The Stig
Diamond Hoya (over 2500 posts)
Posts: 2,844
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Post by The Stig on Oct 13, 2008 17:16:08 GMT -5
That was one heck of a day on Wall Street. Hands up everybody who saw it coming yesterday evening.... yeah, that's what I thought.
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Post by PushyGuyFanClub on Oct 13, 2008 18:26:43 GMT -5
I bought a few stocks on Thurs and Fri. Now I'm just 30% down. Woo!
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Post by StPetersburgHoya (Inactive) on Oct 13, 2008 18:30:54 GMT -5
Not to be pessimistic - but there was a similar rally in 1929.
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SirSaxa
Silver Hoya (over 500 posts)
Posts: 747
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Post by SirSaxa on Oct 13, 2008 18:48:43 GMT -5
That was one heck of a day on Wall Street. Hands up everybody who saw it coming yesterday evening.... yeah, that's what I thought. Tell you the truth Stig, it was fairly predictable. After the big upswing on Friday from the days lows, the UK and Europe banks announced their investments in banks and additional support such as guaranteeing inter-bank loans, and the US said they would be announcing a support plan too (tomorrow). Then you watched the DAX, CAC and FTSE last night go up, it was not that tough to see today would be a really good day on the NYSE.
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Filo
Diamond Hoya (over 2500 posts)
Posts: 3,910
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Post by Filo on Oct 13, 2008 19:49:45 GMT -5
Yeah, you could tell the start would be good, but the problem was it was not certain that it would hold. I pretty much expected another big sell-off in the last hour. Interesting times, indeed.
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SirSaxa
Silver Hoya (over 500 posts)
Posts: 747
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Post by SirSaxa on Oct 13, 2008 20:14:46 GMT -5
BTW, I should add that the steps taken by govt.s all over the world to shore up the banking systems has taken the Great Depression v2.0 off the table. But we are in the midst of a recession which is likely to last quite some time... well into 2009 at a minimum is my guess.
Whoever is president is going to want a stimulus package.
But, the US has to dig out of a HUGE hole. We have to show the discipline to avoid increasing spending and cutting taxes to ensure long term fiscal discipline, yet at the same time we need to spend to help get the country back on its feet. It is a tough quandry.
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Post by Coast2CoastHoya on Oct 14, 2008 9:01:26 GMT -5
The difference between 1929-1933 and 2008- ? is precisely that governments are getting involved at the levels they are. Yes, we have a huge hole to dig out of. Hopefully we've also learned some lessons and are going to restructure certain sectors of the economy as a result. Green building! Green energy! FWIW, "adjusting to the new normal" is the mantra amongst Wall Street types these days.
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FewFAC
Golden Hoya (over 1000 posts)
Posts: 1,032
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Post by FewFAC on Oct 14, 2008 23:44:00 GMT -5
My guess is 1/3 of the way through the current crisis, results may be slower thanks to intervention, with 1/3 of the actual spending on intervention acknowledged to date. However, we could be out of Iraq by the end of January, so we might actually have the money to pay for a stimulus. That alone could correct the crisis of confidence. Unfortunately, the underlying fundamentals of un-marked-to-market "assets" that can fetch 9 cents on the dollar clogging the balance sheets of financials doesn't help resolution, regardless of the alternate reality faith-based approach to valuation supported by the SEC and Treasury.
Luckily, if you have the stomach for it, the buy window for the next bull market is opening.
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Boz
Blue & Gray (over 10,000 posts)
123 Fireballs!
Posts: 10,355
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Post by Boz on Oct 15, 2008 10:12:07 GMT -5
Like my man John McCain, I don't know much about this kind of stuff , I just know that Gregg Easterbrook usually makes me feel better. I'm sure some experts can probably tear his point of view to shreds, but it's just nice to hear a sober perspective once in a while to counter some of the screaming banshees on TV. EDIT: That book that always gets plugged at the end of every Easterbrook column, "The Progress Paradox"? I highly recommend it. Liberals and conservatives can find some wisdom in there.
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Bando
Golden Hoya (over 1000 posts)
I've got some regrets!
Posts: 2,431
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Post by Bando on Oct 15, 2008 12:26:18 GMT -5
Like my man John McCain, I don't know much about this kind of stuff , I just know that Gregg Easterbrook usually makes me feel better. I'm sure some experts can probably tear his point of view to shreds, but it's just nice to hear a sober perspective once in a while to counter some of the screaming banshees on TV. EDIT: That book that always gets plugged at the end of every Easterbrook column, "The Progress Paradox"? I highly recommend it. Liberals and conservatives can find some wisdom in there. I read Easterbrook's football column, and tend to think he's an idiot on all other matters. However, if you want a takedown of TMQ, Kissing Suzy Kolber has the definitive take.
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Post by sleepyjackson21 on Oct 15, 2008 12:51:31 GMT -5
Worst two weeks of my life. Easily. I'm a self backed market maker/specialist and i've absolutely gotten destroyed. Life sucks right now. Oh well, at least i have midnight madness to look forward too.
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Cambridge
Platinum Hoya (over 5000 posts)
Canes Pugnaces
Posts: 5,304
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Post by Cambridge on Oct 15, 2008 13:43:57 GMT -5
Like my man John McCain, I don't know much about this kind of stuff , I just know that Gregg Easterbrook usually makes me feel better. I'm sure some experts can probably tear his point of view to shreds, but it's just nice to hear a sober perspective once in a while to counter some of the screaming banshees on TV. EDIT: That book that always gets plugged at the end of every Easterbrook column, "The Progress Paradox"? I highly recommend it. Liberals and conservatives can find some wisdom in there. I read Easterbrook's football column, and tend to think he's an idiot on all other matters. However, if you want a takedown of TMQ, Kissing Suzy Kolber has the definitive take. the funniest part about that takedown...is, I believe, it features Tiffany Bacon, of Gtown fame as the cheerleader of the week.
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FormerHoya
Golden Hoya (over 1000 posts)
Posts: 1,262
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Post by FormerHoya on Oct 15, 2008 14:04:50 GMT -5
Bang on correct Cambridge. Bang on.
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Post by Coast2CoastHoya on Oct 15, 2008 14:36:03 GMT -5
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SirSaxa
Silver Hoya (over 500 posts)
Posts: 747
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Post by SirSaxa on Oct 15, 2008 14:57:27 GMT -5
Not surprising...let's hope this trend continues under an Obama presidency. Also, for those who would like a layman's explanation of the current financial crisis I recommend the following from a couple of U of Chicago Biz School profs. Crisis Explained
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Boz
Blue & Gray (over 10,000 posts)
123 Fireballs!
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Post by Boz on Oct 15, 2008 15:10:47 GMT -5
Why all the animus towards Easterbrook?
You people are clearly anti-education.
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Jack
Diamond Hoya (over 2500 posts)
Posts: 3,411
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Post by Jack on Oct 15, 2008 15:16:03 GMT -5
Why all the animus towards Easterbrook? You people are clearly anti-education. I am merely Pro-Prince of Darkness (Bill Belichick).
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SFHoya99
Blue & Gray (over 10,000 posts)
Posts: 17,781
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Post by SFHoya99 on Oct 15, 2008 15:38:14 GMT -5
I don't agree with everything Easterbrook says, but I think he has a lot of good points.
I actually think his football opinions can be a bit lazy (especially Stop Me Before I Blitz) and way too anecdotal. They're way too repetitive, as well.
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Bando
Golden Hoya (over 1000 posts)
I've got some regrets!
Posts: 2,431
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Post by Bando on Oct 15, 2008 19:06:59 GMT -5
I don't agree with everything Easterbrook says, but I think he has a lot of good points. I actually think his football opinions can be a bit lazy (especially Stop Me Before I Blitz) and way too anecdotal. They're way too repetitive, as well. He thinks this way about everything, though, and this is why I'm not a fan, Boz. To him, ideas are reasonable and centrist because he agrees with them. He's a great writer but an extremely lazy thinker.
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Filo
Diamond Hoya (over 2500 posts)
Posts: 3,910
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Post by Filo on Oct 17, 2008 9:20:34 GMT -5
Just came across this NYT article on AIG. Pretty interesting description of how things went awry. Not sure if you need to register to access it, since it is from a few weeks back. www.nytimes.com/2008/09/28/business/28melt.html?pagewanted=1&_r=2The Reckoning Behind Insurer’s Crisis, Blind Eye to a Web of Risk By GRETCHEN MORGENSON Published: September 27, 2008 Excerpt: Although America’s housing collapse is often cited as having caused the crisis, the system was vulnerable because of intricate financial contracts known as credit derivatives, which insure debt holders against default. They are fashioned privately and beyond the ken of regulators — sometimes even beyond the understanding of executives peddling them.
Originally intended to diminish risk and spread prosperity, these inventions instead magnified the impact of bad mortgages like the ones that felled Bear Stearns and Lehman and now threaten the entire economy.
In the case of A.I.G., the virus exploded from a freewheeling little 377-person unit in London, and flourished in a climate of opulent pay, lax oversight and blind faith in financial risk models. It nearly decimated one of the world’s most admired companies, a seemingly sturdy insurer with a trillion-dollar balance sheet, 116,000 employees and operations in 130 countries.
“It is beyond shocking that this small operation could blow up the holding company,” said Robert Arvanitis, chief executive of Risk Finance Advisors in Westport, Conn. “They found a quick way to make a fast buck on derivatives based on A.I.G.’s solid credit rating and strong balance sheet. But it all got out of control.”
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