what is the market discounting?

i’m trying to figure out the market… when will it bottom? i think soon (price and time-wise), but that’s a pretty easy, popular prediction. but do people think the market will sell off heavily for each of: gm/ford/chrysler bankruptcies. rescue packages being necessary in up to 10 countries. huge hedge selling (or are we well along that curve already) credit card problems CDO problems (we’re partway there for sure) commercial mortage problems. 12% default rate in high yield-land more european bank problems. frankly, i do think much of these possibilities is discounted in the market. i.e the market is priced for alot more trouble. but i’m wondering this too (someone had small thread)… who has money to buy this market? buffett? who else?? i guess middle eastern sovereign wealth funds (and yes, i do think they’ll buy) anyway, somewhat meandering… curious what other people think vis-a-vis the market discounting future adverse events.

the year AFTER an election has historically been a winner…so say 2009 if asked, and if asked for more detail, say “whenever the f*** we are done deleveraging” thats the crappy shortcut answer

daj224 Wrote: ------------------------------------------------------- > the year AFTER an election has historically been a > winner…so say 2009 if asked, and if asked for > more detail, say “whenever the f*** we are done > deleveraging” thats the crappy shortcut answer Except if Obama gets in and raises the capital gains tax. Don’t forget taxes increase automatically if nothing is done… If it’s cheaper to take all $$ out now, people will do it…

its just artificial selling keeping this market - institutions would be buying down here at these levels if they could. It cant last forever. BTW, everyone is waiting for a “capitulation” type day and it just isnt going to happen now. It will happen sometime in 2009 as the all the money on the sidelines reenters the market because they thought “the bottome was in”, but it will prove to be premature and we will most likely retest 900 on the S&P but not before we we try to break 1270 area on the upside.

we’ve had probably 5 days where everyone yelled capitulation. and now at least two days where people were terrified that nothing can be done and we’re headed for great depression… those were probably closer to “true capitulation” i’m wondering if people will see that ukranian distress isn’t so bad. even if amex gets into trouble, not so bad. the u.s. government will do some sort of backstop (maybe not for bond or equity holders, but definitely for the system). GM or ford bankrupcy would be big but the yields on this stuff is monstrous already. so it won’t be a surprise… i guess the big thing with bear, lehman, rbs, aig troubles is that they affect the financial payments system. BTW, add life insurance to my original list. has anyone looked at their charts?

GM or Ford bankruptcy would create a whole other slew of CDS fun. According to sources, that would be the tipping point. GM or Ford won’t be allowed to go bankrupt.

Ford has plenty of money (particulalry since they saved money from the good times and leveraged every single thing they could…risky…but better than the alternative). They are in the best shape of the Big 3 as far as who is structuring themselves to survive the next 20 years. GM will likely be given a lot of money by the Feds so that they can buy Chrysler. Chrysler may be screwed in the long-term. I think GM is trying to make a pretty penny by buying them now and selling them in 3 or 4 years. After that, I’m not sure how much more Chrysler is going to be able to take.

thanks, those were great comments about ford, GM and chrysler… funny how things change. chrysler was the best of the lot not that long ago… of course, gmac was the jewel of General Motors, and Rescap was the jewel of GMAC. now, it’s bizzaro world