Options
The stock market will crash tomorrow!...On the other hand, perhaps not!
Bear
Posts: 18,954 ✭✭
Why, because I said so, that's why.
There once was a place called
Camelot
Camelot
0
Bear
Posts: 18,954 ✭✭
Bear
Posts: 18,954 ✭✭
Comments
roadrunner
In God We Trust.... all others pay in Gold and Silver!
are now getting some type of Governmental assistance, I do not see a positive
outcome for the stock markets. The frantic oscillations of the market on a daily
basis, further confirms my apprehensions.The lack of jobs, the continuing loss of
assets of the middle class ,as well as the inability of our Government to correct the
major defects in our financial industry, will take years to correct ,if ever. I believe that
optimistic views may well be validated in the distant future, but do not seem appropriate
in the near future. What is disturbing the worlds economic well being ,will need time of
indeterminate duration ,to again reach a healthy equilibrium.In the mean time, I guess we
pay down debt, keep stacking and hope for the best. After all, 124 trillion dollars of debt is
not so bad. Its just a matter of a few thousand years to get it all paid off.
Camelot
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
slowly unraveling.Everyone is tip toeing around in stocking feet
afraid that a single wrong move will break the thread and our National
fantasy ,will come crashing down into 300 million pieces.
Camelot
Like Warren Buffett said, it didn't pay to bet against America in 1776, and it won't pay to do so now.
<< <i>Where I live, hundreds- thousands of people get up and go to work everyday. Yes our employers may be letting various departments shrink through attrition and non-replacement, and there always seems to be water-cooler talk about the next "reorg", but for the 88% of the people in my state who are officially "not-unemployed", the earth still turns more or less as it did when I was hired, 2 & 1/2 years ago. Sure, things are bad. But the clock isn't winding down. Many people like me still have jobs and are still paying our taxes. We'll get through this.
Like Warren Buffett said, it didn't pay to bet against America in 1776, and it won't pay to do so now. >>
Good point!
<< <i>
Like Warren Buffett said, it didn't pay to bet against America in 1776, and it won't pay to do so now. >>
Warren should have bet against Conoco Phillips, but he believed in them too. America is much different
today then it was in 1776. I have faith in the hard working American people. I don't have faith in the people
of this country who control the money. Once people/countries stop buying our debt, then look out below.
Box of 20
As many have mentioned above, we do have are problems, and they do not appear to be getting better. But, one point that seems to be missing is what I believe to be the real crisis facing our country, and that is the fact they we are addicted to foreign oil, meaning every time we fill up our gas tank, we are transferring wealth outside of this country and into another. It doesn't matter what we do, or what policies we make, until we either drill within our borders, or find an alternative to crude, our money is literally going up in smoke.
<< <i>Yahoo headline "Insiders Sell $100 Million in Stock." >>
I'm sure he's kicking himself in the ars now...should have waited until today.
Yeah, except back then there weren't $213 TRILLON in otc derivatives being carried by our top 25 banks. Back then the top 5 banks marked their assets to market. If our top 5 banks did that today they'd be instantly insolvent with far too little reserves to cover their liabilites. It ain't 1776 anymore. And even though old Warren publically based otc derivatives as Financial Weapons of Mass Destruction back in 2003, he is still carrying his share of them.
roadrunner
Besides RR I suspect you know full well that fancy-big number is notional value of contracts, not their settlement value, which is a fraction of a % of the underlying. Might be useful for shocking the rubes, but not much else. The notional value of Lehman's counterparty derivative exposure was in the hundreds of billions- trumpeted far and wide- and was ultimately settled, quickly and without further mkt dislocations, for total losses in the high single-digit billions- a fraction of the notional.
Further lost in the hype is the folly of marking an asset one intends to hold to maturity- especially so over long periods of time- at "market" prices. Banks have always been involved in an inherently risky, difficult to price carry that is essential to any economy hoping to allocate capital effectively. Marking to market generates the opposite of stability, exposing balance sheets to unwelcome volatility and yes, speculative attacks that have no place in a stable financial system. That's not to say mark to model can't be abused, but still... mark to market is no panacea and not appropriate for valuing long-term assets (bank loans).
Lots have complained about Berkshire Hathaway's derivatives, but few get the subtlety- a derivative contract really is just another flavor of insurance, and properly priced, the assumption of such exposures can be quite reasonable for an insurer to assume. Berkshire is first and foremost an insurance company with great expertise in (and success at) the pricing and coverage of exotic insurance risks. And further, Berkshire's contracts don't require Berkshire to post collateral when your beloved "mark to market" value of the contract drops below some level- in contrast to the vast majority of derivative contracts for example written by AIG. You should also note that Warren Buffett spent the better part of several years unwinding the tens of thousands of mispriced derivatives in the portfolio of General Re, a reinsurance which Berkshire acquired in 2000- and roughly finished that unwinding around the time of that WMD quote.
Per usual, the reality is far subtler and nuanced than the pundits would have you believe...
It's not appropriate either to run a banking operation at 30:1 leverage for the purpose of generating high fees on notional values and when the pyramid collapses to hand a bill over to the taxpayers for payment.
When they decided to change the rules for valuation and the long-held accounting standards on which every enterprise in the country had been based, somebody lost and I have a hunch that it wasn't the bankers.
Market valuation is the reality. Valuation models used for flash trading are part of the problem.
I knew it would happen.
<< <i>
<< <i>
Like Warren Buffett said, it didn't pay to bet against America in 1776, and it won't pay to do so now. >>
Warren should have bet against Conoco Phillips, but he believed in them too. America is much different
today then it was in 1776. I have faith in the hard working American people. I don't have faith in the people
of this country who control the money. Once people/countries stop buying our debt, then look out below. >>
So you don't have any faith in the fed or banking system, of course most of the posters here don't.....or even actually believe in capitalism as far as I can discern.
but you would have had faith in the financial system in 1776
BTW, don't feel too sorry for Warren, the total return for COP in the last decade, which of course has been a lousy decade for stocks, was over 11% annualized.
we always elect politicians that pander to the selfishness of humanity and by so
doing ,deplete trust and confidence of our fickle population. It seems, that it is every
man and woman must look out for themselves in the face of lobbyist money, mega
corporations and the revolving door between government officials regulating the
industries that have just come from and to which they will soon return. Not what the
Founding Fathers had in mind at all.
Camelot
<< <i>If we selected sensible people to run the Government, we would be OK. However
we always elect politicians that pander to the selfishness of humanity and by so
doing ,deplete trust and confidence of our fickle population. It seems, that it is every
man and woman must look out for themselves in the face of lobbyist money, mega
corporations and the revolving door between government officials regulating the
industries that have just come from and to which they will soon return. Not what the
Founding Fathers had in mind at all. >>
As always, you're full of wisdom.......but what about your next prediction?
one more time, and that new bonus room add-on and in-ground pool will be so sweet! look for me posting a picture of my new Lexus coupe!
THANK YOU BEAR!
Liberty: Parent of Science & Industry
While I hope everything works out well for all, I have fears that the rise
in market prices ,is merely an illusion of well being, on the precipice of disaster.
I truly hope that my misgivings ,are totally wrong.
Camelot