virginCFAhooker Wrote: ------------------------------------------------------- > Learn to spell his name right then lecture us on > how he ignores market noise. Sorry about the missed “t”, VCFA. No lecture, though. Simply an observation.
apparently our cuts is related to the number of call volumes. I asked if the other areas of the bank are affected and they said no. anybody here looking for an assistant? I heard from some people that CIBC has already been cutting.
I don’t think there is much Helicopter Ben can do either. But I think he’s going to move tomorrow morning (maybe announce something tonight) to try and slow things down. Thus we are back to a slow train wreck, and not a whip-lashing crash, but still end up at the same lows. If I recall correctly, weren’t many of the Asian markets closed pre-Black Monday 1987 which resulted in a huge selling pressure once the U.S. did open from these built-up foreign sell orders? I thought I remember reading/hearing that somewhere as one of the many factors leading to Black Tuesday when everyone was celebrating the 20 year anniversary. Tried to google but too many articles to go through. I guess may point is Helicopter Ben will move within 17 hours to alleviate some of this building selling pressure.
Wow, a 700+ drop? At what point does the exchange stop trading - 10%?
i wonder what its like on the trading floors…even discount brokers are going crazy…
N.VanCandidate Wrote: ------------------------------------------------------- > Problem with this market is not one or two > issues, > Here are a few of them…US economy is on the brinks > of recession with US Govt’ in huge amount of debt. > Consumers have no confidence in the economy and > neither do they have money to spend in it > regardless of any rate cuts. Avg. American is in > huge debt due to real estate market and > overspending for years now (living beyond their > means). Credit Card debts, MTG, Car Loans, etc… > will all be defaulted on more and more. As more > people default on their debt more co.s will go > down south towards negative territory; MKT goes > down with. Yes more rate cuts sounds good but in > an economy where people have the cash to > spend…last time we had 13 consecutive rate cuts > (After 9/11) people had more cash and less debt, > hence were able to spend and stimulate the economy > of US which is 70% based on consumer spending. > This time there is no chance of that happening. > Due to high inflation it is not a good idea to cut > rates but Feds will do it anyway. > Another issue contributing into the pot is the > Asian MKTs, for many years now Asians have been > borrowing at ridiculously low rates such as 0.25% > and investing in other markets, now they are > selling off and taking in their profits, pushing > down the MKT which in turns help the downturn. > With Currencies like yen appreciating Asians are > taking their profits out of foreign countries so > the appreciation of their currency does not eat > away at their profit. > One last note, traders and people in general get > emotional and start selling off (like last week > and half) and plunge the market beyond what the > fundamental suggests. > Not to forget US Gov’t has been too busy spending > trillions of dollars on war and inflating the oil > price (increasing the inflation) and ignoring > their own economy. > I might get slammed for this comment but “George > Bush has been the worst thing that ever happened > to USA, filled his own pocket with Middle Eastern > Oil Money and f**ked US economy and now will > retire in a tropical island and leave a huge mess > for the next poor sole. But then again America is > to blame for voting such an idiot into office. > Many more reasons why the market is going south > but those I mentioned are key ingredients….No one > can tell what will happened but one thing is for > sure it won’t be pretty. Very good analysis NVan. But, I disgaree completly with your politics. W has been a dissapointment no doubt about it, but I can’t logically blame him for a credit crisis caused by cheap money and toxic securitization which was smiled upon by the fed and the bond rating agencies. Bush’s biggest mistake, besides Iraq I guess, was not to veto the ridiculous spending of the congress. He has no control over monetray policy (THANK GOD) so we can only really blame him for the unneccessarly stimulative and wreckless fiscal policy between 2001-07. Oil is through the roof for two reasons. One, because the dollar is crap, partially W’s weak dollar policy, but with trade deficit and huge consumption and low levels of saving you referrence above, that is the probably the right policy. The other reason is due to the massive demand growth we’ve seen the past few years from emergings with a supply glut thanks to low exploration in the late 90’s. But we are generally in agreement NVan. They say every conversation comes back to politics, and I guess it really is true.
I think the issue is that the government is supposed to govern. So whoever’s at the helm, gets the blame… unless its Iraq or Katrina, or something like that… then whoever’s near who’s at the helm gets the blame, at least in the short term…
BosyBillups Wrote: ------------------------------------------------------- > Wow, a 700+ drop? At what point does the exchange > stop trading - 10%? Well the Dow closed Friday at almost 12,100 on the dot, so that’s only about 5.8% to the down side. I can’t believe I just wrote “only” and “5.8%” in the same sentance. Either way, there will be a lot of coffee drank tommorow morning on Wall Street and a lot of long faces going up the elevators.
As dumb as W is, are you people seriously telling me Kerry would have this market in better situation? I mean when you say Americans were dumb enuff to vote for W, well what choice did they reall have?
BosyBillups Wrote: ------------------------------------------------------- > Wow, a 700+ drop? At what point does the exchange > stop trading - 10%? This will provide only moderate reassurance: http://en.wikipedia.org/wiki/Trading_curb
> Oil is through the roof for two reasons. One, > because the dollar is crap, partially W’s weak > dollar policy, but with trade deficit and huge > consumption and low levels of saving you > referrence above, that is the probably the right > policy. The other reason is due to the massive > demand growth we’ve seen the past few years from > emergings with a supply glut thanks to low > exploration in the late 90’s. > those are not the only reasons. the days of cheap, easy to find oil are over. exploration and development costs continue to rise, as well as the increase in production from unconventional sources, which cost significantly more to product (ie. oil sands). that combined with political instability in important producing countries (such as iran & nigeria) have only fanned the flame. and i think you mean “supply bottleneck thanks to low exploration in the early '90s”. a supply glut would mean the market was flooded with supply.
goes to eleven Wrote: ------------------------------------------------------- > Where are all of my Warren Buffet fans? How does > the condition of the European or Asian stock > markets on Monday affect the value of a company > that I own? It doesn’t, and I am surprised that > their are words like “disaster” “short everything” > and various signs of panic are being tossed around > a forum like this. > > I figured most charterholders and candidates would > have a value bent to them. Y’all sound like a > bunch of day traders. > > Find some great companies trading at discount > prices, buy them reasonably and ignore the noise. > > I may be naive in the short run, but I think I > will be okay in the long-run. No, don’t worry about it. You’re naive in the long-run. First, it’s completely clear that exogenous events do affect the values of stocks. Stock markets are getting crushed because of the collective realization that we have some serious problems that will affect the ability of companies to sell stuff, increase the uncertainty surrounding their cash flows, and make it harder for them to finance their operations. Markets don’t just go down for no reason, usually - they go down because valuations have changed. Next, in a case like this there is an ugly cycle that several trillion dollars of paper wealth goes away cutting a huge swath in consumer confidence. While the market may be going down because of recession fears (and other reasons), the stock market going down increases the likelihood of recession. There is almost no doubt that we will emerge from this problem sometime and the Dow will eventually be at 25,000. If you bought stocks the day before the '29 crash you were doing better than putting your money in cash in something like 18 years. There is little chance it will take that long this time. In between though you would have seen 85% of your money go away. That’s real pain.
jeff_s Wrote: ------------------------------------------------------- > > Oil is through the roof for two reasons. One, > > because the dollar is crap, partially W’s weak > > dollar policy, but with trade deficit and huge > > consumption and low levels of saving you > > referrence above, that is the probably the > right > > policy. The other reason is due to the massive > > demand growth we’ve seen the past few years > from > > emergings with a supply glut thanks to low > > exploration in the late 90’s. > > > > those are not the only reasons. the days of > cheap, easy to find oil are over. exploration and > development costs continue to rise, as well as the > increase in production from unconventional > sources, which cost significantly more to product > (ie. oil sands). that combined with political > instability in important producing countries (such > as iran & nigeria) have only fanned the flame. > > and i think you mean “supply bottleneck thanks to > low exploration in the early '90s”. a supply glut > would mean the market was flooded with supply. sorry, that’s what meant. Bottleneck. Your other points are valid as well. There are obviously many reasons for the price of anything, including oil. We could have also listed increasing nationalism of oil producing nations etc.
JDV: I agree with everything you said, including “we will emerge from this problem.” I agree that exogenous events affect the value of stocks and I agree that in many cases the valuations have changed. I guess we disagree on what “long-term” is. You want to talk about pain? I work in a domestic, small-cap value shop and we have been buying REITs over the past several months. And I work with private clients who are absolute, not relative investors. Go ahead, kick me in the jimmy.
I havent read the convo so I am jumping in with all you sharks without knowing what has been said. In my opinion…we are F*ed six ways to Sunday. Incremental debt as a percentage of GDP has never been higher. If we go back to only a normalized level…we can basically shave GDP to a level we have not seen since the Great Depression. Im not calling for a depression…but I do believe we are in a recession. Consumer spending has taken a dump…the consumer’s biggest credit card (their house) has tumbled… The strength of our economy is dependent upon the creation of new debt. That is what worries me going forward…whats done is done. One last thought…i hate these F*n rating agencies. Everyone was loving the CDOs at the top. Couldnt get enough of them. Now you have all these rating agencies filled with newly minted MBAs coming out and basically treating all this paper like leprocy (sp?). Thanks captain obvious…a bit late to the game maybe??? In conclusion…i believe we are in a recession. It seems almost obvious we are. Whether or not the govt stats will back this up is uncertain…but those stats are so far from reality to begin with…so who knows. On top of all this…I start my new job tomorrow. What a time to jump ship. I will always remember my first day of work at my new place. Glad Im no longer at an RIA with 150 mil AUM…a sizeable haircut will lock the doors there.
jbisback, I agree with you about the ratings agencies… they used statistical models instead of fundamentals to rate the bonds… big mistake. however, I disagree with your other outlook… you are cherry picking the most pessimistic viewpoints of our economy. In other words, spin like this: look at incremental debt relative to borrowing costs, etc.
^ I agree with you that we could go into a depression, maybe not now or in the next few years but eventually as the only way out of this mess is more debt which only sets things up for even a bigger fall, aka “depression”. Now that would send US back 30-50 years back. Only time will tell but the big question is can this be stopped??? Maybe the best thing is to let market and economy hang itself with this rope and not cut interest rate??? Might be ridiculous to do short term but saves us long term!!!
NVan, i agree with no rate cuts. The subprime thing was a mistake. people have to be punished for their mistakes. a depression will NOT set us back 50 years.
sounds like same market panic talk that I heard in 1998 and then again 2002. This is a good cleansing that the market tends to do to leveraged speculators and investors with horizons less then 5 years. this is how bottoms are made. when everyone thinks the economy and markets are doomed.
the optimist in me wants to believe the point of capitulation in nearing…when I puke i’ll rush to my comp to let you all know. My chucking is usually a pretty good indicator we are at that pt.