Financial stocks are getting slaughtered

reply to post by clay2 baraka


That's for the day after election day, though. Totally different animal.

Bad bank - stock plummets - this is natural.

what is un-natural is the concept of propping a bad business up with LOTS of taxpayer money - money that has yet to be paid in, even.

I tell you what I am really afraid of, Helicopter Ben. See I expect taht soon, very soon, we will hear about a "new stimulus" that WILL go to the taxpayers.

A large check, drawn on the US Treasury to each and every taxpayer.

You see, that's gonna be the ONLY way to stop the deflation and bring inflation into play.

There is no way for wages to increase - too many lost jobs for 1, not enough unions for 2. Inflation must happen in BOTH income and prices.

Helicopter Ben is seeing the major flaw in his thesis - He can't control wages.

So the only alternative is going to be a direct and substantial injection of cash into the hands of the taxpayers.

THEN the dollar WILL plummet, and we will be facing serious inflation.

If they can find a way to continuously deposit dollars into the taxpayers hands... hyper-inflation.

And the really messed up part...

Most people in this country are SO UTTERLY CLUELESS that they will be tickled absolutely pink about the Stimulus checks and think how absolutely WONDERFUL our new president is for giving them to us.



[edit on 1/20/09 by redhatty]

This is very scary. With UK banking sector teetering on the brink of collapse, they may start nationalizing major banks (such as RBS). The government will give this stimulus a try, but this will not help. The banks are suffering from trillions in toxic debt tied to complex derivatives. The liberal government will probably nationalize many of the major banks so depositors do not run on the banks. if the government owns the bank, then your money will be safe. If depositors really start running on the banks, we will collapse with the rest of the world. This is not an American problem, the whole world is teetering on a financial collapse. Who said things aren;t made in America anymore?

Originally posted by redhatty
Bad bank - stock plummets - this is natural.

What many investors are more worried about than earnings is nationalization. Then they are wiped out.

Originally posted by burdman30ott6
reply to post by clay2 baraka

 

That's for the day after election day, though. Totally different animal.

Thanks,

I caught that at about the same time you posted this. I have since edited my post to reflect inauguration day market data.

[edit on 1/20/2009 by clay2 baraka]

I've been hearing on the news that it is rumored that they may do what was originally planned with the first bailout...setting up a central bank to buy all the bad debt. This is reportedly coming from Obama's Administration. I have no links on this though. Maybe someone else had heard this also.

Added:

If this is true...is this yet another package or part of the new one? How much are they going to keep spending?

Each day it gets more depressing. My woman tells me to just let it happen and that i can't do anything about it anyway. She's right. I can't. Looks like i'll just have to sit and take it....but i'm still going to bitch like there is no tomorrow.


[edit on 20-1-2009 by David9176]

reply to post by David9176


More banks to fix what banks are doing, I also heard that is going to be the creation of a infrastructure bank to handle the money that will be used from the economic stimulus.

I guess somebody has to make money of the money that is going to be stolen from tax payer.

is this the crisis Colin Powell warned us of?

Originally posted by David9176
I've been hearing on the news that it is rumored that they may do what was originally planned with the first bailout...setting up a central bank to buy all the bad debt. This is reportedly coming from Obama's Administration. I have no links on this though. Maybe someone else had heard this also.

Added:

If this is true...is this yet another package or part of the new one? How much are they going to keep spending?

Each day it gets more depressing. My woman tells me to just let it happen and that i can't do anything about it anyway. She's right. I can't. Looks like i'll just have to sit and take it....but i'm still going to bitch like there is no tomorrow.


[edit on 20-1-2009 by David9176]

What it is, is a "bad" bank, where it takes all of the banks toxic debt and securities off their balance sheets so they will begin to lend and they look to be in good shape. The only problem is, the government will want to take equtiy stakes in the banks in exchange of taking on over a trillion dollars of toxic debt. The banks don't have that much equity. Also, the debt/assets must be valued, which is very difficult to do.

There is some running going on because of this. Gold shot up 3 percent, and other commodities are also seeing an increase in demand as Banks are losing huge amounts of stock value. I posted this in another thread. Thought it prudent to post it here for some added clarity of where the market is going and why.

PRECIOUS-Gold up 3 pct as investment buying boosts prices

LONDON, Jan 20 (Reuters) - Gold rose more than 3 percent to an 11-day high of $860.40 an ounce on Tuesday amid market talk of a large order, with firm investment demand for gold as a haven from risk fueling buying of the precious metal. Spot gold was quoted at $854.60/856.60 an ounce at 1525 GMT, up from $834.55 late on Monday. Earlier it touched a low of $822.90, down more than 1 percent. U.S. gold futures for February delivery GCG9 on the COMEX division of the New York Mercantile Exchange rose $17.20 to $857.10 an ounce. Standard Chartered analyst Daniel Smith said strong investor flows into products such as exchange-traded funds, as investors sought more secure assets, were offsetting weaker jewelery demand. "People are slowly building long positions in gold and commodities more generally," he said. Gold shrugged off early weakness linked to a strengthening U.S. dollar and weaker oil prices. The dollar rose to a six-week high against the euro as traders worried about the outlook for the euro zone economy, after the European Commission issued a grim forecast for 2009 and Standard and Poor's cut Spain's debt ratings. [ID:nN20402332]

Gold tends to move in line with crude, as it is often used as a hedge against oil-led inflation. Moves in the oil price are also an indicator of interest in commodities as an asset class.

Page Two:

Overall, fears over the outlook for the global economy and the financial system are boosting interest in products like exchange-traded funds -- which issue securities backed by actual stocks of gold. These are seen as less risky than paper assets.

Imagine that, people are hiding from the dollar already. And this is set to gain more steam. It has been estimated that the 1st quarter of 2009 Gold will make it to about $1080 and then continue to move on up as people run from the dollar amid debt woes and the very probable threat of a California Collapse. Should this happen, we could very well see a massive run on the dollar. And this, as you know, is what I'm worried about the most.


[edit on 20-1-2009 by projectvxn]

[edit on 20-1-2009 by projectvxn]

Bonds are set to take a major hit in the near future. Treasuries Fall for Third Day as Traders Add to Inflation Bets

“Obama’s economic stimulus plan will drive the market,” said Tsutomu Komiya, an investor in Tokyo at Daiwa Asset Management Co., a unit of Japan’s second-largest brokerage, which has the equivalent of $108.2 billion in assets. “It’s time to stay away from Treasuries.” The yield on the 10-year note, used to set corporate and government borrowing costs, rose two basis points to 2.40 percent as of 10:22 a.m. in Tokyo, according to BGCantor Market Data. The price of the 3.75 percent security maturing in November 2018 fell 7/32, or $2.19 per $1,000 face amount, to 111 3/4. A basis point is 0.01 percentage point. Longer-term Treasuries dropped for a second day yesterday on speculation Obama’s administration will join governments around the world in selling record amounts of debt to battle the global recession.

‘Time to Sell’ Treasuries, Biggest Korean Fund Says (Update1)

By Wes Goodman Jan. 19 (Bloomberg) -- A rally that sent U.S. Treasuries to their best year since 1995 is coming to an end, South Korea’s National Pension Service, the country’s biggest investor, said. U.S. government efforts to combat the recession will prompt the Federal Reserve to raise interest rates this year, said Kim Heeseok, who oversees $160 billion as head of global investments for the service in Seoul. The decline would snap a surge that sent the securities up 14 percent last year, according to Merrill Lynch & Co.’s U.S. Treasury Master index, as investors sought the relative safety of debt. “It’s time to sell U.S. Treasuries,” said Kim, who took over as head of investments at the start of the year. “The stimulus plan may cause inflation. The U.S. will raise the benchmark interest rate.” U.S. government securities headed for their first monthly loss since October after President-elect Barack Obama, who takes office tomorrow, said he will do “whatever it takes” to battle what he called the biggest economic crisis since the Great Depression. Obama is planning an $850 billion stimulus plan, on top of $700 billion approved by President George W. Bush.

[edit on 20-1-2009 by projectvxn]

Here's interesting news...Is this the beginning of capital flight?



Zero Rates Push Traders to Cash-Rich Swiss Franc, Yen (Update1)

Jan. 20 (Bloomberg) -- At a time when interest-rates are sinking toward zero around the world, the biggest currency traders are recommending countries that have the largest trade surpluses, led by Japan, Norway and Switzerland. BNP Paribas SA, the best currency forecaster in a 2007 Bloomberg survey, says the yen will strengthen about 14 percent against the dollar by June. Goldman Sachs Group Inc. made Norway’s krone one of its top 2009 picks, with possible gains of 17 percent versus the dollar. Bank of America Corp., the largest U.S. lender by assets, says the Swiss franc will advance against every major currency. The global economic crisis that forced central banks from the U.S. to New Zealand to cut interest rates last year also reduced earnings from so-called carry trades by about half, according to data compiled by Bloomberg. Currencies of countries with trade surpluses are perceived as safer because governments don’t have to brave credit markets in a year when sovereign bond sales are likely to exceed $3 trillion.

The above post has all the hallmarks of a bond bubble likely to burst in the near future. This could happen as people seek higher ground amid a sea of inflation fears. Countries with surpluses would be a safe so long as they refrained from over-spending, or putting costs on the charge card, as it were.

www.abovetopsecret.com...

[edit on 20-1-2009 by projectvxn]

Originally posted by vonvitt
reply to post by St Udio

 

I'm sorry but that is about the most unsound investment advice I have ever heard.

I wouldn't care if my 20% loss came in the form of a stock losing $.80 or $8.00...IT'S STILL A LOSS OF 20%!!!!

I understand where you are coming from but you are wrong. It all depends what price you invested at....

[edit on 20-1-2009 by vonvitt]

I agree vovitt. But hey, don't get surprised my friend. That's why we're heading where we're heading. Is because we have people like the guy above that we find ourselves in this deep snip. If people were more realistic and not flying all the time with their heads in the clouds then I guess this world would have been different.

US banks are completely insolvent.
UK banks are completely insolvent, too.

Whole US financial system is one large Ponzi scheme.

Period.

I think 401k is now just another tax. You put your money it every week,
and you make no gains, only losses. People are wiped out of their money, that help keep these corps. alive . It also helps to keep the stock market going, as we are the ones still buying the stock, yet we get no return.

Eventually it still comes crashing down, and it takes down peoples lively hood with it. I think it would be better to buy gold each week, or silver, than invest in 401k now.

ama

The stocks are going to go up and down for a few more weeks before they completely crash. The rest of the states have to chime in about being completely broke and run on about measures being put in place etc. It has to be this way in order for the new admin to be securely in place and ready to act.

But what has me worried is that on his first day in our new prez is pulling a Kennedy and threatening the balance of the big corp running the show. That is not going to go over very well. I have no doubts that this sudden banking truth telling about their debts is perfectly timed to send a message to our new prez. I.E stay in line or we will crash it all down on your heads and just keep all the money we lied about anyway.

I'm betting that they are waiting for the 4rth quarter results of General Electric's earnings. They should be released Friday the 23rd. It will be interesting to see what the world's 6th largest company, a conglomerate that had $172 Billion in revenues last year, did with their $140 Billion dollar bailout money.

Stole from Mish's..........

“"GE - price target trimmed at Goldman to $15 from $17 based on lower expectations for Q4 earnings. Maintained Neutral rating"

'neutral' in analystspeak = sell now.

GE opened this morning at $11.88 in New York, the lowest open since 1995. Of course the stock has split 2:1 and then 3:1 since then, and 2:1 in 1994 at around $8.70. P/E now at 6:1, but Earnings look to decline.

Headline "GE Declines as Investors Eye Dividend, Credit Rating"