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World Markets Plunge - DJIA Futures Down Nearly 500 Points

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posted on Jan, 24 2008 @ 02:24 PM
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Interesting to see how the bond insurers rely on private undisclosed resources to bail out insurance.

They are adamant to tell who is doing the bailing.

Why?




posted on Jan, 25 2008 @ 10:50 AM
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I am making good money now with my long positions. I hope that instead of complaining about things, people took the buying opportunity for what it was.



posted on Jan, 25 2008 @ 11:25 AM
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This was kind of a surprise, that one trader could cause this 7Billion dollar hit to a France bank.


A Spiral of Losses by a ‘Plain Vanilla’ Trader

PARIS — On the elite trading floors here, where France’s brightest minds devise some of the most complex instruments in global finance, few people noticed Jérôme Kerviel.

He was lucky to be there at all. Many of his colleagues had been plucked from the prestigious Grandes Ecoles — the Harvards and M.I.T.’s of France — and wielded advanced degrees in math or engineering. Mr. Kerviel arrived from business school and started out shuffling paper in the back office.



posted on Jan, 25 2008 @ 01:42 PM
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Originally posted by traderonwallst
I am making good money now with my long positions. I hope that instead of complaining about things, people took the buying opportunity for what it was.


i don't think anyone can feel secure in any way with any of their positions in especially U.S assets, I think it is a bull trap

their is tremendous uncertainty in the markets as well as in the currency.

hopefully i am proven wrong.

euro gold will rise this year a good percent, they will have to cut rates.



[edit on 25-1-2008 by cpdaman]



posted on Jan, 25 2008 @ 08:49 PM
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CP:

trade not invest in markets like this. Can't invest for some time yet.

Still short a lot of the solar stocks. They had a huge year last year. Up over 20% in almost all of them. Closed out a bunch of them Weds. with 30%+ gains in 8 days.

Still short MCO, MHP as Moody's is gonna face a ton of lawsuits over rating all those CDO's as AAA. MHP owns S&P and they will face the same. Short both in the mid $60's. Still short MBI since the mid $60's. I covered my short in ABK at $26 which really annoyed me.

Also short COF, I still think the auto and home loans will hurt them....but most of all, all those credit cards bills not being paid. Short that at $59.

Picked up a bunch of small shorts last friday and doubled up on Tuesday's open. Have not sold any of my longs yet, but will move quick if need be.



posted on Jan, 26 2008 @ 12:00 PM
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trader, i guess i should have figured that out based on your name.


I just don't think most people have a clue of how dire the economic situation is. We don't have industry to fall back on in a recession like in the past, the economy is based on financial shananigans and rising house prices, the latter is falling fast w/ the former ( the reflection of structured finance) nearing the edge. Thus the "recession" the gov't is trying to keep us out of may not be "our father's recession's" . also low interest rates can not extend credit faster than the pyramid structured credit regime's are collapsing. that is why hyperinflation will be a political decision IMO dependant on fiscul stimulus plans ( could be a few more to stem unrest) . a credit collapse which is deflationary is the reason a hyperinflationary response would be enacted.

The intresting thing is perhaps after a brief fall in stk markets nominal values may go back up (if inflation can outpace credit deflation, and bond's are bailed out), though i would not bet on it. the kicker i beleive is that the currency's will lose another 50% of purchasing power within 3-4 years (unless the fed. govt allows or can't stop a very very severe recesssion to set in where they don't print or hand out enugh money like mad). and they allow markets nominal values to fall (say to 8000) in that case our currency may be stronger, but unemployment worse, most gov'ts choose inflation, but the u.s is unique in the fact they may choose to protect the advantage of having the world reserve currency , like they did in the 80's with volker. also it is more difficult to "execute" inflation when simultaniously so much credit is deflating. 2 much uncertainty's but no option will be good.

the following paragraph is filled with run on sentences and tons of speculation (may want to skip)

Most people's because of the way they are "wired" will think the markets are a decent place to put their money if they see nominal values steadily rising , EVEN IF the decrease in purchasing power (value of currency) is falling much faster. It is the sneakier more deceptive way. so it is wise to keep aprised of , whatever should happen. Although if all currency's are being devalued against gold the u.s may be more eager to attempt inflation , since inflation (depreciation of the dollar) would not be reflected in the DOllar index like it was this year, because all currency's would be being devalued simulationously, and thus the role as world reserve currency would be safer with less benefit of backing out of $ (if worldwide recession and rate cuts occur) with the drawback being when each are compared to their rising price per ounce of gold, it would be obvious, however central banks are notorious for depressing the price of gold via the hidden hand in gold derivative markets and dergulation of gold leasing standards (allowing supply to be artificially stimulated) to reduce price. This benefit of reducing gold price pleases gov'ts because they can reduce the appearance of inflation which allows demand to increase for more debt (treasury bills) as people seek the "safety" of these investments IMO.

A revelation: the biggest losses (on paper) for mortgage bonds have been in PRIME mortgages not subprime. to be clear (and fair )prime market are much bigger (which makes the feat easier) , but also the media has focused almost exclusively on the "subprime" section to keep the image that this "problem" is containted, it's NOT. they also omit the prime mortgage losses so that they can say, "suprime is overblown it is only X percent of total market". So they are being deceptively accurate. that pat

IMO, If the European Central Bank is very stubborn w/ rate cuts it may force the fed's hand to stop cutting ( or risk losing world reserve currency status by develuing currency vs. euro too much). . Perhaps the ECB would like to regain some of their power which was transferred to NY financial centers from London two generations ago?

Their is much uncertainty to which paths' govt's will chose and the aggresion in which they do so (spending and handing out $), also to wether they will rescue the bond monolines, the cental bank or "federal reserve is increasingly a mute point in this situation as paul volker (former fed chair) said last week on cnbc " it is out of their control". this is suppose to appear in the NY times soon.


[edit on 26-1-2008 by cpdaman]



posted on Jan, 26 2008 @ 12:49 PM
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Brace yourself for next week, because its going to be more woes in the markets as more Wright outs are coming public.

I think that the fed will again do their magic trick with the interest rates.

.50 next?

I can not wait.



posted on Jan, 26 2008 @ 01:08 PM
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26 underwriters are named in the litigation, "We will pursue every avenue to ensure that those who defrauded investors are held accountable for their actions," said Thompson, who helps run the city's pensions.



The buzzards are not just circling, but have landed to devour the financial carcasses. Devour it they will in a slam dunk judgment that sets precedent for all other claims of a similar manner. The final blow to the establishment investment banking business is twofold. First you will see a drastic fall in their earnings (OTC derivatives accounted for 50% of the bottom line), followed by a drastic increase in legal bills and settlement costs.


www.jsmineset.com...


We have only just seen act one in this play. As the OTC and CDS nightmares are uncovered, the Feds rate cuts will only serve to increase inflation. I wonder how China will react to us destroying their mountain of dollar holdings. Oh well, paybacks a .....



posted on Jan, 27 2008 @ 09:53 PM
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ok , part deux?

Asian markets down big as of 11 pm

Shanghai (china's market) down 5.6% so far

Nikkei already 2.5 down

Hang seng 4% down so far

here up the updates finance.yahoo.com...

hey ben cutting rates at this point doesn't do sh*t, you should stop before you force a run out of the dollar, lot's of ceo's already got outta dodge.


[edit on 27-1-2008 by cpdaman]



posted on Jan, 28 2008 @ 07:07 AM
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Rate cuts have done nothing. The 30 year mortgage rates in the past week since the cut have went up by half a point at most banks. I know it takes a month or two to trickle through, but if the fed cuts 1.25% points in 2 weeks time (as of Jan 30) and the banks raise rates by half a point or more in the same time then that shows you what the trend is for interest rates and APR's. Banks are getting their cake and getting to eat it too apparently. If I was the FED then I would demand that the banks pass the low rates onto the consumer or have to pay a 2% point fee on their own FED to bank loans.



posted on Jan, 28 2008 @ 11:27 PM
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To tell ya the truth the "surprise" 75 bps cut on Tuesday, which even I said was necessary, not here but at a meeting at work, was completely UN-NECESSARY and probably is a big negative on the market. Not to toot my own horn, but the S&P level I wanted to see get traded was 1325. This was breached on Friday before the cut. The S&P traded down below that figured and rallied on the close to close at 1325.19. It HELD my target price with a close above that figure. What happened the following Monday was a complete enigma. Markets all around the world getting whacked for no apparent reason. In a monday morning meeting I was dumb founded by it, as there was no fundamental reason for it.

We discussed the markets that day and the inherent risk to the economy. We all agreed that immediate action would be taken. I figured 50 bps so they cut another 50 bps at the actual meeting. The 75 bps was a surprise. Then Wednesday came out.....and we found out why the markets were down. A French bank was in trouble because of a rogue trader. BULL$HIT!!!! Have you ever heard of a rogue trade that won? Of course not.... When they work, they are congratulated and promoted. There is no way I will believe that the bank did not know about their positions, forget about all the hacking crap. Someone knew...someone always knows. From what I have heard, the bank was warned almost a year ago by strange positions that the trader was taking, by the actual EXCHANGE!!!!

Now, back to the US and the rate cut. Did we need it? At the time I would have said yes, I thought the $hit was hitting the fan. Now that I look back, all it did was take an effective tool out of the hand of the FED.. The FED reacted....they are supposed to act before they need to..be proactive. They purely paniced. I would have liked them to take some time to investigate.....find out why the markets were trading the way they did. Where were the trades cominng from? Was a hedge fund in trouble?? a mutual fund??? Who was doing all the selling. These are things that above average investors can do on their own by watching order flow. See what markets are leading the trading that day. What options were most active.... I also blame the French Banks and Government for not communicating better with other entities. Granted, when things go bad......smart investors pile on the pain..... Many times I have seen out right panics on stocks....the more selling brings in more selling brings in short sellers and everything. Kind of the Enron effect. It was not accounting that brought down the company it was a bad stock that did. But thats for another thread.

The fact that the FED acted to prevent a panic.....that never should have happened..... cost them a big weapon. The markets held the 1325 level. The friday before showed real buying at the close..... It was a previous level of support a very key figure. If not for the French bank, I believe we would have managed the down market and could have used the support level for a rally. Support levels and resistance levels are huge for markets, not always stocks, but huge for markets. At that Monday morning meeting where we were trying to figure out how bad things could be the next support level we saw in the markets was around the 1260 level in the S&P's. its no wonder that when the markets opend that day....it was at 1260. What happened? We rallied off that level. Support worked.

The FED wasted 75 bps points it could have used in the future when there is a real need for cut, whether it be emergency or at a meeting. Not good. Eventually you can;t cut rates to correct problems, and that was a big chunk of a safety net.

Don;t get me wrong....i completely disagree with the fact that they are throwing the cause of the credit problem back on the problem with an attempt to fix it. Like pouring gasoline on a fire to put it out.

Bernanke has been behind the curve since he got in. I called for his ouster in August...... When he was still talking about inflation and not the pending liquidity crisis.

Enough ranting for now. Don't worry, the markets are safe. I still see the ultimate downside of 1260 on the S&P, but even I have covered almost all of my short positions.....and have began buying stocks again. Once the earnings period is over....we have 2 relatively quiet months. Thats when we will see what happens. Right now a lot of trading is going on.....Investing takes place during quiet periods. People build or scale back positions then.

Watch the market flow...... Manage your risk!!!! Do your own research!

[edit on 28-1-2008 by traderonwallst]

[edit on 28-1-2008 by traderonwallst]

[edit on 28-1-2008 by traderonwallst]



posted on Jan, 29 2008 @ 12:25 PM
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reply to post by HimWhoHathAnEar
 


China, Arabs nation they are all cashing out on the sell out they are getting their hands on a piece of American that never before they could even dream of owning.

In order to bail out their loses, top American finacial institutions like Merryl Lynch and Citigroup has open their doors to Aisan and middle east investors.

Something that they would never had done four years ago.

This investors are the ones helping the markets come out ahead everytime another bad news comes to light link to the subprime mess.

Is working so far and so is working when the fed step in to bail them out more.

But now the worrys about this vast holdings is starting to show, the question is who and how the foreign investors will be regulated.


1-Citicorp got a $7.5 billion injection from Abu Dhabi now they are looking into another $1 billion from Kuwait and $9 billion from China.

2-Beijing has put $5 billion into Morgan Stanley and bought heavily into Barclays Bank.

3-Merrill-Lynch, sold part of itself to Singapore for $7.5 billion and is seeking another $3 billion to $4 billion from the Arabs. Swiss-based UBS, taking a near $15 billion write-down in subprime mortgages, has gotten an infusion of $10 billion from Singapore.


www.economyincrisis.org...

I guess when it comes to national security money is not problem.

After all that borrowing and incredible national debt, now our nation is going to be owned by our borrowers they are now coming to take their fare share of america and our chidlren and grandchildren legacies of generations to come.


[edit on 29-1-2008 by marg6043]



posted on Jan, 29 2008 @ 03:23 PM
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The DJIA needs to break-through overhead resistance around 12500. It was turned-back there last Friday, and again today. If we get an anti-climactic 50p cut tomorrow...will it be enough to sustain the rally through the week? I guess it depends on news.

NY Suggests that Bond Insurers Be Spared Downgrades


Edit: SP


[edit on 29-1-2008 by OBE1]



posted on Jan, 29 2008 @ 04:04 PM
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reply to post by marg6043
 


You're absolutely right. They will 'try' to keep the banks up and grab ownership at the same time. The only problem is that Bernanke is undermining the Dollar simultaneously, making their Trillion worth of Reserves worth less AND whatever solvency the banks have worth less. That is the effect of printing money (inflation). If the dollar goes into freefall then the last one out loses. China simply can't win a fight against our printing presses. It's our money, but it's their problem!



posted on Jan, 29 2008 @ 05:30 PM
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reply to post by HimWhoHathAnEar
 


The question is how willing are these foreign nations investing in US allowed to lose as long as they get a firm hold of the US economy.

I think that for them owning mighty America worth every penny of it.


[edit on 29-1-2008 by marg6043]



posted on Jan, 29 2008 @ 05:36 PM
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reply to post by marg6043
 


Marg: My guess is that a good many of these foreign investors have hedged their currency holdings to offset losses in the USD market. That's why we haven't seen countries like China dumping their bonds to any great degree. Who knows, maybe there IS NO GOLD at Fort Knox, the Chinese really DO have it all.



posted on Jan, 29 2008 @ 05:40 PM
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reply to post by Cynic
 


I have been a firm believer that our so call Gold reserves are nothing more than a myth to keep people hopeful.



posted on Jan, 29 2008 @ 05:45 PM
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reply to post by marg6043
 


A'int that the undeniable truth! The phrases from the novel 1984 just leap to mind Marg. The parallels are rather creepy to say the least.

On a side note, who do you think will win out in the Billary-Obama Fest? Or neither? Mildly curious, since you seem to have a couple of more clues about life than some of the posters here.



[edit on 29-1-2008 by Cynic]



posted on Jan, 29 2008 @ 05:47 PM
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reply to post by Cynic
 


Well I can tell you this much and perhaps it will be a hint to things to come, I am from the south so it seems that Obama is wining the harts and minds of most people in the south over Hillary.

Personally I do not like Hillary as a candidate.



posted on Jan, 29 2008 @ 05:53 PM
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reply to post by marg6043
 


I thought you might be thinking that way. I am Canadian, but follow your politics more closley than some of my peers. Hillary has too much baggage with Bill, and Obama, although very young, exudes great confidence.

He would, IMHO, be a very good president, emphasis on good. It appears he has your country's best interests at heart, and stands to breakthrough many barriers soon.

I am watching all of the races with great interest, since my country stands to benefit as well from a kinder and more down to Earth president.



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