Meltdown!

Discussion in 'Business & Lifestyle' started by Sinister, Sep 17, 2008.


  1. Sinister

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    :8-:)Financial meltdown is underway :8-:)

    thoughts? anticipations? oppurtunities?

    with;
    Bear Sterns
    Lehman
    Fannie
    Freddie
    Washington Mutual

    all down the drain!


    Do you guys think American international Group (AIG) will tank?

    the implications of such a large insurance company going under is dier, the scar would loom on the market for a long time and would create an absolute mess.

    will government step in to finance their debt? perhaps a foriegn government if not the US?

    scary times...hold your breath for to long and you'll die of asphyxiation

    cheers
     
  2. pk70

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    the implications of such a large insurance company going under is dier, the scar would loom on the market for a long time and would create an absolute mess.

    will government step in to finance their debt? perhaps a foriegn government if not the US? ( quote Sinister Ji)

    Yes, it will be saved, as you are aware of it, AIG has 3 trillion dollars in assets and is a significant Giant of job provider, and its doom could be an unbearable impact on U.S economy and all other related to it. So, you bet, the Govt. will support it. Fed has decided not to cut interest rates (even a quarter) obviously is a hint of another possible fear of inflation too. With a limited knowledge on all this, I feel U.S. will remain in recession for some time to come but will survive as many other players in this game would not like to go in to drain especially China etc. What will happen to India in this context?
     
  3. Sinister

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    well, it got saved...just took $85 billion from tax payers...but its core business is safe. but, i think the shareholders are still going to take a beating...the Fed is getting 80% control of AIG (basically a takeover)...shareholders are going to get burnt in tomorrows trading session ...as of tomorrow they will only hold 20% of the company assets. (still better than 0% however)

    to anyone still holding this stock ...two words...DUMP IT! :down:


    pk70,
    I think its a good decision fed didnt cut rates...I think it would have created a panic sell scenario (would have made the central bank look desparate)

    It's simple ...If america slows-down...other countries get hammered as well. Especially emerging markets that cater to north america... India and China (we have already seen china lose huge amounts of value in the SSE index...major corrections)

    and its not just America that is in trouble ...All of Western Europe has the hickups as well. The British housing sector is incredibly soft.

    one reliable sign of global slowdown is the recent correction in commodities ... we got oil hovering at 92-95$ from the year high at $140 (something i was predicting would happen:ice:)... I think we will be seeing significant decreases in demand for almost all resources, oil, food, coal, metals...all indicators point that this is going to be a global event.

    how long?
    i'd give it another year and a half to settle down, American markets can only pick up once the liquidity situation improves and all this ambiguity/jitters are put to rest.

    good time to be shorting oil
    or going long on natural gas (which gets interesting day by day:ice:).

    are you familiar with the anti-gurmat saying: "get rich or die trying"?:D

    Godspeed pk70 Godspeed!
     
  4. pk70

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    I think its a good decision fed didnt cut rates...I think it would have created a panic sell scenario (would have made the central bank look desparate)(quote sinister ji)
    You are right Sinister ji, Fed didn’t cut interest rate due to panic reaction, look what has happened on Market after AIG bail out, had Fed did it, it could have been worse.
    Go for Gold only! It is possible; it can hit $ 900 level. We are passing through “certainties of uncertainties!” With in 18 months or so, it would bounce back to recovery, how much, it is still uncertain…..
    one reliable sign of global slowdown is the recent correction in commodities ... we got oil hovering at 92-95$ from the year high at $140 (something i was predicting would happen[​IMG])... I think we will be seeing significant decreases in demand for almost all resources, oil, food, coal, metals...all indicators point that this is going to be a global event.
    I concur. Actually Real Estate was abnormally inflated compared to any commodity (except oil) so it is also playing role in this melt down. I wonder why there is no correction in Indian Real Estate because that inflated by breaking economics rules. It stopped going up but still it is far from getting corrected (may be the black money is at its back); however, the Indian stock market got corrected.
     
  5. Sinister

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    OMG ... did you see what happened to Russia's "emerging market" today?...it got HAMMERED! no market is immune to this!

    Good Call...im bullish on gold now Look at what its doing today!...INSANE, it could go well past 900

    i am tracking gold with USG...i nibbled in today and was thinking of day trading it and selling before the session closed ...but after this enormous rally I think it would be silly to sell... ill be holding for a little longer...until the certainty of uncertainty subsides :p

    hmmm...Indian real-estate?...dont know how its going to hold up with all this but chances are that it will soften as well (i think it has softened since the Akali's took power) (Akali=bad economics, period). Punjab still looks lucrative for NRI's but my confidence in investing is rather weak. Foreign investment confidence is a term you rarely hear in Punjab... buying property is a jittery process for any NRI (my father has had some bad experiences in the past). Lots of Red tape and lots of property crime. Granted the returns are lucrative.

    I'm not tough enough... to invest into something like that.

    cheers

    aside: what do you think of financial ETF's? xlf, uyg? they sure look nice and ripe for picking...not to mention they are safer than investing in a single banking institution during these uncertain times.
    xlf ~ $18.50 (10 year low)
    uyg~ $16.50 (52 week low)

    i think these could easily double your money in 5 years and xlf is giving a nice 3% dividend yield. :ice:

    saddle up ...this is going to be a crazy slowdown.
     
  6. pk70

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    aside: what do you think of financial ETF's? xlf, uyg? they sure look nice and ripe for picking...not to mention they are safer than investing in a single banking institution during these uncertain times.
    xlf ~ $18.50 (10 year low)
    uyg~ $16.50 (52 week low)( quote Sininster ji)


    Not a bad idea but is it the right time? Or should Waite for a little more shaking because time being, financial area is very fragile as all are so correlated to this mess. Some say Google, IBM, Yahoo will rebound, but it appears not. This is the time to watch very carefully. Diversified products are the only a good bet now. I am aware you are doing a lot of research on it. Fidelity is recommending TX, COP. I just cannot believe them either. So be careful
     
  7. Sinister

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    UYG just went to $22 today... up $5.50 in 2 days! :D

    XLF is at $22 :ice: up from 18.00

    ughhh....if only i had bought more (i always buy in increments to cut back on the risk)...i was able keep my 'greed factor' under control...::cool::...and it cost me short term)...oh well, souldnt be complaining about trivial things...rules are rules when it comes to disciplined investing.

    im not getting too excited or cocky... i think these are just short term gains...we might see another crunch....perhaps another buying oppurtunity. keep eyes open at all times

    Another ETF play i like .... UNG (united states natural gas fund)
    with natural gas corrected at 7.85 per 1k cf
    this security is trading at $34.48 ... it can easily hit $45+ if old man winter does his thing and natural gas goes to $12+ per 1k cf

    im planning/willing to chase this etf all the way down to the 30.00 dollar range....its totally worth it and i dont see much downside right now...cant go wrong (people always need natural gas)

    its a toss up between this and PDS (precision drilling)...great company that specializes in drilling (also tied to natural gas) its yielding quite a bit and is at it low end.

    so much to buy...so little money :(

    i feel like i only have one foot on the train and the conductor is yelling ALLL ABOARDD!!!!
     
  8. pk70

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    Another ETF play i like .... UNG (united states natural gas fund)
    with natural gas corrected at 7.85 per 1k cf
    this security is trading at $34.48 ... it can easily hit $45+ if old man winter does his thing and natural gas goes to $12+ per 1k cf

    im planning/willing to chase this etf all the way down to the 30.00 dollar range....its totally worth it and i dont see much downside right now...cant go wrong (people always need natural gas)

    its a toss up between this and PDS (precision drilling)...great company that specializes in drilling (also tied to natural gas) its yielding quite a bit and is at it low end.

    so much to buy...so little money :(

    i feel like i only have one foot on the train and the conductor is yelling ALLL ABOARDD!!!!


    Another ETF play i like .... UNG (united states natural gas fund)
    with natural gas corrected at 7.85 per 1k cf
    this security is trading at $34.48 ... it can easily hit $45+ if old man winter does his thing and natural gas goes to $12+ per 1k cf

    im planning/willing to chase this etf all the way down to the 30.00 dollar range....its totally worth it and i dont see much downside right now...cant go wrong (people always need natural gas)

    its a toss up between this and PDS (precision drilling)...great company that specializes in drilling (also tied to natural gas) its yielding quite a bit and is at it low end.

    so much to buy...so little money :(

    i feel like i only have one foot on the train and the conductor is yelling ALLL ABOARDD!!!! (quote Sinister ji)
    Some of your ideas were right on the money! Were excellent for grumpy investors !
    Some programs of Money market portfolios are backed with guarantee from the Fed with borrowed money most likely from China. That is good one. I am almost out of this game. My preferences are changed. You are definitely on it regardless how much money power is at your command, and you will do good. Wish you the best.:happy:
     
  9. spnadmin

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    Natural gas is going to become very important -- the oil crisis is not going to get better. T. Boone Pickens is spearheading a project -- you see him on cable all the time with an extensive ad -- promoting alternative sources of energy in the US. And natural gas is on the top of his list as an under utilized resource. There is a lot of it and re-engineering vehicles to make use of it will take the creative imagination and leadership that we are not seeing a lot of right now.

    BTW -- I think meltdown is right. Slowdown -- no. We are now facing a complete, drastic, structural, and probably traumatic, transformation of several financial sectors of the economy in the United States. It is going to cause social and economic upheaval not unlike that following the Industrial Revolution.

    And think about it -- the government is now more than a friend and major partner, but a part owner of major sectors of the economy: banks and insurance companies. This is called what ???? in political theory?

    Stay tuned for major disturbances in retirement funds, ******** markets, the small business sector. No credit -- no college loans, no ********s, no short term loans to small business who need cash flow. The auto industry is also going south right now. We are going to see widespread unemployment and distressed real estate markets. How can you sell property if buyers can't get loans. And loans are going to be in short supply because of what has happened to money market funds -- the once safe investment that was "too conservative."

    Note -- I am clueless as to why the word ******** is all asterisks. The word that is being automatically deleted is what you apply for when you want to buy a house.
     
  10. Sinister

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    Hello antonia ji,

    I was not thinking that long term :D...although what you stated does seem to be the future..probably in the next 10 to 15 years...natural gas vehicles are still long way off from mass production. Including the fact that mass distribution of the LNG will require tremendous shifts in infrastructure (everything from car factories, distribution outlets, expansion of existing pipelines)...and like you said...compounded with a tight liquidity market this kind of grand shift in infrastructure is unlikely to occur any time soon.

    I was thinking, for a short term safety net for investors during this crisis, we usually see natural gas prices spike in the winter with increased consumption by furnaces in homes. Also, the amount of LNG powerplants are also growing around the world...which will fuel healthy demand.

    the recent spike in commodities is not entirely coming from an increased demand scenario...but rather the outcome of a weaker US dollar.

    Inflation is getting unusually high and breached 5.0% mark...time to panic?

    why are key interest rates flat at 2.0%? wheres the fed?

    Fed is sitting on its hands and cant touch the dial until this credit crisis subsides....we could be looking at runaway inflation if the fed is not careful. Printing money has consequences and when you print a trillion dollars the middle class suffers and other profitable enterprises suffer. (except essential utilities)

    to protect yourself in this situation i advise retreating and diversifying in commodities like gold, silver, NGas, coal or uranium related securities. (uranium just had a major correction over the past year, its fundamentals also looking appealing to me)

    money to be made, money to be lost...pick a side :}{}{}:

    its disgusting!
    :}{}{}:...it'll catch up with the government eventually...we are seeing treasury bills losing value for the first time since the great depression. this is big. Socialism is the temporary answer to these overarching problems. GM's credit rating was dropped to triple C...they are next in line for a bailout. ... this has got to stop before it gets out of control.

    people have to lose their jobs at some point or another...accountability, responsibility and fiscal punishment for bad behaviour form the foundation of Capitalism...violate these and everything comes tumbling down.

    AIG, Fannie, Freddie, Bears....4 major bailouts
    now GM and Ford want their share
    Washington mutual teatering on the brink
    Meryll Lynch saved by BAC
    Citigroup in horrible shape

    sooner or later everyone that loses will be lining up at the governments door...dragging down whatever profitable sectors are left in the market.

    grim and scary situation...with an election around the corner...special interests could further do harm to already sensitive situation (brash and bold decision making may hurt us) ...time to pray

    cheers
     
  11. spnadmin

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    Gulp! and Yeh!
     
  12. Sinister

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    :8-:):8-:):8-:)THIS IS A REAL BIG MESS!!!!! :8-:):8-:):8-:)

    SO! We had the Fed drop interest rates today and what do we get? ANOTHER MAJOR SELL-OFF!...not good news :shutup:

    where is the bottom on this thing? credit markets are still in horrendous shape even after a HUGE bailout!

    Despite all this bad news...I am getting a bit more confident. I think that this is going to turn around and the capitulation has mostly occured....opinions?

    cling to safe solid investments in times like this...things that you know cannot go under or wont lose most of their value. (but then again nothing is entirely "safe" in this type of environment)



    Funny post I found on finance.google:

    in Psychology/Sentiment


    CEO --Chief Embezzlement Officer.

    CFO-- Corporate Fraud Officer.

    BULL MARKET -- A random market movement causing an investor to mistake himself for a financial genius.

    BEAR MARKET -- A 6 to 18 month period when the kids get no
    allowance, the wife gets no jewelry, and the husband gets no sex.

    VALUE INVESTING -- The art of buying low and selling lower.

    P/E RATIO -- The percentage of investors wetting their pants as
    the market keeps crashing.

    BROKER -- What my broker has made me.

    STANDARD & POOR -- Your life in a nutshell.

    STOCK ANALYST -- Idiot who just downgraded your stock.

    STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally between themselves.

    FINANCIAL PLANNER -- A guy whose phone has been disconnected.

    MARKET CORRECTION -- The day after you buy stocks.

    CASH FLOW -- The movement your money makes as it disappears down the toilet.

    YAHOO -- What you yell after selling it to some poor sucker for
    $240 per share.

    WINDOWS -- What you jump out of when you're the sucker who bought YAHOO @ $240 per share.

    INSTITUTIONAL INVESTOR -- Past year investor who's now locked up in a nuthouse.

    PROFIT -- An archaic word no longer in use.

    :happy:
    c h e e r s
     
  13. spnadmin

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    Thanks for a few moments of humor and even a chuckle or two.
     
  14. pk70

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    Despite all this bad news...I am getting a bit more confident. I think that this is going to turn around and the capitulation has mostly occured....opinions?(quot sinister ji)

    As big building is shaken, a lot of stuff keeps falling apart, Time is a great healer, the building will be fixed if not in the same form but could be with a closer look. So during this shake up, enjoying the new meaning of the abbreviations as it sounds pretty nice and funny.:)
     
  15. Sinister

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    pk70 ji

    humour helps us get through the day diverting us temporarily from the realization of how royally screwed we are.:D

    c h e e r s
     
  16. Sinister

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  17. Sinister

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    Citigroup is being bear raided into the ground by shortsellers! :eek:
    It seems like there is going to be a run on this MAJOR bank...analysts underestimated the impact of the faulty CDO's and SIV's.

    Citigroup stock drops to 13-year low, fear grows | Reuters

    If Citigroup (C) tanks....it will be time for me to grow a long beard, move to the foothills of the himalayas to learn the sitar and other small melodious chime instruments....:8-:)

    no, seriously, this is going to be a depression if citi enters a phase of insolvency...we will see other major banks shrivel up like worms in a salt pit...and thats when all of us will say hello to shoelace soup. :ice:

    of coarse such a scenario will not occur because the US government will not let Citi go under...but this is the end of the Western Banking system as we know it. A complete nationalization of the majority of american financial institutions is likely to follow.

    Just to put this in perspective the National bank of Congo outperformed Citigroup this last quarter. (and there is a civil war and genocide underway in that country)...american financial institutions have become the most irresponsible, loony organizations ever demised...the so called "protestant ethic" (which Weber declared created the 'capitalist spirit' in the US) ...is entirely dead...the management that worked for these companies are at the same time the most greediest, dumbest and most evil people alive.

    These were the soundest institutions phanthomed just a few years back and they have been reduced to nothingness.
    [​IMG]
    B U M M E R


    the collapse of the american auto industry will just add to this gathering storm.
     
  18. spnadmin

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    Sinister ji

    Just one exception-- You probably won't see Bank of America go under. They were there to the rescue during the Depression as a privately held bank in San Francisco. Today their policies are so stringently conservative that they will probably make it.
     
  19. Sinister

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    Well there you have it....Citigroup closes and $4.71 down 26.41%today....its on fire..they need to suspend the shortselling and ramp it up with cash...the only good news is a Saudi Prince increased his stake in the company...and after that good news it fell like a rock.
    I hope there is more than one exception! lol...or else we are going to be in tremendous trouble.

    Comparing these banks to their performance 80 years ago during the depression should not be consolation of any sort. Even "honourable" and "conservative" insititutions like AIG, Fannie Mae, Lehman Brothers, Wachovia and Bear Sterns survived the Great Depression, only to go bankrupt now. These institutions are structured completely different in the 21st century and this crisis is very different from the great depression.

    Yes... BAC has been in good shape because of its conservative banking practices. It positioned itself with a low amount of collaterized debt obligations by limiting exposure to the housing sector and it has a tremendous amount of liquidity. But, it has been pounded this last month as well...it has lost 50% of its market cap in just the last month...right now its trading at a dispicable $11.25 (a 20 year low for this company). Maybe the Meryll Lynch (another bank that survived the great depression but not this collapse) takeover was a bad idea?

    If citigroup goes under, nothing is "safe" anymore. If you were to take the entire worlds money supply and come up with a number that is how much capital flows into and out of citi in a period of 72hours. The amount transactions going through this bank are phenomenal. The loss of this type of institution will send the market into unchartered waters.

    Look at Europe, conservative banks like Deutsche Bank, ING, RBS, Lyods groups, Barclays are in horrendous shape...much of them nationalized already...after shedding an excess of 50% of their market cap each.

    the U.S banking sector will never look the same, whatever banks do survive will be shackled by regulators, they will rebound very slowly, and they might get mopped up by emerging eastern banks or the Canadians!
    the parties over....lets wait and see who goes under first... the auto sector or citigroup.

    slow recovery (provided we find a bottom in this market)

    c h e e r s
     
  20. spnadmin

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    The situation with CitiBank is very worrisome. But the loss of value in BAC stock is a reflection of the market not the underlying value of BAC. In fact, BAC would be a bargain for anyone who is looking for a long term investment. Another bank/financial that is in relatively positive territory is Wells Fargo. So everything is not a disaster.

    Even Warren Buffet has lost money. Everyone has lost money. But individuals who have cash and want to place some of it at risk can find bargains right now and can limit their risks. The guiding principle should be -- find value. Which means buy or hold stocks in companies with sound balance sheets, limited debt, positive mid- to long-term trend lines on sales, sales-volume, profits, and price/earnings ratios. Investments right now should be about long-term strategy so that investors can take advantage of market price averaging.
     
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