"Today's Key Market News - A Good Day to Crash
Well, today seems like a good day to crash. Thanks for nothing Ben, please gather your things from your desk on your way out. The Fed's last minute action might save the day, or it may be too little too late. The time to act was on the FOMC meeting. We told you two days ago that Bernanke dropped the ball and we told you yesterday that global market correction was pending. This morning overseas boards are flooded with red. In Asia, the NIKKEI 225 dropped 2.4%, the Hang Seng slipped 2.9%, and even mainland China's CSI 300 fell 1.1%. South Korea's KOSPI tanked 4.2%, while India's BSE SENSEX 30 drifted 1.5%.
Things were no better in Europe this morning, where the DJ STOXX 50 is down 2.9%, the FTSE 100 is slipping 3.1% and the DAX is off 1.6%. Now listen carefully, things are going to get even worse. Yes, the Fed did the right thing this morning by buying $19 billion in subprime mortgage debt backed securities, but that is not going to help the people who are going to default on that debt. No, it only helps the banks and funds holding those mortgage backed investments. So, in the end, the Fed did come to the rescue of the rich hedge fund managers while leaving the mortgage holders out in the cold.
The reason things are going to get worse, after today's very possible market crash, is because of the weakened American consumer. The poor guy has been carrying too heavy a burden for too long. As if more expensive gasoline, bigger supermarket bills, adjusting higher mortgage payments and negative home equity weren't enough, now the poor guy has his credit cards calling him and raising his annual percentage rate on the slightest fault. Well, not all anyway. The smart creditors are helping borrowers through this period, because they recognize that receiving some money is better than a complete default.
Global correction is coming. We've been anticipating it here for a couple years now, even before we started writing. Our friends managing global funds know about are concerns. We've moved too much manufacturing to China, a country we do not get along with and one with whom we have fundamental values differences. This is a country we are going to end up in debates with over energy and food, and shots could be fired, and we've moved our manufacturing there? Country risk! I just wanted to remind you CFA folk out there of an old term that use to show up in textbooks. The key is this, when the American consumer stops spending, as confirmed again by yesterday's retail data, then layoffs are pending in retail and more poor folk are going to default on homes they should never have purchased. And spending will just get worse. That means global manufacturing economies like China will be impacted. Then, global stock markets, well inflated ones, will correct as well.
This Fed action and the willingness to act by foreign central banks shows the Fed will likely eventually go the next step in cutting rates, we hope. But when!?! In any event, Henry Paulson and Ben Bernanke have lost our confidence and should lose their jobs. We don't need cheerleaders and academics, we need honesty and action. Maybe now people will stop beating on the legendary record of Alan Greenspan and remember just how reliable he was, and how confident we were with him in charge. "
AMEN to that!
A Good Day To Crash
Started by
DonBart
, Aug 11 2007 07:58 PM
6 replies to this topic
#1
DonBart
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Posted 11 August 2007 - 07:58 PM
A fantastic explanation of the current market scenario courtesy of WallStreetGreek. This guy is right on the money! Bernanke should be fired for gross negligence!
"Today's Key Market News - A Good Day to Crash
Well, today seems like a good day to crash. Thanks for nothing Ben, please gather your things from your desk on your way out. The Fed's last minute action might save the day, or it may be too little too late. The time to act was on the FOMC meeting. We told you two days ago that Bernanke dropped the ball and we told you yesterday that global market correction was pending. This morning overseas boards are flooded with red. In Asia, the NIKKEI 225 dropped 2.4%, the Hang Seng slipped 2.9%, and even mainland China's CSI 300 fell 1.1%. South Korea's KOSPI tanked 4.2%, while India's BSE SENSEX 30 drifted 1.5%.
Things were no better in Europe this morning, where the DJ STOXX 50 is down 2.9%, the FTSE 100 is slipping 3.1% and the DAX is off 1.6%. Now listen carefully, things are going to get even worse. Yes, the Fed did the right thing this morning by buying $19 billion in subprime mortgage debt backed securities, but that is not going to help the people who are going to default on that debt. No, it only helps the banks and funds holding those mortgage backed investments. So, in the end, the Fed did come to the rescue of the rich hedge fund managers while leaving the mortgage holders out in the cold.
The reason things are going to get worse, after today's very possible market crash, is because of the weakened American consumer. The poor guy has been carrying too heavy a burden for too long. As if more expensive gasoline, bigger supermarket bills, adjusting higher mortgage payments and negative home equity weren't enough, now the poor guy has his credit cards calling him and raising his annual percentage rate on the slightest fault. Well, not all anyway. The smart creditors are helping borrowers through this period, because they recognize that receiving some money is better than a complete default.
Global correction is coming. We've been anticipating it here for a couple years now, even before we started writing. Our friends managing global funds know about are concerns. We've moved too much manufacturing to China, a country we do not get along with and one with whom we have fundamental values differences. This is a country we are going to end up in debates with over energy and food, and shots could be fired, and we've moved our manufacturing there? Country risk! I just wanted to remind you CFA folk out there of an old term that use to show up in textbooks. The key is this, when the American consumer stops spending, as confirmed again by yesterday's retail data, then layoffs are pending in retail and more poor folk are going to default on homes they should never have purchased. And spending will just get worse. That means global manufacturing economies like China will be impacted. Then, global stock markets, well inflated ones, will correct as well.
This Fed action and the willingness to act by foreign central banks shows the Fed will likely eventually go the next step in cutting rates, we hope. But when!?! In any event, Henry Paulson and Ben Bernanke have lost our confidence and should lose their jobs. We don't need cheerleaders and academics, we need honesty and action. Maybe now people will stop beating on the legendary record of Alan Greenspan and remember just how reliable he was, and how confident we were with him in charge. "
AMEN to that!
"Today's Key Market News - A Good Day to Crash
Well, today seems like a good day to crash. Thanks for nothing Ben, please gather your things from your desk on your way out. The Fed's last minute action might save the day, or it may be too little too late. The time to act was on the FOMC meeting. We told you two days ago that Bernanke dropped the ball and we told you yesterday that global market correction was pending. This morning overseas boards are flooded with red. In Asia, the NIKKEI 225 dropped 2.4%, the Hang Seng slipped 2.9%, and even mainland China's CSI 300 fell 1.1%. South Korea's KOSPI tanked 4.2%, while India's BSE SENSEX 30 drifted 1.5%.
Things were no better in Europe this morning, where the DJ STOXX 50 is down 2.9%, the FTSE 100 is slipping 3.1% and the DAX is off 1.6%. Now listen carefully, things are going to get even worse. Yes, the Fed did the right thing this morning by buying $19 billion in subprime mortgage debt backed securities, but that is not going to help the people who are going to default on that debt. No, it only helps the banks and funds holding those mortgage backed investments. So, in the end, the Fed did come to the rescue of the rich hedge fund managers while leaving the mortgage holders out in the cold.
The reason things are going to get worse, after today's very possible market crash, is because of the weakened American consumer. The poor guy has been carrying too heavy a burden for too long. As if more expensive gasoline, bigger supermarket bills, adjusting higher mortgage payments and negative home equity weren't enough, now the poor guy has his credit cards calling him and raising his annual percentage rate on the slightest fault. Well, not all anyway. The smart creditors are helping borrowers through this period, because they recognize that receiving some money is better than a complete default.
Global correction is coming. We've been anticipating it here for a couple years now, even before we started writing. Our friends managing global funds know about are concerns. We've moved too much manufacturing to China, a country we do not get along with and one with whom we have fundamental values differences. This is a country we are going to end up in debates with over energy and food, and shots could be fired, and we've moved our manufacturing there? Country risk! I just wanted to remind you CFA folk out there of an old term that use to show up in textbooks. The key is this, when the American consumer stops spending, as confirmed again by yesterday's retail data, then layoffs are pending in retail and more poor folk are going to default on homes they should never have purchased. And spending will just get worse. That means global manufacturing economies like China will be impacted. Then, global stock markets, well inflated ones, will correct as well.
This Fed action and the willingness to act by foreign central banks shows the Fed will likely eventually go the next step in cutting rates, we hope. But when!?! In any event, Henry Paulson and Ben Bernanke have lost our confidence and should lose their jobs. We don't need cheerleaders and academics, we need honesty and action. Maybe now people will stop beating on the legendary record of Alan Greenspan and remember just how reliable he was, and how confident we were with him in charge. "
AMEN to that!
#2
mike123
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- Traders-Talk User
- 637 posts
Member
Posted 12 August 2007 - 08:04 AM
A fantastic explanation of the current market scenario courtesy of WallStreetGreek. This guy is right on the money! Bernanke should be fired for gross negligence!
"Today's Key Market News - A Good Day to Crash
Well, today seems like a good day to crash. Thanks for nothing Ben, please gather your things from your desk on your way out. The Fed's last minute action might save the day, or it may be too little too late. The time to act was on the FOMC meeting. We told you two days ago that Bernanke dropped the ball and we told you yesterday that global market correction was pending. This morning overseas boards are flooded with red. In Asia, the NIKKEI 225 dropped 2.4%, the Hang Seng slipped 2.9%, and even mainland China's CSI 300 fell 1.1%. South Korea's KOSPI tanked 4.2%, while India's BSE SENSEX 30 drifted 1.5%.
Things were no better in Europe this morning, where the DJ STOXX 50 is down 2.9%, the FTSE 100 is slipping 3.1% and the DAX is off 1.6%. Now listen carefully, things are going to get even worse. Yes, the Fed did the right thing this morning by buying $19 billion in subprime mortgage debt backed securities, but that is not going to help the people who are going to default on that debt. No, it only helps the banks and funds holding those mortgage backed investments. So, in the end, the Fed did come to the rescue of the rich hedge fund managers while leaving the mortgage holders out in the cold.
The reason things are going to get worse, after today's very possible market crash, is because of the weakened American consumer. The poor guy has been carrying too heavy a burden for too long. As if more expensive gasoline, bigger supermarket bills, adjusting higher mortgage payments and negative home equity weren't enough, now the poor guy has his credit cards calling him and raising his annual percentage rate on the slightest fault. Well, not all anyway. The smart creditors are helping borrowers through this period, because they recognize that receiving some money is better than a complete default.
Global correction is coming. We've been anticipating it here for a couple years now, even before we started writing. Our friends managing global funds know about are concerns. We've moved too much manufacturing to China, a country we do not get along with and one with whom we have fundamental values differences. This is a country we are going to end up in debates with over energy and food, and shots could be fired, and we've moved our manufacturing there? Country risk! I just wanted to remind you CFA folk out there of an old term that use to show up in textbooks. The key is this, when the American consumer stops spending, as confirmed again by yesterday's retail data, then layoffs are pending in retail and more poor folk are going to default on homes they should never have purchased. And spending will just get worse. That means global manufacturing economies like China will be impacted. Then, global stock markets, well inflated ones, will correct as well.
This Fed action and the willingness to act by foreign central banks shows the Fed will likely eventually go the next step in cutting rates, we hope. But when!?! In any event, Henry Paulson and Ben Bernanke have lost our confidence and should lose their jobs. We don't need cheerleaders and academics, we need honesty and action. Maybe now people will stop beating on the legendary record of Alan Greenspan and remember just how reliable he was, and how confident we were with him in charge. "
AMEN to that!
If Fed lower rates, Dollar will dive. That is worse.
#3
relax
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Posted 12 August 2007 - 09:45 AM
why should fed lower rates
the 10-year yield is at 4.75 versus the official rate of 5.25
and therefore doing the job of a rate cut
#4
spielchekr
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Posted 12 August 2007 - 10:14 AM
Yes, the Fed did the right thing this morning by buying $19 billion in subprime mortgage debt backed securities, but that is not going to help the people who are going to default on that debt. No, it only helps the banks and funds holding those mortgage backed investments. So, in the end, the Fed did come to the rescue of the rich hedge fund managers while leaving the mortgage holders out in the cold.
At least Fed has a good setup to lay blame on other's doorsteps, too.
#5
kaiser soze
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Posted 12 August 2007 - 10:42 AM
Vow.thats mighty interesting. Thanks for posting that article, Spiel.
Makes me wonder if this time, the powers that be actually want the market to go down for their own purposes. I mean even Paulson in his interview calmly said "risk is being repriced". On the one hand, the Fed and the ECB add liquidity (perhaps a tad prematurely) making it look that they're doing something about it while the real help which would be the role of FNM and FRC, is ruled out.
I had some thoughts on this in an earlier TT thread.
Makes me wonder if this time, the powers that be actually want the market to go down for their own purposes. I mean even Paulson in his interview calmly said "risk is being repriced". On the one hand, the Fed and the ECB add liquidity (perhaps a tad prematurely) making it look that they're doing something about it while the real help which would be the role of FNM and FRC, is ruled out.
I had some thoughts on this in an earlier TT thread.
#6
DonBart
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Posted 12 August 2007 - 10:53 AM
why should fed lower rates
the 10-year yield is at 4.75 versus the official rate of 5.25
and therefore doing the job of a rate cut
Because an inverted yield curve squeezes the banks thus creating a credit crunch like the one we have now.
In other words the FED has been and continues to be the sole cause of this credit crunch. Since they have created it they are the only ones that can stop it. That is unless their goal is to create a market crash and global recession... Hmmmm I wonder.
#7
tommyt
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Posted 12 August 2007 - 12:31 PM
how many times have we seen the fed 1 step behind when it counts?? many...there are a select few times when you can't sit on your hands and "let things play out", this is one of them. they are starting a gradual panick (oxymoron) and it will end in a washout...like big corrections/bears do..when?, is why we get paid the big bucks, or in my case small dinero.
