TPS Posted October 10, 2008 Share Posted October 10, 2008 The world markets tanked last night and the futures are indicating another blood bath today. Articles/blogs I've been reading this week suggest much of the turmoil has been due to the anxiety over today's settlement of Lehman's cds contracts. One estimate shows the sellers of the insurance might have to payout $400 billion, and many of the sellers were banks. It's been argued that the reason the interbank loan market has frozen is due to 1) banks are hoarding their cash to meet their obligations; and 2) no one knows who the losers will be, and the losers might be taken down because of this. There are two scenarios: one, the settlement goes well, the obligations are less than expected, and no one is taken down--the markets would react positively; two, the opposite, and all hell breaks loose. I'm going to be at a bar with some scotch and beer as the market closes.... Link to comment Share on other sites More sharing options...
elegantelliotoffen Posted October 10, 2008 Share Posted October 10, 2008 The world markets tanked last night and the futures are indicating another blood bath today. Articles/blogs I've been reading this week suggest much of the turmoil has been due to the anxiety over today's settlement of Lehman's cds contracts. One estimate shows the sellers of the insurance might have to payout $400 billion, and many of the sellers were banks. It's been argued that the reason the interbank loan market has frozen is due to 1) banks are hoarding their cash to meet their obligations; and 2) no one knows who the losers will be, and the losers might be taken down because of this. There are two scenarios: one, the settlement goes well, the obligations are less than expected, and no one is taken down--the markets would react positively; two, the opposite, and all hell breaks loose. I'm going to be at a bar with some scotch and beer as the market closes.... But what about Bill Ayers? Link to comment Share on other sites More sharing options...
GG Posted October 10, 2008 Share Posted October 10, 2008 When all is said and done, it will be seen how monumentally foolish it was to let Lehman file Ch. 11 without taking preventative steps in the CDS market over six months since the Bear collapse. Link to comment Share on other sites More sharing options...
TPS Posted October 10, 2008 Author Share Posted October 10, 2008 When all is said and done, it will be seen how monumentally foolish it was to let Lehman file Ch. 11 without taking preventative steps in the CDS market over six months since the Bear collapse. As I said, Paulson should be keel-hauled, especially if he let his bias influence the decision. Link to comment Share on other sites More sharing options...
GG Posted October 10, 2008 Share Posted October 10, 2008 As I said, Paulson should be keel-hauled, especially if he let his bias influence the decision. Would you believe that I may agree with you on this? At first, I dismissed it as sour grapes by the Lehman guys, but now, I'm not so sure. The immediate impact of Lehman's filing was exactly my fear of letting Bear file in March. Instead of banning short selling, they needed to ban new CDS contracts on financials from March on. Link to comment Share on other sites More sharing options...
East Brady Posted October 10, 2008 Share Posted October 10, 2008 The link is a JFK video telling it like it is. Do you guy's see a banking shut down for next week???? The markets will be closed monday for the holiday and they like to pull their punches over the week ends. Link to comment Share on other sites More sharing options...
GG Posted October 10, 2008 Share Posted October 10, 2008 The link is a JFK video telling it like it is. Do you guy's see a banking shut down for next week???? The markets will be closed monday for the holiday and they like to pull their punches over the week ends. You can shut the stock market for a few days without serious effects. You cannot shut down banking without an ensuing major calamity. Link to comment Share on other sites More sharing options...
molson_golden2002 Posted October 10, 2008 Share Posted October 10, 2008 NEW YORK (AP) -- Wall Street extended its devastating losses Friday, but prices swung sharply as investors scooped up shares decimated by more than a week of intense and panicked selling. The Dow Jones industrials, down nearly 700 points in the opening minutes of trading, recovered to an advance of more than 100 before turning sharply lower again, and the other major indexes fluctuated sharply as well. http://biz.yahoo.com/ap/081010/wall_street.html Link to comment Share on other sites More sharing options...
DC Tom Posted October 10, 2008 Share Posted October 10, 2008 http://biz.yahoo.com/ap/081010/wall_street.html "Panicked" is the key word there. The market moves on greed and fear; whenever it takes either of those to excess, it's time to look at doing the opposite. Of course, the other rule that goes along with that is "Never try to catch a falling piano". Right now...the piano still looks like it's falling. Link to comment Share on other sites More sharing options...
meazza Posted October 10, 2008 Share Posted October 10, 2008 "Panicked" is the key word there. The market moves on greed and fear; whenever it takes either of those to excess, it's time to look at doing the opposite. Of course, the other rule that goes along with that is "Never try to catch a falling piano". Right now...the piano still looks like it's falling. Stephen Harper in a political debate (since hey there is an election in Canada on Tuesday) said that this is not such a bad market as many stocks will be cheap and worth buying for the long term. Although he is absolutely right, that is not something to say to the general public when they just lost a killing on the stock market and you're trying to get re-elected. Link to comment Share on other sites More sharing options...
taterhill Posted October 10, 2008 Share Posted October 10, 2008 Main Street America is doing what they do best...selling low and buying high Link to comment Share on other sites More sharing options...
DC Tom Posted October 10, 2008 Share Posted October 10, 2008 Stephen Harper in a political debate (since hey there is an election in Canada on Tuesday) said that this is not such a bad market as many stocks will be cheap and worth buying for the long term. Although he is absolutely right, that is not something to say to the general public when they just lost a killing on the stock market and you're trying to get re-elected. Fortunately, I've been all cash for three weeks. Had I not liquidated my positions, I'd be down about 35%. (Note: I'm not claiming to be a market timer. Just a bit lucky.) Right now, I'm looking buying the same stocks I just sold, since I like the long-term prospects of the companies...and maybe throw some financial stocks in to the mix (American Express, Capital One - which is showing some interesting strength right now, Wells Fargo) on the principle that if everyone's panic-selling the entire sector, there's got to be some good deals. I expect to do quite well in a 3-5 year time-frame. So personally...I'm happy. Link to comment Share on other sites More sharing options...
Chef Jim Posted October 10, 2008 Share Posted October 10, 2008 "Panicked" is the key word there. The market moves on greed and fear; whenever it takes either of those to excess, it's time to look at doing the opposite. Of course, the other rule that goes along with that is "Never try to catch a falling piano". Right now...the piano still looks like it's falling. Not only is it falling the fuggers on fire too. Link to comment Share on other sites More sharing options...
Chef Jim Posted October 10, 2008 Share Posted October 10, 2008 Fortunately, I've been all cash for three weeks. Had I not liquidated my positions, I'd be down about 35%. (Note: I'm not claiming to be a market timer. Just a bit lucky.) Right now, I'm looking buying the same stocks I just sold, since I like the long-term prospects of the companies...and maybe throw some financial stocks in to the mix (American Express, Capital One - which is showing some interesting strength right now, Wells Fargo) on the principle that if everyone's panic-selling the entire sector, there's got to be some good deals. I expect to do quite well in a 3-5 year time-frame. So personally...I'm happy. Watch the wash sale rule. Link to comment Share on other sites More sharing options...
DC Tom Posted October 10, 2008 Share Posted October 10, 2008 Watch the wash sale rule. I am aware. Link to comment Share on other sites More sharing options...
In-A-Gadda-Levitre Posted October 10, 2008 Share Posted October 10, 2008 Fortunately, I've been all cash for three weeks. Had I not liquidated my positions, I'd be down about 35%. (Note: I'm not claiming to be a market timer. Just a bit lucky.) Right now, I'm looking buying the same stocks I just sold, since I like the long-term prospects of the companies...and maybe throw some financial stocks in to the mix (American Express, Capital One - which is showing some interesting strength right now, Wells Fargo) on the principle that if everyone's panic-selling the entire sector, there's got to be some good deals. I expect to do quite well in a 3-5 year time-frame. So personally...I'm happy. how has Well's Mortgage sub done through all this? Link to comment Share on other sites More sharing options...
Chef Jim Posted October 10, 2008 Share Posted October 10, 2008 I am aware. I figured you were. Link to comment Share on other sites More sharing options...
DC Tom Posted October 10, 2008 Share Posted October 10, 2008 how has Well's Mortgage sub done through all this? From my wife, who works closely with their mortgage people: very well, comparatively. Wells didn't get nearly as deep into subprimes as other lenders, and has a greater tendency to hold the mortgages they write rather than sell or pool them for CMO's. Their mortgage people aren't hurting nearly as badly as at other companies, at the very least. In her office, for example, Bank of America is denying mortgages in more than half the closings she schedules (of high-end properties, with good credit and 20% or more down). Wells...not nearly as many. Don't know how the Wachovia acquisition will affect that, though. Between Wachovia's financial situation and potential lawsuits from Citi (they're tossing around numbers like "sixty billion dollars", which is nonsense. But still...), I don't know how that'll play out. Still...Wells is positioning themselves to be in a strong position after all this sorts out, in about 2-5 years. Link to comment Share on other sites More sharing options...
DC Tom Posted October 10, 2008 Share Posted October 10, 2008 I just watched half the Dow components go into the green, and the Dow pare 400 points in losses in ten minutes. Dow's now down - as I type - 130. And I'm sitting here thinking "Wow, only down 130. This is a good day." Link to comment Share on other sites More sharing options...
IDBillzFan Posted October 10, 2008 Share Posted October 10, 2008 What happens if the DOW stays up 175 today? Should I still panic or save some panic for tomorrow? Check that: Up 296. :lol: Check that: Only up 234. Check that: Now only up 177! PANIC! PANIC!! Check that: Only up 101. Heading toward the ledge... Check that: We're only up 5. PANIC AGAIN!!! OH CRAP! We're down Over 100. PANIC MORE! PANIC MORE! NEVER MIND. Only down 17. PANIC SLIGHTLY! HOORAY! We're Up 75. STOP THE PANIC! OH SHHIT! We're Down 5! PANIC MORE! PANIC MORE! Link to comment Share on other sites More sharing options...
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