7 replies to this topic

[bullshort]

I keep getting the same feeling I had on 9/11 . . . just before the first tower collapsed. Sorry to be a Chicken Little, but this stuff is not just about subprime mortgages. There's a major liquidity crisis in the making IMHO and it's likely to get a lot worse before it gets better. Read between the lines . . .

http://www.reuters.c...246263320070822

http://www.reuters.c...0070822?sp=true

[Cirrus]

It's going to impact the broader US housing market for some time. It's going to strain the consumer. It will force an easy Fed for a long time, IMO. That's unless they want a major recession. There is now a huge wall of worry building. Will the Fed allow another wall of liquidity to build behind it?

[fib_1618]

There is now a huge wall of worry building.

Yes, there is.

Will the Fed allow another wall of liquidity to build behind it?

They've already started filling the pool (again) when they didn't have to do so.

The liquidity level that's available for investment in the stock market continues extraordinary high...it's just a matter of time before the current "rip tide" comes back to shore and exerts itself once again.

Everything is fine technically. Emotionally? That's another question entirely and what separates technicians (chartists) from fundamentalists (economists and the media).

Fib

[humble1]

fine technically ? i don't think so. when you look at the daily, you see a very dangerous total retrace of the spx PLUS a minor break of the 2000 high, which found no stops of any consequence, PLUS the vicious nature of the drop PLUS churning below the 200dma PLUS a turn at exactly an eight year high. funny, isn't it that, that no one, nowhere, has mentioned that. if so, i have not seen it. now, you talk about money available for stocks: * sir, did you notice that the cash percentage levels in mf's is LOWER than at any time in history, including 2000 ? * and, believe it or not, there are OTHER places to put one's money, such as t-bills and t-bonds and bank accounts. OR to pay off DEBT ! (yes, that is the big gorilla on the other side of all this money ready to go into stocks.) * the "V" (velocity of money) in economies and markets is KEY and something of which only the social cycle economists have made any convincing explanation. regards and good trading !

Edited by humble1, 23 August 2007 - 02:03 PM.

[pdx5]

Adjustable Rate Mortgages (ARM's) are exactly what it says, adjustable! The $ volume of ARM's resets is on the increase and will peak in April 2008. Believe it or not but it tapers off rapidly after that. Must be because fewer and fewer new ARM's are being contracted due to increased stringency. So, for the next 8 months or so, expect to hear sub-prime fiasco news items in the media.

[humble1]

yes, and the problm is that AFTER the reset peak it will still take a long time for the market to clear. it will take months for people to run out of money, months more of trying to hold on, months to go through foreclosure, and months to sell the houses !

[spielchekr]

Why should MF's go to cash when fundholders do it for them? This is up over 33% in the past year and a half:

http://www.ici.org/s....html#TopOfPage

[OEXCHAOS]

And, any fund manager who wants to decrease his exposure now had TONS of reasonable options that let him or her look like they are fully invested.