posted on Nov, 26 2007 @ 10:44 AM
early on dow is down *but nothing drastic*
i was reading on numerous sources and in many speeches that what the public or investors are pinning their hope's on are further rate cuts, what
they don't seem to realize is credit will be INELASTIC to further rate cuts, because of the lack of trust in the banking sector attatched to the
structured vehicles which were responsible for most of the growth in western economies over the last few years.
just like when the fed rose 13 straight times 1/4 point (in 2004/05) the housing market kep booming and loans got cheaper, some may aruge that
their is lag time, and in some cases that may be true, but here we have a problem with the very foundation of the capital banks make loan's from, and
as these structured vehicles lose more with the housing market the secondary derivative market is taking a beating and the risk was spread throughtout
the banking and credit industry's , lenders are tightening their lending regardless of what the fed funds rate is, and* fast and furious rate cuts
can only hope to cushion this blow, not return us to the times of a credit boom*
a problem in the 500 trillion derivatives market tends to do that.
edit market is in a free fall sort of mode now.
i will re-iterate people should get OUT of stock's .
the reason why is simple the risk to reward for staying in the market when there is a credit crunch the likes we haven't seen on THIS planet ever.
515 trillion derivatives market is having seizures, the potentail fallout will likely shake inflated asset prices DOWNWARD.
Hold cash, yes cold hard cash. The dollar has already fallen down the steepest slope it is going to fall, yes it will go lower, but it is not in a
hurry to go to the bottom of the ocean, at least not yet.
People have been baited to go into the markets now to outpace inflation.
The smart money is in cash ( or better yet was converted to Euro's) as well as (Yuan). The big money is waiting for asset deflation. They will use
this cash to buy up assets at penny's on the dollar. The public and gov't will demand a solution! (after millions lose ton's in the markets).
Then we shall learn what inflation means. The Fed and bernanke and the gang will man their "helicopters" and begin to severely devalue the currency
as well as inflate, inflate,inflate using any and all measures.
When the fed starts printing out of control (they aren't yet, although some are being *baited* into believing so) People will soon after become hip
that their dollars are going to be worth a lot less tommorrow than today. they will raid their 401k (if they hadn't already for food, and
necessity's) and this money will PILE into the very investments that the RICH had bought dirt cheap
[edit on 26-11-2007 by cpdaman]