|
Korean Job Discussion Forums
"The Internet's Meeting Place for ESL/EFL Teachers from Around the World!"
|
| View previous topic :: View next topic |
| Author |
Message |
mises
Joined: 05 Nov 2007
Location: retired
|
|
| Back to top |
|
 |
Kuros
Joined: 27 Apr 2004
|
 Posted: Thu Oct 09, 2008 3:04 pm Post subject: |
 |
|
Ha ha. Christopher Hitchens!
Edit: Actually, this is pretty good. There seems to be some confusion about what anti-American means, though. Being critical of one's government is distinctly American. |
|
| Back to top |
|
|
Jandar
Joined: 11 Jun 2008
|
| Posted: Thu Oct 09, 2008 5:38 pm Post subject: |
|
|
Just so you all know the fall of the Dow from 13000 points to todays 8500 represents a total loss of $8.4Trillion.
This represents a 5 year correction.
I believe we will be Correcting to 1995 levels say hello to 5000. |
|
| Back to top |
|
|
RJjr
Joined: 17 Aug 2006
Location: Turning on a Lamp
|
| Posted: Thu Oct 09, 2008 7:33 pm Post subject: |
|
|
| Jandar wrote: |
Just so you all know the fall of the Dow from 13000 points to todays 8500 represents a total loss of $8.4Trillion.
This represents a 5 year correction.
I believe we will be Correcting to 1995 levels say hello to 5000. |
But we're not technically in a recession...  |
|
| Back to top |
|
|
Jandar
Joined: 11 Jun 2008
|
| Posted: Thu Oct 09, 2008 8:03 pm Post subject: |
|
|
| RJjr wrote: |
| Jandar wrote: |
Just so you all know the fall of the Dow from 13000 points to todays 8500 represents a total loss of $8.4Trillion.
This represents a 5 year correction.
I believe we will be Correcting to 1995 levels say hello to 5000. |
But we're not technically in a recession... |
Well yeah, that ($8.4T) ain't real money it's just credit, the real money is your own equity, I don't think property values are going to recede to 1995 levels. I don't think wages will recede to 1995 levels, I don't even think unemployment will recede to 1995 levels. Some companies may fail but other companies are prepared for this and are holding liquidity. Those companies that are over leveraged will fall victim.
If I was in the stock market today I would be looking to buy into companies that are carrying a heavy real asset portfolio with a low liability ratio and maybe some profit showing. I would stay away from high liability high profit speculating for at least two years.
If you have any control over your 401K disbursements I would avoid all foriegn funds and pull everything back to domestics, except maybe some money in Japan. For those that think the resource poor countries that appear to be holding thier own just wait a few months, see Iceland. Keep an eye on Poland it is a trailing indicator. |
|
| Back to top |
|
|
Rteacher
Joined: 23 May 2005
Location: Western MA, USA
|
| Posted: Thu Oct 09, 2008 8:13 pm Post subject: |
|
|
I haven't viewed it yet, but 60 Minutes coverage of the crisis, credit default swaps, and "the shadow market" probably lays out in understandable terms what no expert really understands ... 
http://60minutes.yahoo.com/segment/197/credit_default_swaps |
|
| Back to top |
|
|
Kuros
Joined: 27 Apr 2004
|
| Posted: Thu Oct 09, 2008 8:16 pm Post subject: |
|
|
| Jandar wrote: |
Just so you all know the fall of the Dow from 13000 points to todays 8500 represents a total loss of $8.4Trillion.
This represents a 5 year correction.
I believe we will be Correcting to 1995 levels say hello to 5000. |
Well, the market doesn't always correlate to reality.
The problem is that we don't know what the reality is. But I'm thinking if the stock market tanks any further, it'll be a great time to buy. |
|
| Back to top |
|
|
Joo Rip Gwa Rhhee
Joined: 25 May 2003
|
| Posted: Thu Oct 09, 2008 9:21 pm Post subject: |
|
|
[quote="Jandar"][quote="RJjr"]
| Jandar wrote: |
Just so you all know the fall of the Dow from 13000 points to todays 8500 represents a total loss of $8.4Trillion.
This represents a 5 year correction.
I believe we will be Correcting to 1995 levels say hello to 5000. |
Not that low it 6800 is bond value.
7500 is one very strong level of support .
6800 is another. It won't bust that level. |
|
| Back to top |
|
|
Gopher
Joined: 04 Jun 2005
|
| Posted: Thu Oct 09, 2008 9:25 pm Post subject: |
|
|
| Kuros wrote: |
| ...I'm thinking if the stock market tanks any further, it'll be a great time to buy. |
Was just thinking that myself. Buy a bundle now. Set it aside for several years, no matter what happens in the next year or two, and watch its value rapidly grow as the overall economy recovers just past that horizon? |
|
| Back to top |
|
|
Gatsby
Joined: 09 Feb 2007
|
| Posted: Fri Oct 10, 2008 1:11 am Post subject: |
|
|
The word for the day on the news is "deflation," specifically "debt deflation."
In a downward spiral such as this, the assets used to collateralize a loan can decrease in value. This can produce a vicious cycle of selling off assets, pulling money from markets and banks, to meet loan obligations.
Now, the law of supply and demand states that when there is more of something for sale, and the demand is steady or declines, the price must decline. When prices go down you have deflation; in this case we are talking about debt deflation.
This scenario was abstracted by an economist to help understand the causes of the Great Depression by the economist Irving Fisher of Yale.
| Quote: |
Fisher outlines how just 9 factors interacting with one another under conditions of debt and deflation create the mechanics of boom to bust for a Great Depression:
Assuming, accordingly, that, at some point of time, a state of over-indebtedness exists, this will tend to lead to liquidation, through the alarm either of debtors or creditors or both. Then we may deduce the following chain of consequences in nine links: (1) Debt liquidation leads to distress selling and to (2) Contraction of deposit currency, as bank loans are paid off, and to a slowing down of velocity of circulation. This contraction of deposits and of their velocity, precipitated by distress selling, causes (3) A fall in the level of prices, in other words, a swelling of the dollar. Assuming, as above stated, that this fall of prices is not interfered with by reflation or otherwise, there must be (4) A still greater fall in the net worths of business, precipitating bankruptcies and (5) A like fall in profits, which in a �capitalistic,� that is, a private-profit society, leads the concerns which are running at a loss to make (6) A reduction in output, in trade and in employment of labor. These losses, bankruptcies and unemployment, lead to (7) Hoarding and slowing down still more the velocity of circulation.
The above eight changes cause (9) Complicated disturbances in the rates of interest, in particular, a fall in the nominal, or money, rates and a rise in the real, or commodity, rates of interest.
Evidently debt and deflation go far toward explaining a great mass of phenomena in a very simple logical way.
|
http://londonbanker.blogspot.com/2008/07/fishers-debt-deflation-theory-of-great.html
Since the value of the underlying assets was artificially inflated by the economic boom, now seen to be a bubble of enormous proportions, debt deflation seems inevitable.
Debt deflation, on the most obvious consumer level, is being seen in the deflation of real estate values. And these affect banks through the devaluation of their mortgages, and mortgage derivatives. But there are much larger markets that make the mortgage bubble seem like a mere pimple, namely the credit default swap market, estimated at $62 TRILLION, and the interest default market, said to be even larger.
A CDS is backed by a corporation's collateral, but if the business value goes down or it goes bankrupt, the holder of the CDS can only collect cents on the dollar, if anything. This then pummels the holder's balance sheet, with the biggest holders being banks and insurance companies.
This suggests the problem is only partially the small investor pulling deposits out of a bank, and so the deposit insurance will not solve the problem. But surely the massive withdrawal of deposits could tip a bank over the edge. There are more fundamental problems in the larger economy.
People are losing confidence. Why? Some is panic, from watching what others are doing. But some people realize that the shell game is over, and there is no pea under this shell.
The spoken consensus is that it will take at least two or three years to pull out of this global recession. The largely unspoken fear is it could take 10, 20 years or more to fully recover.
Leaders are no longer in the global recession avoidance mode; they are in the global depression avoidance mode. Whether they succeed depends on their ability to work together.
The cost of failure is the meltdown of the larger CDS and other derivative markets, called by Warren Buffet five years ago "financial weapons of mass destruction." What would an economic nuclear winter look like? It is hard to imagine, but it would probably include numerous corporate bankruptcies, as well as national, state and local government bankruptcies as they try to do what they can to help offset the damage. And of course there would be the billions of people affected, whose lives would be shattered.
Last edited by Gatsby on Fri Oct 10, 2008 1:17 am; edited 1 time in total |
|
| Back to top |
|
|
Joo Rip Gwa Rhhee
Joined: 25 May 2003
|
| Posted: Fri Oct 10, 2008 1:15 am Post subject: |
|
|
During the Great Depression the US economy contracted by 50%
In the last quarter US GDP increased by 2% |
|
| Back to top |
|
|
aka Dave
Joined: 02 May 2008
Location: Down by the river
|
| Posted: Fri Oct 10, 2008 2:07 am Post subject: |
|
|
http://www.bloggingstocks.com/2007/08/18/the-18-trillion-unpaid-price-of-financial-alchemy/
Apparently, the bad paper amounts to 18 to 20 *trillion* dollars.
That's more than the value of the *entire* US stock market. And what's worse, the value of the US stock market is falling rapidly day by day.
Europe, as I type this, is haing another meltdown.
http://www.lemonde.fr/
I started out being relatively optimistic. However, every day brings more gloom, and I mean devastating gloom.
A line on wall street "Currently the only things investors are buying are T-bills and bottled water." |
|
| Back to top |
|
|
Gatsby
Joined: 09 Feb 2007
|
| Posted: Sat Oct 11, 2008 3:55 am Post subject: |
|
|
Now, here's an idea:
| Quote: |
Before This Hole Gets Deeper, a Break From Digging
By Steven Pearlstein
Saturday, October 11, 2008; D01
Remember the Rule of Holes: When you find yourself in one, the first thing to do is to stop digging....
The top priority ought to be on setting up a new clearinghouse for those credit-default swaps that everyone's heard about but few understand. The swaps are essentially insurance policies -- in this case, insuring against the possibility that a particular loan or bond or tranche of an asset-backed security will default. But unlike real insurance companies, the hedge funds and investment banks that wrote these policies were largely unregulated and were not required to set aside any reserves in case they were required to pay up. The big fear now is that when those defaults start to roll in, as they almost surely will, the "insurer" will be broke.
The Federal Reserve is already working on launching a clearinghouse. It would offer the advantage of finally bringing credit-default swaps out from the shadows and into a regulated marketplace where they can be standardized, traded and priced in a way that everyone can see. More important, to gain access to this marketplace, buyers and sellers could be required to pay into a reinsurance fund that could be tapped in the event that one of the "insurers" can't make good on its policies. And until the market has been around long enough for that re-insurance fund to build up a sufficient reserve, the Fed might have to finance it with a sizable loan.
The logic is simple: better to have the government bail out the CDS market, and finally bring it under government regulation, than be put in the position of having to bail out a dozen more AIGs out of a fear that their failure would also take down the CDS market. |
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/10/AR2008101003147.html?hpid=topnews
This just might work.
Why is there panic?
The underlying fear is the dreaded "meltdown," which is code for the failure of the CDS and derivative markets through a domino effect. If you break the domino chain with insurance, you just might solve the problem.
Paulson, with his panic pressure tactics, didn't have the brains or imagination to think things through to the real problem.
But with this idea there is hope that we can avoid the financial nuclear winter. |
|
| Back to top |
|
|
Kuros
Joined: 27 Apr 2004
|
| Posted: Sat Oct 11, 2008 5:24 am Post subject: |
|
|
| Gopher wrote: |
| Kuros wrote: |
| ...I'm thinking if the stock market tanks any further, it'll be a great time to buy. |
Was just thinking that myself. Buy a bundle now. Set it aside for several years, no matter what happens in the next year or two, and watch its value rapidly grow as the overall economy recovers just past that horizon? |
Yes, but I'd look at newer companies or established and emerging green tech.
Some of the best performing stocks of the Oughts have been oil stocks and private health care. That won't be the case during the Teens. Big Pharma might remain a good purchase, though. |
|
| Back to top |
|
|
bucheon bum
Joined: 16 Jan 2003
|
| Posted: Sat Oct 11, 2008 8:58 pm Post subject: |
|
|
| GE hasn't been this low in years. Just read Warren Buffet bought a bunch of its stock. Given the fact it is established and involved in green, I'd say it would be a great buy right now. |
|
| Back to top |
|
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
FAQ
Search
Memberlist
Usergroups
Register
Profile
Log in to check your private messages
Log in
