Financial Meltdown (3 Viewers)

[Njja]

Problem is no one is buying.

Warren's two purchases were unique, he basically loaned Goldman Sachs &

GE money with a guaranteed 10% yearly return. Something the average

shareholder could not do. He obtained "warrents" or rights to buy preferred

stock over a period of time for a sepecific price.

If your head isn't spinning yet it should be.

Steven Bronfman pulled a similar stunt to avoid $2 Billion in Taxes when he

sold his stake in Dupont. After the sale Dupont issued him useless "warrents"

(price was higher then actual market price) so they were worthless....but

in the eyes of the tax code since he still had the ability to purchase the

shares he sold.....there was no sale.

This is why so many people are upset, there is one set of rules for you and I

another set for the "Insiders"

By the way, after Bronfman's ploy the tax code was changed to prevent this

from happening again. The $2 Billion in taxes he avoided..........gone!

 

[theBaron]

Scrooge and Marley. I'm remembering that great scene in "A Christmas Carol," when the Ghost of Christmas Past shows Scrooge how he and Marley took over the company they worked for. There was embezzlement, and directors panicked because they couldn't cover the loss or stand a public scandal. And Scrooge and Marley kept their heads, and bought them out.

 

[Rutledge]

If you had purchased $1000 of Delta Airlines stock one year ago, you would have $49 today. If you had purchased $1000 of AIG stock one year ago, you would have $33 today. If you had purchased $1000 of Lehman Brothers stock one year ago, you will have $0 today. However, if you had purchased $1000 worth of beer one year ago, drank all the beer, then turned in the aluminum cans for recycling, you would have received $214 today at redemptions.

Hmmmmmmm

 

[vandilay]

If you had purchased $1000 of Delta Airlines stock one year ago, you would have $49 today. If you had purchased $1000 of AIG stock one year ago, you would have $33 today. If you had purchased $1000 of Lehman Brothers stock one year ago, you will have $0 today. However, if you had purchased $1000 worth of beer one year ago, drank all the beer, then turned in the aluminum cans for recycling, you would have received $214 today at redemptions.

Hmmmmmmm

looking at the market today [down another 7% I think in the US]
beer is looking even better ,its just past 9 in the morning here so
I think I might give it an hour or two mind you

 

[Njja]

I'm thinking market is going to level off around 7500 lets see.

Problem is they wanted the public scared to push the Bailout through.....

now the public is in a state of panic and market is crashing.

Once investor confidence is shattered you may never get some of these

people back in.

Ford at $2 GM at $4 what is it 1920?

 

[Gideon]

I'm thinking market is going to level off around 7500 lets see.

Problem is they wanted the public scared to push the Bailout through.....

now the public is in a state of panic and market is crashing.

Once investor confidence is shattered you may never get some of these

people back in.

Ford at $2 GM at $4 what is it 1920?

I was listening to some "expert economists" talking saying that the bottom should be about mid 8000's. Guess they're experts.

This all makes a lot of sense to me.

The dot com bubble was a bubble and was basically bailed out by printing more money. So, heading back to 1994-1996 levels seems about right.

This is all such an illusion and slight of hand.

I'm sad to say it but I am seriously thinking of stocking up on canned foods and subsitence type stuff just to hedge my bets on the next year ahead.

 

[OzDigger]

From what I can see the Aussie experts have thrown their hands in the air and running around saying, "I don't know why this is happening because Australia has such a good economy".

Well, it's all gone to hell in a handbasket now as foreign investors are selling off their investments downunder and bringing their money back home where they are no doubt stuffing into their mattresses.

The latest bright idea of our government was to guarantee bank savings up to a certain amount. Now of course every man and his dog is withdrawing their deposit funds that they have over that amount

 

[Njja]

I was listening to some "expert economists" talking saying that the bottom should be about mid 8000's. Guess they're experts."

Gideon:

Problem is at this point there are no "Experts"

If there were:

1. This would never have happened.

2. We would not have needed to spend $2 Trillion Dollars.

3. Someone, as in the case of Michael Milkins Junk Bonds would have sounded the alarm.

4. I think they are all looking for a place to hide.

5. I have not as yet heard one reasonable solution, or plan to restore order.

6. But am I worried, heck no Barney Frank is on the job!

7. To be "Fair & Balanced" so is the president!

8. Sort of like the Comedy Team of Bud Abbott & Joe Stalin.

 

[theBaron]

To be expert is not necessarily to be wise. It is common, though, to equate knowledge with wisdom. Wise people might have avoided the mistakes, accumulating over at least 2 decades, that have brought us to this point.

 

[Combat]

Markets react to consumer and investor confidence. Right now they are in condition red. Not much science involved in that process. They are in a panic like cattle in a stampede. Crafty investors are waiting for things to bottom out - then buy buy buy. That should start next week and the market will even out. The US government made some efforts to diffuse this situation whether you agreed with them or not, but it seems clear now that most people lack any confidence in the government based on what they have witnessed in the past few years. That's where the bottom dropped out. A complete lack of confidence in Congress and Bush. Even if they do the right thing - no one has confidence in the outcome.

 

[theBaron]

...Crafty investors are waiting for things to bottom out - then buy buy buy. That should start next week and the market will even out...

That is a very good point, and it applies to property as well. I heard no one in any broadcasts, as the housing market was crashing, say anything about anyone buying up distressed properties. But I think we will see that start, too, if it hasn't already. Look around your own hometowns to see whether it's starting.

I've also not heard it mentioned, in all of the rhetoric about mortgages and helping people afford a home, that when a property is foreclosed, the mortgagee does not want to hold the property, he wants to sell it and get as much of his money out of it as he can. Banks do not want to be real estate companies. That property is not the kind of asset that banks look for, but rather, a new mortgagor, with a new mortgage and new payments, that is a performing asset. I was a banker, that was my own experience.

 

[Spitfrnd]

I thought this New York times piece was appropriate to the doom and gloom side of the discussion here.
http://finance.yahoo.com/retirement/article/105928/Switching-to-Cash-May-Feel-Safe,-but-Risks-Remain
It is particularly interesting to note that continuing research that shows that the vast majority of stock gains come in a small percentage of days; that is the problem with market timing. Also noted is the problem with locking in your losses. The hardest thing to do when a market is falling is nothing but that is the test of nerves that distinguishes success from failure. If you think society is over, a matress may be appropriate, otherwise.....

 

[Dickbuttons]

I am waiting it out -- but as you note -- it is extremely painful. I believe my higher power is pushing me to the limits. I don't know how many more days of 500+ DJ loses, I can sanely sustain.

Dick

 

[vandilay]

I,m no expert just a concerned observer but I think this has got
Some ways to go yet [with a few dead cat bounces along the way] .

I agree there is probably some good buying Opportunties presenting themselves [Fortune favours the brave]but for now I,m stuffing the mattress.

I think any recovery is going to be a long slow process
As opposed to a quick bounce back , the rot seems to run pretty deep.

 

[Njja]

I was live most of Friday afternoon prepaired to buy, just missed my targets.

Will go live again Monday, I suspect we are nearing the bottom, and a wise

investor may have the chance of a lifetime.

 

[Dickbuttons]

I,m no expert just a concerned observer but I think this has got
Some ways to go yet [with a few dead cat bounces along the way] .

I agree there is probably some good buying Opportunties presenting themselves [Fortune favours the brave]but for now I,m stuffing the mattress.

I think any recovery is going to be a long slow process
As opposed to a quick bounce back , the rot seems to run pretty deep.

I am in total agreement -- even though my guess is no better than anyone elses'. Takes nerves of steel to buy, however. When I was growing up, they used to say -- what's good for GM is good for the country. I wonder what they'll be saying now.

Dick

 

[OzDigger]

I am in total agreement -- even though my guess is no better than anyone elses'. Takes nerves of steel to buy, however. When I was growing up, they used to say -- what's good for GM is good for the country. I wonder what they'll be saying now.

Dick

That made sense years ago when most manufacturing was carried out in the USA, but with globalisation most manufacturing is carried out in cheap labor countries like China etc. And when you combine that with foreign ownership of US companies you end up with large companies that care more about their own profit than the US economy or its people. The same thing has occurred in Australia, the UK and every other Western country.

And of course foreign ownership of property is as wide spread as foreign ownership of companies. Overseas buyers have been forcing up house prices in the US, UK and Australia etc making it harder for local people to afford decent housing. This has forced the US and Australia etc to lower house lending requirements to hold off a voter backlash.

And the result is what we see today

 

[Combat]

Up nearly a 1000 points today. "Happy days are here again..."

 

[Canadian Samurai]

Up nearly a 1000 points today. "Happy days are here again..."

Whoopee. So government once again saves the behinds of the banks and speculators who caused this mess - but who's going to bail out the common man when this shakes through the rest of the system?

 

[OzDigger]

Whoopee. So government once again saves the behinds of the banks and speculators who caused this mess - but who's going to bail out the common man when this shakes through the rest of the system?

Imo there should be more government involvement in key industries and corporations because the government is meant to represent the people. Clearly the common man is getting screwed by overpaid and corrupt business leaders that are able to walk away with millions in payouts from companies that failed largely due to their actions.