Deutsche Bank Derivatives Loss May Top $400 Million (Update2) - Bloomberg.com
Deutsche Bank Derivatives-Trading Loss Said to Top $400 Million
Germany's biggest bank, lost more than $400 million on equity derivatives trades as stock markets headed for their biggest rout since the 1930s, two people with direct knowledge of the matter said.
It disturbs me that credit being made available to fund acquisitions is perceived as 'good'. It just seems to me that if a company wants to grow their business, that is a good sign, but using what is a scarce resource (credit) to simply consolidate within industries is a poor use of credit. Especially if it is taxpayer funded credit.
Fueling more acquisitions is not the way out of this mess.
posted this on last thread, but I think it's interesting.
re real estate,
I saw a law school classmate who works in the midwest this weekend. He's prosecuting contested foreclosures for banks. Two interesting tidbits.
loan workouts happen when the borrower challenges who owns the loan and it's been sold so many times that it's too much time and trouble to find the paperwork. It doesn't go to trial, and the bank would ultimately win, but having to show evidence of ownership is powerful motivation for the bank to deal.
A significant number of home sales were made in his city where the price was too high for the rough neighborhood, the loan came through easily and no payments were ever made. Example, 100k loan for a house worth ten. I've got a lot of sympathy for individual homedwellers in trouble, but it looks like a lot of mbs was backed by con artist bs from the start.
Comrade Clueless Dufus, this is a good acquisition. The target has gone BK (too much debt), and this acquisition will keep most people employed (except management and some duplication). This is the best deal for the debt holders of the BK company - and a good deal for the acquirer (a really nice fit - I know some of the details). This is a win win all around - and good for the economy too.
If by "positive" you mean that the highly manipulated and gov't subsidized credit markets are moving in a direction in which bad/failed business models can be sustained with artificially cheap credit in order to kick the can even further down the road, then yes I agree.
So anyone know why the rest of the world continues to tank? Have the powers that be decided that we will have a long, slow grind down rather than swan diving like everyone else? Are they waiting for the elections to end?
You should add some kind of currency volatility index to your list of indicators, if such a thing exists.
It seems likely to me that the extreme moves happening will cause a lot of derivatives to blow up, and a lot of lost value wrt hedges. Not to mention huge losses for carry trades that weren't first in line to unwind.
"During a recession, this [A2/P2] spread usually increases because the risk of default for lower quality paper increases. However the recent values (over 400 bps) are far in excess of normal. If the credit crisis eases, I'd expect a significant decline in this spread."
This coincides with my notion that the worst part of this sell-off is attributable to the credit crisis and that it has already overshot a recessionary sell-off.
404 Not Found
Martial Law Plans Revealed?
It's becoming increasingly obvious that plans for declaring and implementing martial law are nearing finality. Listen as Representative John Haller can hardly believe what he's reading especially when it gets to the part on the new Bill of Rights.
Should a senior manager at a public company be telling anyone that his company has just received loan commitments from two major lenders for an acquisition?
Martial Law Plans Revealed?
It's becoming increasingly obvious that plans for declaring and implementing martial law are nearing finality. Listen as Representative John Haller can hardly believe what he's reading especially when it gets to the part on the new Bill of Rights.
FFDIC | 10.27.08 - 12:31 pm
- NY Times
15 Additional Banks Plan to Seek U.S. Aid
The additional 14 banks that have announced they will use the government funds includes: PNC Financial Services Group, $7.7 billion; the Capital One Financial Corporation, $3.55 billion; the Regions Financial Corporation, $3.5 billion; SunTrust Banks, $3.5 billion; Fifth Third Bancorp, $3.4 billion; KeyCorp, $2.5 billion; Comerica, $2.25 billion; the State Street Corporation, $2.0 billion; the Northern Trust Corporation, $1.5 billion; Huntington Bancshares, $1.4 billion; the First Horizon National Corporation, $866 million; the City National Corporation, $395 million; Valley National Bancorp, $330 million; Washington Federal, $200 million; and First Niagara Financial Group, $186 million.
FFDIC, looking at that list, which I thought they were gonna release slowly and carefully, does that mean we start shorting any bank on the plan or off the plan?
Anonymous writes:
FFDIC, looking at that list, which I thought they were gonna release slowly and carefully, does that mean we start shorting any bank on the plan or off the plan?
Anonymous | 10.27.08 - 12:37 pm | #
Sheila Bair claimed 98% of U.S. banks were well capitalized so there is your answer while we await the FDIC's next false problem bank list. Short!
More than $12 trillion has been erased from the market value of equities so far this month, accounting for about one- third of the total value wiped off stocks this year, as $680 billion of writedowns and losses by banks triggered a freeze in credit markets. European Stocks Decline; SocGen, Postbank, DSM Lead Retreat - Bloomberg.com
When Bush signed the bill Oct. 3, the New York Stock Exchange (NYSE) Composite Index was valued at $14.3 trillion, closing at 7,088 points. The Composite Index, unlike the Dow Jones Index, is a look at how all stocks in the market are faring.
Over the last 14 trading days, the market has lost 1,417 points, worth nearly $2.9 trillion in value--roughly $214 billion per day. As of Thursday, Oct. 23, the market had fallen to 5,671 points, worth $11.4 trillion. By the close of the market on Friday, the index had fallen another 244 points, to 5,427--with the new estimate of total value not yet available.
The TAIEX has lost 24 percent this month as part of a rout that has wiped US$11 trillion in value from global stock markets and prompted governments across the world to introduce measures to limit declines.
"The duration of the world recession will be as damaging to world markets as its depth. In the industrialized world, it is likely to drag on well into 2009," wrote Peter Dixon, from Commerzbank in London, in an analysis note.
"The G7 statement has increased the chance of early coordinated rate cuts this week," said Hans Redeker, global head of FX strategy at BNP Paribas.
CR - I understand what you are saying, that this particular deal is a good one, but if it was that good, why does it take taxpayer money to do it, instead of the banks' own money?
"Prol Geoff writes:
Progress? Looks more like now the Fed is becoming the lender of only resort. There just isnt enough firepower to win this battle in the end."
Well, the $700MM is meant to recapitalize the Fed first.
There is really no credit crunch yet for good borrowers. There is a slight moderation in credit availability from what we are used to to riskier borrowers/projects.
I'm not sure just exactly how you pro rate the facts that good borrowers are paying a generally fair price while people who shouldn't be borrowing are paying usurious rates with no intention of repayment. Seems to me the "cost" to the consumer of credit is low in both cases in aggregate. There's a reason Casey Serin didn't care about the terms of any of his loans. It was ultimately very cheap credit to him.
'GM executives have asked Treasury to consider taking a stake in the Detroit-based company, said one of the people, though the government is reluctant to do so.
Another reason I love/hate Jim Rogers. A couple of months ago, he doubled down on agriculture for the long run. In an interview, he said that most of farmers were old and that the laid-off stockbrokers needed to learn how to drive a tractor.
OT: Stuck in the car on Thursday and was listening to news radio.
The top of the hour national news highlights were (in this sequence):
1) The new number of foreclosures reached an all-time high and the Treasury and FDIC will mitigate mortgage losses using the $700B bailout package;
2) Mortgage rates are lower than last week, so if you're looking to buy, now is a good chance.
So even with the very serious bad news about foreclosures skyrocketing and the economy getting soft, by all means let's get back to real estate speculating because interest rates are low.
There's still no fear in the market. Too many folks are worried about missing the next rally (real estate, stocks, commodities, whatever).
Until there is fear and the 'born and bread' dopes get it, or the government makes an unexpected and huge mistake, I don't see a lot more downside (especially as the credit indicators improve).
"In the past month, Japan's currency has increased 14 percent against the dollar, 34 percent versus the euro, 55 percent versus the Australian dollar and 44 percent against the New Zealand dollar on speculation investors will unwind carry trades, in which they get loans in countries with low borrowing costs and seek higher returns elsewhere."
US market stability in the teeth of a global revaluing: Don't forget that it is only six weeks or so set the end of year portfolio. Think of it as window shopping in anticipation of window dressing.
Oversold. Panic and forced selling. Strengthening $ pulling foreign investors. DOW will hit 10-11k then process starts over again.
Anonymous | 10.27.08 - 1:07 pm
I think you overestimate how quickly people will take profits out of an upswing in the market.
FFDIC writes: http://www.stockmarketimplode.co...s- revealed.html
Martial Law Plans Revealed?
It's becoming increasingly obvious that plans for declaring and implementing martial law are nearing finality. Listen as Representative John Haller can hardly believe what he's reading especially when it gets to the part on the new Bill of Rights.
FFDIC | 10.27.08 - 12:31 pm | #
just a spoof, put out by the Onion. Running all over the internet. Even Ron Paul has no info on its validity.
Friardaddy - you really cant create the fear you are talking about when it comes to housing markets. Some of us realized long ago that buying (in most markets) was absurd. Some people will take years, and possibly over a decade to figure it out, because it happens too slowly. It's like looking in a mirror...you are aging every day, yet each day you look at yourself, you seem to look the same as you always looked. But take snapshots of now vs 10 years ago, and you'd be shocked. It's the same with housing..each day the drip of water torture is so amorphous and intangible to most people, that they cant realize how they are slowly losing out. There will be suckers along the way, but the later they buy in, the less their losses, and they'll be able to rationalize it away. No way to ever really get the full capitulation we seek, or so it seems now. Maybe in a few years I'll think differently. But I still encounter far too many people who completely dont get it.
No, it may go up a bit, 9000-9500, but you aint gonna see 11,000.
throw ta in the garbage, never before has there been a crisis of this magnitude with the level of global govmy interventions to prop stock markets.
The last rally was exceedingly short and weak. No followthru. we are seeing lower highs. if it rallys , I expect it to be quite weak, as global currecy problem continue to exascerbate. Shorts wont be rattled out easy because the retracement was pretty slow.I expect it to break to downside, question is when.
Why is the DOW going up when the rest of the world is going down?
Because the rest of the world is requiring the banks that receive government funds to put that money to productive use, but our treasury finance program bypasses business activity and allows the funds to pass directly to shareholders via dividends and LBOs?
Another reason I love/hate Jim Rogers. A couple of months ago, he doubled down on agriculture for the long run. In an interview, he said that most of farmers were old and that the laid-off stockbrokers needed to learn how to drive a tractor.
Now there's an idea for reeducation-through-labor camps in the countryside.
I'm starting to wonder if we might not see full-blown capitulation in stocks this time. There are just too many vultures hovering, and too much talk about how smart it is to buy at the bottom and how the markets are at historical lows, blah blah blah. The indexes will be ground down some more, but the bottom will be indistinct and higher than expected - and thus the rebound weak.
But my timing is always about 2 years early (I thought tech stocks were unsustainable in 1997 and I sold my house in DC in 2005) so shorts might want to load up again.
PeakVT,
Let me guess that you weren't old enough and/or exposed to people trying to invest circa 1970-1980. Vultures are betting, not investing. There won't be many winning bets for a decade.
--
"t's only perception..The US has
always had other Countries in a fog.. Jas Where are you on this?"
mainstreetamerica,
Lest we forget, or wish to remain in denial, US IS a global empire. US uses other countries the same ways as many successful empires have done for millennia. No, America is NOT more enlightened than the past empires. It is currently (past decade or so) a DESPOTIC EMPIRE!
The collapse of the American Empire is now in sight -- within 25 years. And with it the dysfunctional democracies around the globe.
Remember 1997? The problem is that an offshore crisis in todays financially interconnected world is just as much an ONshore crisis. If any of those bigger European banks take a hit, it will be just another AIG, i.e. too big to fail no matter which side of the Atlantic or Pacific you are sitting on. Borders hardly matter anymore.
Processors usually cover half the financing needs of farmers by accepting part of the future crop as payment. No one is doing it,'' Dahe said.It's stopped.''
But if you read the article quickly, it sounds like credit is drying up in the US. The fact is, there's plenty of credit for people with good credit history. Not so much for people with bad credit.
Remember 1997? The problem is that an offshore crisis in todays financially interconnected world is just as much an ONshore crisis.
Agreed a huge portion of profits for US firms are also tied up in Europe.
However, It will take some time for this to sink in for Joe and Jane 401k owner, and for our markets to adjust to what has happened oversees. Thus they are dropping today while we are going up...
If Brazil and Argentina cut back significantly on their food production or even just their exports, world food prices will rise dramatically. Not a fun prospect.
Thanks to virtually unlimited acreage, ideal weather conditions and advanced technology, Brazilian farmers are also No. 1 in exports of beef, coffee and orange juice, and are quickly climbing the charts on other commodities, such as soybeans.
Not exactly calling shenanigans. But this "rally" on light (and dwindling) volume and that seems to be inordinately focused on the big boys is not terribly impressive IMO.
Agreed a huge portion of profits for US firms are also tied up in Europe.
I am much more concerned about CDS and other derivative issues than profits at this time. Profits from overseas operations at this point are incidental and with dramatically falling exchange rates they might even be illusionary.
I don't think that stock markets at this points are driven by fundamentals nor should they be. IMO it's impossible to project earnings forward in this environment.
The gov't is the only lender today! Mortgage lending is totally dependent on Federal backing and add the CP and other related financial lending outlets. Nothing about the credit markets is healthy, its like lending 100K to your brother-law for a down payment on a house and suddenly they are taking European vacations, shopping at Rodeo Dr. while going into foreclosure.
Something stinks with this "rally" big gains in the indexes, low volume, and a loss on the broader markets. But it's not like there is some huge 500% mover either, pretty tame day actually.
I think we're setting up for an elevator ride to a new low on the broader indices. A drop to something under 5200 on the NYA and/or 1500 on the COMP with less conviction than on last week's dives (Tu close into W open and W into close and Th before the 2:30 rally) and I'm going to start cashing out some shorts.
Nemo?
A winner is me?
first
really??? better?
No way, first?
Not even close. WTF?
If banks can go to the fed whenever the need arises, Does the interbank rate matter as much (at all) anymore?
Watching the Growth of Walmart Across America | FlowingData
Apicture is worth a 1000 words.
Nemo-ish?
Deutsche Bank Derivatives Loss May Top $400 Million (Update2) - Bloomberg.com
Deutsche Bank Derivatives-Trading Loss Said to Top $400 Million
Germany's biggest bank, lost more than $400 million on equity derivatives trades as stock markets headed for their biggest rout since the 1930s, two people with direct knowledge of the matter said.
It disturbs me that credit being made available to fund acquisitions is perceived as 'good'. It just seems to me that if a company wants to grow their business, that is a good sign, but using what is a scarce resource (credit) to simply consolidate within industries is a poor use of credit. Especially if it is taxpayer funded credit.
Fueling more acquisitions is not the way out of this mess.
posted this on last thread, but I think it's interesting.
re real estate,
I saw a law school classmate who works in the midwest this weekend. He's prosecuting contested foreclosures for banks. Two interesting tidbits.
5 year TIPS - nominal treasuries spread suggests deflation. Not a good sign.
Comrade Clueless Dufus, this is a good acquisition. The target has gone BK (too much debt), and this acquisition will keep most people employed (except management and some duplication). This is the best deal for the debt holders of the BK company - and a good deal for the acquirer (a really nice fit - I know some of the details). This is a win win all around - and good for the economy too.
Best Wishes.
but using what is a scarce resource (credit) to simply consolidate within industries is a poor use of credit.
Not all acquisistions are consolidations.
CR
If by "positive" you mean that the highly manipulated and gov't subsidized credit markets are moving in a direction in which bad/failed business models can be sustained with artificially cheap credit in order to kick the can even further down the road, then yes I agree.
Yahoo's stock ticker is stuck again...
Unsticky Ticker:
Markets Data Center Home - Market Data, Indexes, Stock Quotes & More - WSJ.com
So anyone know why the rest of the world continues to tank? Have the powers that be decided that we will have a long, slow grind down rather than swan diving like everyone else? Are they waiting for the elections to end?
CR
You should add some kind of currency volatility index to your list of indicators, if such a thing exists.
It seems likely to me that the extreme moves happening will cause a lot of derivatives to blow up, and a lot of lost value wrt hedges. Not to mention huge losses for carry trades that weren't first in line to unwind.
CR -
Just drawing your attention to this from the previous thread. Curious if you have any input.
HaloScan.com - Comments
Are they waiting for the elections to end?
I think that has to be a factor, however small.
Breaking news writes:
So anyone know why the rest of the world continues to tank?
We're both more willing & more able to inflate the gvt. debt bubble.
"During a recession, this [A2/P2] spread usually increases because the risk of default for lower quality paper increases. However the recent values (over 400 bps) are far in excess of normal. If the credit crisis eases, I'd expect a significant decline in this spread."
This coincides with my notion that the worst part of this sell-off is attributable to the credit crisis and that it has already overshot a recessionary sell-off.
404 Not Found
Martial Law Plans Revealed?
It's becoming increasingly obvious that plans for declaring and implementing martial law are nearing finality. Listen as Representative John Haller can hardly believe what he's reading especially when it gets to the part on the new Bill of Rights.
Should a senior manager at a public company be telling anyone that his company has just received loan commitments from two major lenders for an acquisition?
--
CR has become the market mover -- the Scam Market takes its cue from CR's Progress Report.
Jas
Martial Law Plans Revealed?
It's becoming increasingly obvious that plans for declaring and implementing martial law are nearing finality. Listen as Representative John Haller can hardly believe what he's reading especially when it gets to the part on the new Bill of Rights.
FFDIC | 10.27.08 - 12:31 pm
Gotta love The Onio
@ FFDIC - it's from The Onion = Satire.
CR has become the market mover -- the Scam Market takes its cue from CR's Progress Report.
Correlation, causation, they're all the same.
FFDIC, that O(nion)-Span has always got me full of fearful laughter...
"Their unearthly size and strength" was the big tip-off I think.
So anyone know why the rest of the world continues to tank?
5 Trillion dollars of yen induced bubbles deflating around the world...
- NY Times
15 Additional Banks Plan to Seek U.S. Aid
The additional 14 banks that have announced they will use the government funds includes: PNC Financial Services Group, $7.7 billion; the Capital One Financial Corporation, $3.55 billion; the Regions Financial Corporation, $3.5 billion; SunTrust Banks, $3.5 billion; Fifth Third Bancorp, $3.4 billion; KeyCorp, $2.5 billion; Comerica, $2.25 billion; the State Street Corporation, $2.0 billion; the Northern Trust Corporation, $1.5 billion; Huntington Bancshares, $1.4 billion; the First Horizon National Corporation, $866 million; the City National Corporation, $395 million; Valley National Bancorp, $330 million; Washington Federal, $200 million; and First Niagara Financial Group, $186 million.
FFDIC, looking at that list, which I thought they were gonna release slowly and carefully, does that mean we start shorting any bank on the plan or off the plan?
Anonymous writes:
FFDIC, looking at that list, which I thought they were gonna release slowly and carefully, does that mean we start shorting any bank on the plan or off the plan?
Answer - Yes.
Cal-thanks.
Progress? Looks more like now the Fed is becoming the lender of only resort. There just isnt enough firepower to win this battle in the end.
Cal: everything red except the dow...amazing.
Anonymous | 10.27.08 - 12:37 pm | #
Sheila Bair claimed 98% of U.S. banks were well capitalized so there is your answer while we await the FDIC's next false problem bank list. Short!
CR,
What is the meaning of a company being 'public' when it is not publicly traded?
Thanks.
anon - look again spx is green, and just in my holdings so are abt whr t and tgt
"Cal: everything red except the dow...amazing."
It's almost comical at this point. But gotta keep up appearances for a while, no?
This is what I've been worrying about.
Farm-Credit Squeeze May Cut Crops, Spur Food Crisis (Update1) - Bloomberg.com
comical indeed. Simply will not last.
More than $12 trillion has been erased from the market value of equities so far this month, accounting for about one- third of the total value wiped off stocks this year, as $680 billion of writedowns and losses by banks triggered a freeze in credit markets.
European Stocks Decline; SocGen, Postbank, DSM Lead Retreat - Bloomberg.com
When Bush signed the bill Oct. 3, the New York Stock Exchange (NYSE) Composite Index was valued at $14.3 trillion, closing at 7,088 points. The Composite Index, unlike the Dow Jones Index, is a look at how all stocks in the market are faring.
Over the last 14 trading days, the market has lost 1,417 points, worth nearly $2.9 trillion in value--roughly $214 billion per day. As of Thursday, Oct. 23, the market had fallen to 5,671 points, worth $11.4 trillion. By the close of the market on Friday, the index had fallen another 244 points, to 5,427--with the new estimate of total value not yet available.
The TAIEX has lost 24 percent this month as part of a rout that has wiped US$11 trillion in value from global stock markets and prompted governments across the world to introduce measures to limit declines.
Credit is flowin in the wind. Who needs more credit?
"The duration of the world recession will be as damaging to world markets as its depth. In the industrialized world, it is likely to drag on well into 2009," wrote Peter Dixon, from Commerzbank in London, in an analysis note.
"The G7 statement has increased the chance of early coordinated rate cuts this week," said Hans Redeker, global head of FX strategy at BNP Paribas.
Count down to Christmas
58 sleeps, 15 hours, 10 minutes & 30 seconds
http://www.emailsanta.com/clock.htm
CR - I understand what you are saying, that this particular deal is a good one, but if it was that good, why does it take taxpayer money to do it, instead of the banks' own money?
"Prol Geoff writes:
Progress? Looks more like now the Fed is becoming the lender of only resort. There just isnt enough firepower to win this battle in the end."
Well, the $700MM is meant to recapitalize the Fed first.
Maybe because the banks don't have any of their own anymore ????
You may find the following URLs interesting...
Possible inflationary effects of Fed actions:
The Federal Reserve Is Inflating at 341% per Annum. (Dont Look for the Decimal Point.)
Potential European Currency Crisis due to Emerging Markets:
Europe on the brink of currency crisis meltdown
- Telegraph
There is really no credit crunch yet for good borrowers. There is a slight moderation in credit availability from what we are used to to riskier borrowers/projects.
Not sure why this is a bad thing.
Calpers Sells Stock Amid Rout to Raise Cash for Obligations - WSJ.com
Calpers forced to sell equities for liquidity...
Mr. T - That's kind of my point actually
Evidence that currency volatility is more of a problem than the indicators CR lists...
InfoViewer: Market swings expose Chinese offshore derivatives trades
CCD...we agree. I am confused as to why gov't backed distortions in the credit markets are seen as "positive".
I'm not sure just exactly how you pro rate the facts that good borrowers are paying a generally fair price while people who shouldn't be borrowing are paying usurious rates with no intention of repayment. Seems to me the "cost" to the consumer of credit is low in both cases in aggregate. There's a reason Casey Serin didn't care about the terms of any of his loans. It was ultimately very cheap credit to him.
Why is the DOW going up when the rest of the world is going down?
This seems absurd...Something strange is going on...
world implodes....US market up!
ya gotta love it.
GM Said to Seek Treasury Aid in Chrysler Merger Talks (Update6) - Bloomberg.com
'GM executives have asked Treasury to consider taking a stake in the Detroit-based company, said one of the people, though the government is reluctant to do so.
Looks like the fundamental bots are outnumbering the momo bots.
We finish green, folks.
This is what I've been worrying about.
Another reason I love/hate Jim Rogers. A couple of months ago, he doubled down on agriculture for the long run. In an interview, he said that most of farmers were old and that the laid-off stockbrokers needed to learn how to drive a tractor.
Mentalic:
Why is the DOW going up when the rest of the world is going down?
This seems absurd...Something strange is going on...
Answer:
The next phase of the crisis moves offshore...
Europe on the brink of currency crisis meltdown
- Telegraph
N.B.: The imminent catastrophe predicted by Denninger last week has failed to occur.
OT: Stuck in the car on Thursday and was listening to news radio.
The top of the hour national news highlights were (in this sequence):
1) The new number of foreclosures reached an all-time high and the Treasury and FDIC will mitigate mortgage losses using the $700B bailout package;
2) Mortgage rates are lower than last week, so if you're looking to buy, now is a good chance.
So even with the very serious bad news about foreclosures skyrocketing and the economy getting soft, by all means let's get back to real estate speculating because interest rates are low.
There's still no fear in the market. Too many folks are worried about missing the next rally (real estate, stocks, commodities, whatever).
Until there is fear and the 'born and bread' dopes get it, or the government makes an unexpected and huge mistake, I don't see a lot more downside (especially as the credit indicators improve).
Mentalic writes:
Why is the DOW going up when the rest of the world is going down?
This seems absurd...Something strange is going on...
Oversold. Panic and forced selling. Strengthening $ pulling foreign investors. DOW will hit 10-11k then process starts over again.
I guess the world figures the U.S. is going to be the last piece of the world financial system to fail.
Like sailors on a sinking ship clamboring for position on the highest mast.
Then again...I don't think fundamentals are driving the truck at this point. These moves are more a result of de-leveraging and such.
Mentalic writes:
Why is the DOW going up when the rest of the world is going down?
This seems absurd...Something strange is going on...
Answer:
You've got to climb up to the (small) peak before we jump off the cliff...
"In the past month, Japan's currency has increased 14 percent against the dollar, 34 percent versus the euro, 55 percent versus the Australian dollar and 44 percent against the New Zealand dollar on speculation investors will unwind carry trades, in which they get loans in countries with low borrowing costs and seek higher returns elsewhere."
Yen Rises on Bets Carry Trade to Evaporate on Economic Turmoil - Bloomberg.com
I think we've only seen a small fraction of the consequences...
US market stability in the teeth of a global revaluing: Don't forget that it is only six weeks or so set the end of year portfolio. Think of it as window shopping in anticipation of window dressing.
Oversold. Panic and forced selling. Strengthening $ pulling foreign investors. DOW will hit 10-11k then process starts over again.
Anonymous | 10.27.08 - 1:07 pm
I think you overestimate how quickly people will take profits out of an upswing in the market.
er underestimate /me shoots typist
Brontide,
I don't think folks will take profits that fast - there is no resistance overhead.
FFDIC writes:
http://www.stockmarketimplode.co...s- revealed.html
Martial Law Plans Revealed?
It's becoming increasingly obvious that plans for declaring and implementing martial law are nearing finality. Listen as Representative John Haller can hardly believe what he's reading especially when it gets to the part on the new Bill of Rights.
FFDIC | 10.27.08 - 12:31 pm | #
just a spoof, put out by the Onion. Running all over the internet. Even Ron Paul has no info on its validity.
Proposed (Classified) Bill Will Defend Against Flesh-Eating ...
Rep. John Haller (R-PA) introduces a bill that will allocate (classified) dollars over the next (classified) years to fight flesh-eating (classified).
Proposed (Classified) Bill Will Defend Against Flesh-Eating (Classified) | The Onion - America's Finest News Source - 21k - Cached - Similar pages
It's only perception..The US has
always had other Countries in a fog..
Jas Where are you on this?
3-month T-bill yield is down to 0.76
That is about where the target FF rate is, and would be considered good news ... if it sticks.
a: that flowing data map is the coolest thing ever. Well maybe not "ever," but it's mesmerizing.
Watching the Growth of Walmart Across America | FlowingData
Friardaddy - you really cant create the fear you are talking about when it comes to housing markets. Some of us realized long ago that buying (in most markets) was absurd. Some people will take years, and possibly over a decade to figure it out, because it happens too slowly. It's like looking in a mirror...you are aging every day, yet each day you look at yourself, you seem to look the same as you always looked. But take snapshots of now vs 10 years ago, and you'd be shocked. It's the same with housing..each day the drip of water torture is so amorphous and intangible to most people, that they cant realize how they are slowly losing out. There will be suckers along the way, but the later they buy in, the less their losses, and they'll be able to rationalize it away. No way to ever really get the full capitulation we seek, or so it seems now. Maybe in a few years I'll think differently. But I still encounter far too many people who completely dont get it.
No, it may go up a bit, 9000-9500, but you aint gonna see 11,000.
throw ta in the garbage, never before has there been a crisis of this magnitude with the level of global govmy interventions to prop stock markets.
The last rally was exceedingly short and weak. No followthru. we are seeing lower highs. if it rallys , I expect it to be quite weak, as global currecy problem continue to exascerbate. Shorts wont be rattled out easy because the retracement was pretty slow.I expect it to break to downside, question is when.
Why is the DOW going up when the rest of the world is going down?
Because the rest of the world is requiring the banks that receive government funds to put that money to productive use, but our treasury finance program bypasses business activity and allows the funds to pass directly to shareholders via dividends and LBOs?
bah, belay the comment about T-bill yield, it's going the wrong way.
/me shoots brai
Another reason I love/hate Jim Rogers. A couple of months ago, he doubled down on agriculture for the long run. In an interview, he said that most of farmers were old and that the laid-off stockbrokers needed to learn how to drive a tractor.
Now there's an idea for reeducation-through-labor camps in the countryside.
Anonymous writes:
"What is the meaning of a company being 'public' when it is not publicly traded?"
In my world it means they are out of compliance with the '34 Act and trading by appointment in the Pinks or grey market.
We're going way higher today: 4-5% on the major indices.
Another reason I love/hate Jim Rogers
I don't trust guys that wear bow ties. They're hiding something
This just in.
Breaking News: Gerald Ford proclaims "mission accomplished" in his effort to "Whip Inflation Now".. err. soon... eventually.
In other news Generalisimo Franco is struggling valiantly...
I'm starting to wonder if we might not see full-blown capitulation in stocks this time. There are just too many vultures hovering, and too much talk about how smart it is to buy at the bottom and how the markets are at historical lows, blah blah blah. The indexes will be ground down some more, but the bottom will be indistinct and higher than expected - and thus the rebound weak.
But my timing is always about 2 years early (I thought tech stocks were unsustainable in 1997 and I sold my house in DC in 2005) so shorts might want to load up again.
DJI +1.5%
SPX +0.8%
NYSE -0.5%
One of these things is not like the other...
PeakVT,
Let me guess that you weren't old enough and/or exposed to people trying to invest circa 1970-1980. Vultures are betting, not investing. There won't be many winning bets for a decade.
One of these things is not like the other...
Flight to safe... uh, government guarantees.
Copper up 6%
--
"t's only perception..The US has
always had other Countries in a fog.. Jas Where are you on this?"
mainstreetamerica,
Lest we forget, or wish to remain in denial, US IS a global empire. US uses other countries the same ways as many successful empires have done for millennia. No, America is NOT more enlightened than the past empires. It is currently (past decade or so) a DESPOTIC EMPIRE!
The collapse of the American Empire is now in sight -- within 25 years. And with it the dysfunctional democracies around the globe.
Jas
Anonymous writes:
Copper up 6%
aka down only 50% since August. Do not mistake gyration for trend.
Jas Jain writes:
The collapse of the American Empire is now in sight -- within 25 years. And with it the dysfunctional democracies around the globe.
meh. we're not really done until one of our legions has their standards captured. plus, there's the whole tetrarchy thing to go through...
i give us another 50 years before we get a good sacking. not that there will be anything left but dixie cups and congealed coca-cola...
. Do not mistake gyration for trend.
My gf said the same thing to me last night
FFDIC writes:
Martial Law Plans Revealed?
It is a spoof! No Representative John Haller exists
DOW SPY rippin' and the IWM tripping on its dick.
My gf said the same thing to me last night
Anonymous
I know, she mentioned it this morning after you went off to work.
The next phase of the crisis moves offshore...
Remember 1997? The problem is that an offshore crisis in todays financially interconnected world is just as much an ONshore crisis. If any of those bigger European banks take a hit, it will be just another AIG, i.e. too big to fail no matter which side of the Atlantic or Pacific you are sitting on. Borders hardly matter anymore.
RE:
I agree completely.
one of the problems with this interconnectivity is the... uh... interconnectivity.
So a British Bank may fail because it bet wrong on Vietnamese Bonds. As it fails it may pull down American Banks.
So the American Taxpayer is therefore liable for Vietnamese bonds???
I know people scream about the evils of protectionism... but I'm not sure that this multinational finance Ponzi scheme is workable either.
Rob Dawg writes:
My gf said the same thing to me last night
Anonymous
I know, she mentioned it this morning after you went off to work.
She didn't brush her teeth after I left. How did I taste?
Apparently, credit has dried up IN BRAZIL.
Processors usually cover half the financing needs of farmers by accepting part of the future crop as payment. No one is doing it,'' Dahe said.It's stopped.''
But if you read the article quickly, it sounds like credit is drying up in the US. The fact is, there's plenty of credit for people with good credit history. Not so much for people with bad credit.
Inconceivable!
I know, she mentioned it this morning after you went off to work.
Rob Dawg | Homepage | 10.27.08 - 1:42 pm
Funny, your mom seems to think you've been in the basement watching start trek all night.
DJI +1.5%
SPX +0.8%
NYSE -0.5%
Are you implying shenanigans?
Remember 1997? The problem is that an offshore crisis in todays financially interconnected world is just as much an ONshore crisis.
Agreed a huge portion of profits for US firms are also tied up in Europe.
However, It will take some time for this to sink in for Joe and Jane 401k owner, and for our markets to adjust to what has happened oversees. Thus they are dropping today while we are going up...
The problem is that an offshore crisis in todays financially interconnected world is just as much an ONshore crisis.
Hey, but the value of my house has gone up 50% versus the Australian dollar in the past 2 weeks...
New thread.
Apparently, credit has dried up IN BRAZIL.
If Brazil and Argentina cut back significantly on their food production or even just their exports, world food prices will rise dramatically. Not a fun prospect.
Thanks to virtually unlimited acreage, ideal weather conditions and advanced technology, Brazilian farmers are also No. 1 in exports of beef, coffee and orange juice, and are quickly climbing the charts on other commodities, such as soybeans.
"Are you implying shenanigans?"
Not exactly calling shenanigans. But this "rally" on light (and dwindling) volume and that seems to be inordinately focused on the big boys is not terribly impressive IMO.
Agreed a huge portion of profits for US firms are also tied up in Europe.
I am much more concerned about CDS and other derivative issues than profits at this time. Profits from overseas operations at this point are incidental and with dramatically falling exchange rates they might even be illusionary.
I don't think that stock markets at this points are driven by fundamentals nor should they be. IMO it's impossible to project earnings forward in this environment.
The gov't is the only lender today! Mortgage lending is totally dependent on Federal backing and add the CP and other related financial lending outlets. Nothing about the credit markets is healthy, its like lending 100K to your brother-law for a down payment on a house and suddenly they are taking European vacations, shopping at Rodeo Dr. while going into foreclosure.
Something stinks with this "rally" big gains in the indexes, low volume, and a loss on the broader markets. But it's not like there is some huge 500% mover either, pretty tame day actually.
so WTF?
I think we're setting up for an elevator ride to a new low on the broader indices. A drop to something under 5200 on the NYA and/or 1500 on the COMP with less conviction than on last week's dives (Tu close into W open and W into close and Th before the 2:30 rally) and I'm going to start cashing out some shorts.
Most of the deals I work on are financed by European banks.
What should have been around 20-30 banks interested about 5 months ago, we only have 5-6 with the ability to fund.
It's not getting any better out there.
As far as credit drying up - I say bunk!
I get at least a half dozen unsolicited credit offers per week. No joke.
Here's the gig. Credit IS available, but only to credit worthy borrowers. In the more rational world, credit markets HAVE returned to normal.
safe_as_apartments writes:
We're going way higher today: 4-5% on the major indices.
safe_as_apartments | 10.27.08 - 1:26 pm | #
Yeah, bank on it (snicker)
I came across this fantastic webfil called Crisis in the Credit System by Melanie Gilligan...please check it out.
Crisis in the Credit System