grasp of the situation he is taking on, the situation is far worst than many thought could happen, and he is simply trying to delay the pain by a slow series of cuts

People think he understands, i think even he thinks he undestands or wants to think so, but his policies are BS, he is Bush in a different Suit

Bush never left

He talks about the borrowing and why the creditors like China and the Japan, wont be buying the Bonds in the near future if the spending gets out of control yet he is spending money like its going out of fashion

Even the stimilus bills and what they are spending the money on are crap, they have nothing on production, its shorts term gain, long term pain

Why not build factories to make stuff, get America making stuff gain????

Americans have a real life changing set of pain coming to them, as they will be forced to accept lower wages, pretty much all the West will have to

but like all Ponzi schemes they last longer than anyone thinks, and i think America is just one big Ponzi scheme like wise the UK and other countries

the Likes of Jim rogers and Peter Schiff have got that part right,

when the China and the Japan actually do decide to say NO to the buying of US bonds, then the party stops, when, could be years away from here

Untill a failed Auction happens, the world will keep buying the US paper right now the world still wants US $

so until then, lets spend till we cant spend no more

and once the stimulus is seen not to work they will have another then another and so on, but ALL countries have stimulus`s

we just need to find out who dies 1st and who is left holding the Bag

eventually they run out of options and give up, then the Obama is seen to be the Amatuer he is (again that could be years away)

We have just come of the back of a Ponzi scheme that started 20 years ago

the spending is getting out of control, he lacks the convictions to say "enough is enough", he is surrounded by Idiots like Pelosi, and frank, Summers, and geithner

He is afraid to tell the public the truth, what he should be doing is telling the truth, going after the real people that screwed the wealth from America, and starting re-building Amearica, but he wont, because i think he is ONE OF THEM, part of the Elites that want to screw the small folks,

As long as he is seen to be doing something for the Public, then he keeps them quiet, as long as he has the Press on side,

Its all fine and dandy

What he really needs to do is tell then idiots surrounded around him, to piss off and he becomes the President and do the Job he was voted to do by the People, but i dont think he has the balls to do that, its the other way around, they run the show, Obama is there to sell the ideas to the people because of his skills as a talker

How long will that last???

The only real reason he was voted is because he is a good speaker, but even that is wearing thin, everytime the guy talks, its like he is still on the campaign trail

errrrr he won it didnt he???

He was bought and paid for and is in the white house chief because of who paid for him to be there, he owes many favours, like they all do

Like all politicians they promise one thing in the campaign, but never deliver,

go and look and history its always the same

Yet time and time again the public fall for it

Change we can believe huh!!!!!!!

Edited March 14, 2009 by Nouf

[AlexLah]

What to do, what to do?

Prince Obama, prince of teleprompting.

I think a lot of US citizens have been so dumbed down and lied to, it is a shame.

Will likely take something really really big to happen when they finally realise they have been conned and led straight to the slaughterhouse.

Will be interesting to follow Ron Paul in his action to get more support for his bill that will try to put the fed under the treasury.

Also interesting G meeting coming up but already a big difference between EU approach and US approach, it seems.

Stronger calls to prop up the IMF with another few hundred Billion, I wonder how many trees you need to grow all that money.

All that money needs to be payed back somehow, well at least the interest so definitely all kinds of taxes will be introduced with carbon tax as the biggest scam.

And the greedy elite profiting from all of that, they literally make their profit by just looking from their thrones and putting their pieces into place.

[ronz28]

U.S. House Financial Services Subcommittee let the cat out of the bag Thursday March 12, 2009 in its hearings on Mark to Market Accounting:

http://www.c-span.org/Watch/watch.aspx?MediaId=HP-A-16320

The history seems clear and those that ignore it are bound to repeat it. Up to you. Mark-to-market accounting existed in the Great Depression, and according to Milton Friedman, who wrote about it just 30 years after the fact, it was responsible for the failure of many banks.

Franklin Roosevelt suspended it in 1938, and between then and 2007 there were no panics or depressions. But when FASB 157, a statement from the Federal Accounting Standards Board, went into effect in 2007, reintroducing mark-to-market accounting, look what happened.

Two things are absolutely essential when fixing financial market problems: time and growth. Time to work things out and growth to make working those things out easier. Mark-to-market accounting takes both of these away.

Because these accounting rules force banks to write off losses before they even happen, banks lose time to work things out and the ability to lend since their regulatory capital shrinks and its ability to lend by a typical multiple of ten times the hit to regulatory capital. This happens because markets are forward looking. For example, the price of many securitized mortgage pools is well below their value, based on cash flows. In other words, the market is pricing in more losses than have actually, or may ever, occur.

The new accounting rules forced banks to take artificial hits to capital without reference to the actual performance of loans. And this affects growth of the economy. By wiping out capital, so-called "fair value" accounting rules undermine the banking system, increase the odds of asset fire sales and make markets even less liquid. As this happened in 2008, investment banks failed, and the government proposed bailouts. This drove prices down even further, which hurt the economy. And now as growth suffers, bad loans multiply. It's a vicious downward death spiral.

Under the mark to market rules the market doesn't spring back up because as former Fed Governor Bob McTeer and former FDIC chairman William Isaac noted in their testimony on March 12,2009... mark to market rules state that banks must write down their losses entirely and immediately BUT can only recognize any future gains when the investment is actually sold. Yep, mark it down immediately based on someone else's fire sale but when the market valuation for your investment returns to normal you can't mark it back up, you can must sell it when it returns to full value to immediately recover your losses even though your intent was to hold it for thirty years.

For example, The Federal Home Loan Bank of Atlanta holds three private mortgage-backed securities. But, it has no intention of selling any of them. Again, based on the actual performance of the loans, the bank estimates it will lose $44,000, beginning in 2025. That’s not a typo. It will be another 16 years before any losses are incurred on these loans. Yet because of mark-to-market accounting, the bank was forced to write off a loss of $87.3 million - a figure almost 2,000 times greater than the actual losses. Since a bank's investment holdings form its required regulatory capital that it must reserve and hold... any shrinkage of it causes a reduction in its ability to lend by a typical multiple of ten.

Consider this happening throughout the largest economies of the world and you get the economic meltdown the world has experienced. Correct the misapplication of mark to market where it should not be applicable and life will return to normal.

Marking investment valuations of normal market traded stocks and bond is a good thing and will continue but the misapplication of the technique to untraded and illiquid investment must stop now and return to projected future cash flows (reduced for permanent impairments). The reason it was done was to save a CPA from getting sued because some of the instruments Wall Street has created are too complex to reliably project future cash flows. However, management, independent auditors and regulators must actually do their jobs and assure all investments are reasonably valued rather than simply valuing everything at fire sale prices and they must assure that there are no Ponzi schemes behind the investments or they should all be held accountable.

My summary/edits of articles at:

http://www.forbes.com/2009/02/23/mark-to-m...y_stimulus.html

http://seekingalpha.com/article/125914-mar...e-1930s-is-back

http://seekingalpha.com/article/125729-mar...gs-to-be-broken

http://seekingalpha.com/article/125915-mis...essional-quotes

[AlexLah]

I guess this rule had to be voted back in by congress?

Not sure how this worked, could you explain?

[ronz28]

U.S. FASB -Financial Accounting Standards Board is the accounting rule making body that did this with FAS 157 and IFRS- International Financial Reporting Standards does this for many other countries. U.S. Congress has threatened to pass new laws in this area if FASB doesn't fix the rules in three weeks.

[badge]

i hope they dump mark-to-market, I dont think it'll placate financial markets indefinitely though.

President Obama is the first Black president, and he's going to preside over the worst economic depression in centuries. There wont be another one.

http://www.youtube.com/watch?v=vm9gXcs9Fww

[CPH]

Mark to market should be temporarily cancelled untill a better rule can be set up. It is simply destroying the world economy.

Short selling should be illigal. This makes the market a casino where everytime the market goes up the short sellers will spread their

lies trying to make the market fall. The problem is that the market has a tendency to fall very fast but only slowly climp up again. The

short sellers and the hedge funds are not interested in a normally functioning market with a slow and steady increase over some time. There is simply

not enough money in that kind of market for them. They want the high volatility. They want to be able to go on CNBC and bring the market to fall.

This time it was the large banks, next time its something else. They will find the week spots and use them to the fullest. This destroys all the normal investors

who invests their savings long term for their pension. And it destroys the world economy. Lets get rid of hedge funds and short selling once and for all.

[dageshi]

Gents mark to market is not the problem, the problem is that the glass-stegal law was repealed, that was something that was introduced after the depression which seperated depositor banks (which we deal with) from investment banks which do the speculating and financial engineering, while that law was in effect we did not have a situation like we're in now, when clinton repealed it back in 97 ten years later look at the mess we're in. If mark to market was not in place we'd still be in this situation you can't get past the fundamental truth that the banks made a huge incorrect bet on the housing market and now they're paying the price, the reason that they bet so huge in the wrong direction is the lack of Glass Stegal to stop them working in their areas of expertise.

As for short selling, it doesn't make a difference to how far things fall it only prevents the market from rebounding, remember every short seller *must* buy their stock back that means every short equals a buyer in the future, when the market turns the short seller has to buy back which causes breaks in a decline. When you don't have short sellers then you just get a strong consistant decline with no breaks. Also remember that the phycology of bull and bear markets are different, bull markets are driven by confidence and greed, so they are generally slow inching up a couple of percent a week, bear markets are driven by fear and panic and that's why they're so scary.

Finally the chinese market doesn't allow short selling and it still declined some 80 odd percent last year, in other words it doesn't make a damned bit of difference.

[lannarebirth]

Gents mark to market is not the problem, the problem is that the glass-stegal law was repealed, that was something that was introduced after the depression which seperated depositor banks (which we deal with) from investment banks which do the speculating and financial engineering, while that law was in effect we did not have a situation like we're in now, when clinton repealed it back in 97 ten years later look at the mess we're in. If mark to market was not in place we'd still be in this situation you can't get past the fundamental truth that the banks made a huge incorrect bet on the housing market and now they're paying the price, the reason that they bet so huge in the wrong direction is the lack of Glass Stegal to stop them working in their areas of expertise.

As for short selling, it doesn't make a difference to how far things fall it only prevents the market from rebounding, remember every short seller *must* buy their stock back that means every short equals a buyer in the future, when the market turns the short seller has to buy back which causes breaks in a decline. When you don't have short sellers then you just get a strong consistant decline with no breaks. Also remember that the phycology of bull and bear markets are different, bull markets are driven by confidence and greed, so they are generally slow inching up a couple of percent a week, bear markets are driven by fear and panic and that's why they're so scary.

Finally the chinese market doesn't allow short selling and it still declined some 80 odd percent last year, in other words it doesn't make a damned bit of difference.

Of course "mark to market" isn't the problem. The bundling and selling on of misrated debt that was subsequently leveraged to the hilt is the problem. Have to disect all these bundles if you want to find appropriate valuations. anything else is just false accounting bullshit. "Investors" tend to love that though, as its been good to them in the past.

[lannarebirth]

Mark to market should be temporarily cancelled untill a better rule can be set up. It is simply destroying the world economy.

Short selling should be illigal. This makes the market a casino where everytime the market goes up the short sellers will spread their

lies trying to make the market fall. The problem is that the market has a tendency to fall very fast but only slowly climp up again. The

short sellers and the hedge funds are not interested in a normally functioning market with a slow and steady increase over some time. There is simply

not enough money in that kind of market for them. They want the high volatility. They want to be able to go on CNBC and bring the market to fall.

This time it was the large banks, next time its something else. They will find the week spots and use them to the fullest. This destroys all the normal investors

who invests their savings long term for their pension. And it destroys the world economy. Lets get rid of hedge funds and short selling once and for all.

It was the spreading of lies that made the market rise of course. That, and leverage. A whole fuc_king lot of leverage, and more leverage and then still more. Open up any account at a brokerage and they'll give you 4x levergae. But a 3x ETF and you're long or short 12x the market move. Its ridiculous and its killed the market.

You want to make the market healthier? Get rid of excessive leverage. Not too many really want to do that though, or stocks might approach "fair value" based on "core earnings" and "proper risk assessment". A frightening thought to stockholders.

[lannarebirth]

U.S. FASB -Financial Accounting Standards Board is the accounting rule making body that did this with FAS 157 and IFRS- International Financial Reporting Standards does this for many other countries. U.S. Congress has threatened to pass new laws in this area if FASB doesn't fix the rules in three weeks.

Financial Accounting Standards Board to discuss Mark to Market on Monday

Financial instruments with characteristics of equity (estimated 30-minute discussion). The Board will continue to develop an approach for identifying equity instruments, focusing on the classification of ownership instruments with redemption features. Specifically, the Board will discuss an approach that would divide redeemable ownership instruments into two categories: (a) instruments that are redeemable only upon the holder's death or retirement, and ( all other redeemable instruments. The Board will discuss classification and possible separation of instruments in each category.

Fair value measurement (estimated 90-minute discussion). The Board will discuss additional application guidance that would clarify how fair value measurements are determined in a market that is not active, consistent with the principles of FASB Statement No. 157, Fair Value Measurements. The Board also will discuss how best to present other-than-temporary impairments in the financial statements.

Open discussion. If necessary, the Board will discuss minor issues on technical projects or administrative matters.

http://www.fasb.org/calendar/index.shtml

[Nouf]

Mark to market should be temporarily cancelled untill a better rule can be set up. It is simply destroying the world economy.

Short selling should be illigal. This makes the market a casino where everytime the market goes up the short sellers will spread their

lies trying to make the market fall. The problem is that the market has a tendency to fall very fast but only slowly climp up again. The

short sellers and the hedge funds are not interested in a normally functioning market with a slow and steady increase over some time. There is simply

not enough money in that kind of market for them. They want the high volatility. They want to be able to go on CNBC and bring the market to fall.

This time it was the large banks, next time its something else. They will find the week spots and use them to the fullest. This destroys all the normal investors

who invests their savings long term for their pension. And it destroys the world economy. Lets get rid of hedge funds and short selling once and for all.

It was the spreading of lies that made the market rise of course. That, and leverage. A whole fuc_king lot of leverage, and more leverage and then still more. Open up any account at a brokerage and they'll give you 4x levergae. But a 3x ETF and you're long or short 12x the market move. Its ridiculous and its killed the market.

You want to make the market healthier? Get rid of excessive leverage. Not too many really want to do that though, or stocks might approach "fair value" based on "core earnings" and "proper risk assessment". A frightening thought to stockholders.

Yes, The system is broke, the leverage is gone for sure, (well i would think may have realised that now)

Get rid of the Phony accounting rules, lets see the level 3 asetts, lets see "real Values", back-basics

With all the Ponzi schemes coming to the Attention of the Media, ita was just one big fantasy that many got caught up in from the past 15 years or so,

Like you said get rid of the excessive credit (which the market will do anyhow only it will still take time to remove those leveraged players) as they come up with more BS to lure in others so they can sell into the BS rallies

You will see core earnings in the coming Months, that will make the bullish of bulls cry and the realisation that we are not going to see those dizzy heights of Oct 2007 for a loooonnnnnnggggggg time

and for all those trapped higher, the realisation that their plans have changed for good, unless you have time, i really dont see how we can attain those 1500 SPX and Dow 14K figures

its not a good thing to see mnay suffer, but the system was flawed form the start, only it was sliced and diced far longer than many thought like all Ponzi schemes are

you only have to look at a chart and see where it simply "took off", (90`s and a resonable figure is back to the 450-500 area of the SPX)and the market is simply re-balancing the execessive leverage, it wil take months/years, as the realsation is still yet to hit, there is simply too much optimism that the World can recover

15 years of leverage and its over in 18 months????

markets moving forward Based on what????

Earnings??? where from??? credit expansion??? errrrr i dont think so

The World Banking system is Broke, so a complete revamp of that is needed, but untill governments accept this and look to FIX the real problems, we are not going to move forward

the days of overleverged payers are over, unless by some miracle they can dress it up and start it all over gain, but i think the world has finally "got it"

Hence we are seeing the result of BS fake money it was all an illusion based on pretend Credit models of mathematics

but in reality 2+2 still = 4, not 6 or 10 or 102033887789273892392382

Edited March 15, 2009 by Nouf

[CPH]

Mark to market is okay if there is a market. If you have to market illiquid products in a panic market you will get extremely low prices.

I fully agree that it is the banks own stupid mode of operation which created the problems, but the only way out now is to temporarily

cancel market to market accounting. The other side of the equation is a depression of maybe 5-10 years and the S&P 500 in maybe 350

and widespread unemployment. This is a question of saving what can be saved now.

[cclub75]

Flow of Funds Q4 2008: Debt Deflation confirmation

Buried in the details of yesterday’s quarterly Fed Flow of Funds report is the collapse of the private credit market in Q4 2008 and attempts by the Federal Reserve and Treasury Department to compensate for the loss with government credit as the world's largest lender of last resort.

An article on iTulip.com

Interesting, with good questions about China...

Edited March 15, 2009 by cclub75