With China down approx 69%..Fear and gloom in the markets..Jim Rogers being the biggest China Bull on Earth…. Do you think at a minimum the Chinese stock market can bounce… Is this a low risk trade? Is this a value trade?
Many times Cheap can get cheaper?
What do you think?
capitalinvestor1836.blogspot.com
With commodity prices imploding…Does this mean inflation is over… is the bigger evil Deflation?? In the Depression of the 1930s this was one of the major problems…What is interesting is the Asian economies in 1998 experienced tremendous Deflation ( Debt Deflation) which lead to MASSIVE Inflation…More so with the printing presses running in the US and the rest of the world..what effect will that have?
Where do you think we are headed??
Surging mortgage foreclosures will probably hurt banks even after the U.S. Treasury bolsters their capital.
So does that mean the money is going down the drain?
In the depression one of the steps the govt did was buy mortgages from the banks …lowered the interest rates…and kept people in their houses…1,000 foreclosures a day where happening …
What is so wrong in trying this approach… instead of throwing money at banks..and hope they will lend it??
What do you think?
capitalinvestor1836.blogspot.com
Investors around the world, in preceding years, had enjoyed above-historical average returns on both asset classes, continued reaching for ever higher gains, and the financial services industry created a variety of complicated products to meet this demand. They demanded high returns without regard to risk. How many of you remember the 20% years in the mid 1990s.. It became expected/demanded to continue..
Regulators and investors alike showed a growing complacency toward risk. And these factors blended together into a dangerous cocktail of underlying conditions that were ripe for instability. This is why we are where we are at this point, except for the fact instead of Greed.. we have Fear…
There are enormous challenge facing federal officials charged with finding solutions and much pain to come… but with this we must remember there will be tremendous oppurtunities…in stocks.. distressed debt..real estate…With that said..we must be careful and not catch the proverbial falling knife…
I would like to hear ideas… on how to make money after the carnage stops…
What do you think?
capitalinvestor1836.blogspot.com
We have yet to see the full effects of the crisis on the real economy, main street. We are past speaking about recession, too many are speaking about “DEPRESSION”. Why should that surprise us when banks are failing. Too many people think this will be over in 1 year. All one has to do is look at Japan. Japan’s banking crisis, for example, proved to be much worse than expected partly because the assets upon which so many loans had been based – notably land – kept falling in value. Sound similiar to the US version…housing..At the last count, Japanese land prices have been falling for more than 15 consecutive years. The stock market was at 39,000 in 1989 and this morning in the low 8,000 range.
No one knows how to measure the extent to which this crisis will impede economic growth. Too many of us know first hand…the banks are not lending.. nor are credit card companies extending credit like they used to. What is happening is that there is a higher cost of credit if you can even get credit.
This kind of credit collapse happened at the beginning of the 1930s as well as in the banking crisis of 1907. The loan-to-deposit ratio of the Amer-ican banking system dropped from 85 per cent to around 60 per cent. As it did so, many businesses and households found themselves driven into bankruptcy, not because they’d done anything bad or foolhardy but because massive de-leverage in the banking system left them unable to get hold of the credit needed simply to keep their activities ticking over on a daily basis. History is starting to repeat itself once again…sadly to say…
How many of thought the lessons from the Depression had been learnt and that, today, it would be impossible to live through another great depression. Some pundits are still saying that the chances of such an event are still small. However all one has to do is look at the commonality …and it is scary.
The worlds governments are attempting bailout after bailout. Shouldn’t they have been at the forefront to avoid the very basic cause of the problem… Cheap Money…and lack of regulation???
What do you think
Andrew Abraham
capitalinvestor1836.blogspot.com
Several weeks ago we spoke about Buffett buying GS and GE…many thought that he might be following in the footsteps of Ben Graham…In reality…eventhought the stock market has been pounded this week… it is NOT CHEAP…Cheap is like in the late 1970s or early 1980s…single digit PEs…selling below book value… Dividend yields mid single digits…
What do you think? Cheap can get cheaper…as well I could be totally wrong and we are in the biggest rally this year.. what do you think..?
Come join the chats on Myinvestorsplace.com …what do you think???
Derivatives traders were yesterday nervously picking their way through the wreckage of the Lehman Brothers bankruptcy in what was the biggest test to date of the unregulated $60 trillion (£35.4 trillion) credit default swaps market.
Investors who had placed bets on Lehman’s creditworthiness held an auction aimed at clarifying who owes what to whom after the investment bank went bust four weeks ago, and analysts believe that several hundreds of billions of dollars will change hands.
The auction set a price for Lehman bonds of 8.625 cents on the dollar. Financial firms that sold credit default swaps, therefore, owe 91.375 cents on the dollar – more than Wall Street had been factoring in. That figure increased nerves about whether everyone in the chain will actually be able to pay the amount that they owe, something that will become clear over the coming days. Participants said the auction went smoothly and efficiently.
How can a firesale be considered smooth and efficient? What do you think about this disaster in the making?
What will be the repercussions?
Let us know what you think… join the discussions on www.myinvestorsplace.com
1.Fact one Derivatives are roughly 10 times the value of the entire world’s output:
2.Derivatives operate outside of the grasp of governments, tax inspectors and regulators.
3.The domino effect which could be so enormous and scary
4. It is also impossible to establish their worth
5.Warren Buffett, the billionaire who made his money the old-fashioned way, called them “weapons of mass destruction.
What do you think??? What do you think we should do?
What suggestions do you have for this mess?
Please join our discussions on
Are Short Sellers to Blame for the Financial Crisis?
I have heard this question asked repeatedly… I find it an insult to ones intelligence to even state this.. There has to be a scape goat… Did the short sellers make the banks give loans to speculators that were not going to live in the houses.. Did the short sellers make the banks give loans to homeowners who neither had a job or credit? Did the short sellers make the banks give companies loan to buy other companies at over valued multiples with the hope of these overvalued companies to the next guy…
It is one thing to spread false rumours … which all know is wrong… but what is wrong about doing deep due diligence on a company…determining that their fundamentals are not in order…and taking a short position..? It is the same analysis one would do when buy stock in a company…
Short sellers borrow stock and sell it, essentially betting that the price of their target company will fall before they have to replace the borrowed shares. Now these investors are considered vultures, rumor mongers, cheats and criminals. Most have done nothing wrong but expose one of the largest frauds in our lifetime.
Bear Sterns and Lehman died because they were undercapitalized and made terrible leverage bets. Merrill’s own mismanagement was the cause of it’s demise. AIG is imploding due to it’s credit swaps and unregulated derivatives.
The Securities and Exchange Commission halted short selling of financial companies and Futures on the Standard & Poor’s 500 Index surged 2.9 percent following the announcement. U.S. equities staged the biggest rally in six years yesterday after the SEC stiffened other regulations aimed at curbing manipulative trading. The SEC said today that it will halt short selling of U.S. banks, insurance companies and securities firms through Oct. 2, while the Financial Services Authority in the U.K. banned short sales of financial shares for the rest of the year. How is this a free market???
Are markets only suppose to go…and when they fall… smart investors are not allowed to benefit.. Are we suppose to just lose money…and have the Govt bail us out???
Jim Chanos a great investor who first raised questions about Enron stated so perfectly
“We seem to have capitalism on the upside and socialism on the downside,”
That’s a pretty heady brew for country that holds itself out as a free market paragon.”
Nothing changes …short sellers were also victimized in 1929
Andrew Abraham
www. Myinvestorsplace.com
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