Things are pretty ugly out there in Asian and European trading, with US closed today, we’re likely headed for a huge drop on the open tommorow unless things reverse. Germany was down 6% a few minutes ago, that’s massive for a developed market. I know I just predicted some fed intervention on Friday, which didn’t come though. But I still think it is possible to see the fed do something. Could tommorow, or something coming soon be the worst since Black Monday??
Oh boy…This is pretty grim. I don’t think it’s going to be Black Tuesday tomorrow, but it looks to be ugly. Nothing like announcing a stimulus package and having the world respond by repricing securities by a couple of trillion dollars. “Oops. Messed that one up. Only cost us two trillion dollars, but at least we didn’t get attacked by any of them terrorists”
Ugly. That’s the only way to describe it. Ugly. Cuz she ain’t pretty.
JoeyDVivre Wrote: ------------------------------------------------------- > Oh boy…This is pretty grim. I don’t think it’s > going to be Black Tuesday tomorrow, but it looks > to be ugly. Nothing like announcing a stimulus > package and having the world respond by repricing > securities by a couple of trillion dollars. > “Oops. Messed that one up. Only cost us two > trillion dollars, but at least we didn’t get > attacked by any of them terrorists” LOL. Unless al-Qaeda is unwinding carry-trades, dumping MBS, CDO’S CLO’S and shorting equities??? I’m sure it won’t be like Black Monday on the scale, but if this keeps spreading tonight, we could easily see 5-7% down tommorow, maybe even 10. We’ll see. The folks up here on BNN, Canada’s business network, no CNBC today, are comparing it to Black Monday. These are usually a pretty sober lot (similar to Bloomberg, not CNBC). Interesting
DAX down 6.7%. Ugh…
Darn it, I shoulda shorted more (my plan was to short half of the target amount when I did it last week, and then wait until the Fed does something, then short the other half after the fed actually does something.). The idea was to start the short position but have a chance of catching a fed bounce. Maybe that still makes sense, but I’d have felt better just being neutral the market and not having to worry about this cr*p. That was the main goal anyway… I should have just done that. Oh well, live and learn. At least it’s not my eating money that’s being eaten.
Joey, I’m guessing you have the most market experience on this thread. How does this rate up with some stuff you’ve seen over the years. It’s pretty ugly out there, Europe and Brazil are down 6% or so, Toronto 5. This is really bad…
So one interesting question, why today? Is there something special about US markets being closed, or is everyone deciding to get out because of stuff on friday, and they just can’t do it in the US. What’s happening to the dollar?
strengthing a bit, falling against the Yen, high 105’s. Dollar Index is in high 76’s. Not realy volatile, I think that there will be a pretty big flight to treasuries, as low as the yield is, so I’m not overly surprised with the dollar. Key currency risk guage though, NZDJPY is down to 79. Overall I would say, the currency market response is somewhat muted considering what is going on in equities. Gold is also down a bit.
CFA_Halifax Wrote: ------------------------------------------------------- > Joey, I’m guessing you have the most market > experience on this thread. How does this rate up > with some stuff you’ve seen over the years. It’s > pretty ugly out there, Europe and Brazil are down > 6% or so, Toronto 5. This is really bad… Well, I don’t know about most market experience or whether my experience matters here, but this looks pretty bad to me like 1998 only with more structural problems and no defining events (Russian default, LTCM collapse) yet. In 1987, there weren’t any real significant problems that led to the market drop - just jitters and a market that had gone up too much, too soon. In '98 there were some global problems especially after the Russian debt collapsed but the credit problems don’t seem like they were as bad then as they are now. I think this is pretty bad (see previous Dow 10000 prognostication). All that’s missing for a bona fide collapse is a signature event. A Citibank or Merrill bankruptcy would do it, though I don’t think that’s going to happen. A terrorist strike (say, today) would do it, and I hope that’s not going to happen. I’m pretty grim about this - we have convergence of a credit problem, a derivative structure problem with CDO’s (like in '91 with CMO’s), recession fears, collapsed dollar, inflation and a Fed determined to cut interest rates in the face of inflation signals, 2 wars and sabre-rattling for another, and completely incompetent leadership in DC. How are we going to resolve this? BTW - would anybody feel better if Barack Obama was going to try to lead us out of this mess? I can’t believe I’m missing Bill Clinton so much.
JDV - what’s amazing, is put yourself in the general opinion one year ago. Everyone was Overly bullish on how things were going, and there was no end in sign. In fact, some were forecasting a fed rate cut and were considered loony for even thinking we might slow down. We need to remember this lesson because it will happen again. So much for decoupling, too.
PS - the true contrarian play is that we have hit a bottom with all this negative sentiment and action and to start buying.
Bosy, I think we are probably nearing a bottom (but who the hell know in these markets, right). Once this round of bleeding stops as I think we are probably going to be seeing the Dow in the low 11’s or high 10’s and S&P around 1200. That might be a good time for buying. But Joey makes a very good bear case, the inflation thing, and steepening yield curve is what really scares me.
lol toronto is having a mid-day surge from -5.5 to -3.9… too bad the stocks I care about are down to 52 week lows and are off more than 10%.
Regarding the AMBAC bond insurance with a potential BK. I always remember the investing cliche’ “there is never just one cockroach in the kitchen.” Once you see one, you will see more. As in the mortgage mess, CDO mess, savings and loan, etc. I doubt AMBAC is the only one, and things can get pretty messy when more come out and show their illiquid status.
I think Joey makes a good point about trigger events… At the moment (and since Bear/ML/Citigroup first reported problems), I have been concerned about a large bank going bankrupt, or something else that would really crush the markets. It could also be a terrorist attack as he mentioned, but even scarier are the unknown unknowns. They always get ya. What are we not expecting to go wrong that could?
Here would be my list, in no particular order of importance or probability - Bank of America calls of it’s buyout of CFC, and CFC goes bankrupt - Chinesse market crashes - Greenspan starts talking trash about world economy again - Anything with Iran (Israel attacks, blockade of straits of hormuz etc.) - assasination of another world leader - Giants win the superbowl - Second half of the new season of LOST is scrapped because of writters strike - Sly stops making sequels to really old movies
Hahaha good list, but im afraid China will collapse. A lot of people thought it would after the Olympics ended maybe this will bring it upon us just a bit earlier.
If Asia and Europe free fall again tonight, does Helicopter Ben announce intra-meeting move before the market opens to try and stabilize? He just might have to or we could see a 500+ point drop on Tuesday.
Could one benefit from such free-falling economy?