3 replies to this topic

[steve]

This is a very good time to go to a "B.P.A." meeting. The financials have led us down, very similar to 1998. MER went from 109 to 36 back then. That's a pretty good haircut. In 1998, 2002, and 2003, the financials signaled a bottom with strong monthly bullish reversal patterns in most financial stocks. MER volume in October 1998, the bullish reversal month, was a huge 295 million shares. MER went down 67% in 1998. It currently is down 29% from its 2007 high. I'm sure the Fed is now talking to the major investment banking firms and trying to put a figure on the less than prime mortgage-backed-securities and other related structured products in their inventory. The Fed then probably will provide liquidity guarantees to them so they will not have to sell them in the near future. Still, when the writedowns are announced, they will be huge. Steve

[ogm]

This is a very good time to go to a "B.P.A." meeting.

The financials have led us down, very similar to 1998. MER went from 109 to 36 back then. That's a pretty good haircut. In 1998, 2002, and 2003, the financials signaled a bottom with strong monthly bullish reversal patterns in most financial stocks. MER volume in October 1998, the bullish reversal month, was a huge 295 million shares.

MER went down 67% in 1998. It currently is down 29% from its 2007 high.

I'm sure the Fed is now talking to the major investment banking firms and trying to put a figure on the less than prime mortgage-backed-securities and other related structured products in their inventory. The Fed then probably will provide liquidity guarantees to them so they will not have to sell them in the near future. Still, when the writedowns are announced, they will be huge.

Steve

Writedowns now = better earnings later.

[beta]

This is a very good time to go to a "B.P.A." meeting.

The financials have led us down, very similar to 1998. MER went from 109 to 36 back then. That's a pretty good haircut. In 1998, 2002, and 2003, the financials signaled a bottom with strong monthly bullish reversal patterns in most financial stocks. MER volume in October 1998, the bullish reversal month, was a huge 295 million shares.

MER went down 67% in 1998. It currently is down 29% from its 2007 high.

I'm sure the Fed is now talking to the major investment banking firms and trying to put a figure on the less than prime mortgage-backed-securities and other related structured products in their inventory. The Fed then probably will provide liquidity guarantees to them so they will not have to sell them in the near future. Still, when the writedowns are announced, they will be huge.

Steve

Agree, Steve. I think we are a long ways from The Bottom (and this coming from a Pollyanna who's been bullish since 2004). Much better bargains ahead.

The true depths of credit risks are still opaque and the markets have yet to price in the unknown. As for commercial banks, consider that they can no longer offload bad loans to the MBS markets which have now shut down but have to write down or keep them on their books, what does that do to their future earnings ?

Commodities, energy and other leader groups have yet to sell-off, which makes me think the real sell-off is just beginning ... We may get violent rallies on the way down, but anyone playing this uni-directionally long w/o hedges is asking for a major crewcut.

We may rally tomorrow, but the undertow is nasty !

Edited by beta, 05 August 2007 - 01:49 PM.

[Jnavin]

It might be useful to distinguish between "a bottom" and likely support levels. Or, it might not be.