Posted on 09/23/2010 5:52:36 PM PDT by WebFocus
torm clouds are gathering over Wall Street again.
Summer is never a hot time for trading volume, but this year was particularly ice cold, given fears about the economy and uncertainty over financial regulation. So this year, bankers are girding for a punishing third quarter that could result in firms slashing jobs ahead of plunging profits -- a fact that could spell gloom for the wider New York economy.
"As a result, The Street, which had begun staffing earlier this year in preparation for a stronger recovery than the lackluster one we are currently experiencing, may be somewhat overstaffed if [sluggish] capital markets activity continues to persist."
Many analysts and a number of major investment banks are beginning to recast their earnings estimates for the next several months after capital markets -- usually a big driver for revenue at Wall Street firms -- stalled this summer.
Already firms such as Deutsche Bank, which employs thousands of bankers in the New York area, are warning investors that third-quarter earnings are headed south.
Yesterday, Deutsche Bank, which is planning to sell more than $13 billion worth of shares, said it expects to post a third-quarter loss on a 30 percent decline in equity trading.
"Investors remain nervous and uncommitted in the absence of clear market direction," the bank said in a statement.
Echoing that sentiment, boutique investment bank Jefferies & Co. issued a similarly gloomy statement, noting that its equity and debt sales and trading activity in the third quarter were "painfully slow," plunging 51 percent to $273.1 million, compared to the prior period.
At the same time, Deutsche Bank analyst Michael Carrier took an ax to earnings estimates for Morgan Stanley and Goldman Sachs.
(Excerpt) Read more at nypost.com ...
It’s hard to feel sorry for these millionaire Wall Street tycoons.
They gave money to liberal Democrats and liberal Democrat campaigns.
Now that their monster is eating them, they’re crying.
Most investors aren’t really buying or selling in the stock market now (not even Institutional Investors are trading that much ).
Most of the volume you see the past 6 months come as a result of Computerized Algorithmic Trading (AKA High Frequency Trading).
I don’t think you comprehend the deeper message here. The guys that are being interviewed in this article are the ones who are running and influencing how people’s retirement and investment accounts perform (among other things).
Since there is well over $6 Trillion Dollars worth of cash tied up in these accounts, an amount that represents one of the last large chunks of money that “The Feds” have not seized or stolen yet, you might want to consider what they are saying in this article and try to absorb some of the long term implications.
I’d like to know what people are doing with their 401ks. If you’re locked into mutual funds, bonds or money market, where do you put your money? Can’t take it out and buy durable goods or President Wartface and his warthogs in the IRS will take over half in taxes, which won’t leave me enough to buy anything worthwhile. My 401k doesn’t offer precious metals. Stocks are going to cliff dive again soon, but they say bonds will too. Money market? What if the dollar jumps off the roof? Should I just kiss my entire 401k goodbye and quit adding more to it?
‘swhy I got out of stocks and moved to bond funds.
Pimco Total Return Fund is doing over eight percent right now. I’ll take all of that I can get.
Here are a couple of ideas I am thinking about. This is NOT advice and other may have some better suggestions.
Other countries are doing better than the U.S.. We are headed to Zimbabwe because we have an isl*mo-marxist from Kenya. I blame idiots who watch TV for electing him. If you pay for cable or sat TV folks - you are supporting them.
Anyway - getting retirement plans out of dollars may be a big deal. Alternatives are Canadian or Aussie dollars.
http://www.everbank.com/001CurrencyCDBasket.aspx
This bank does foreign CDs. I like the one in 25/25/25/25% Aussie, Brazil, Norway and Canada. The six month CD is yielding 2.5%. Currencies that have energy and mineral resources are usually the best.
So a person with a 401K would have to roll some of it out and into an IRA. This bank probably does IRAs but check the fees.
Another option is set up a CD with an online brokerage that has foreign securities and funds offered. eTrade and Interactive Brokers are two. Maybe TD Ameritrade because they are owned by Toronto Dominion bank. They can also help you roll some money from the 401K to an IRA. Also call Schwab and Fidelity.
Maybe find a global ETFs denominated in Canadian or Aussie dollars. here is a list:
http://etf.stock-encyclopedia.com/category/etfs-listed-in-canada.html
So you can see iShares has Canadian denominated ETFs. So you could buy say 5 of them. Energy, 5% in gold one, MSCI EAFE Index which is most of Asia, Dividend Index fund and maybe Composite Index Fund.
Call those online brokerage firms and as them. If the US dollar tanks - the Canadian and Aussie dollar should do better. The stocks in the ETFs you want maybe 40% US and 60% outside the US but the fund has to be denominated in Canandian or Aussie dollars or Swiss francs.
I am just throwing out ideas. Call those online firms and ask them.
“So who’s enabling this big government?”
Idiots who watch TV and have cable or sat TV. Each network (6) gets about $5 a month from your bill. They all support O and Islam and their Saudi shareholders, investors or joint venture partners.
They control TV. Watch it and pay for it - you support it.
Fox is only marginally better and their largest individual shareholder is the saudi king’s nephew. ALL TV is bad.
QUOTE OF THE CENTURY.......MAYBE EVEN THE MILLENNIUM
Some people have the vocabulary to sum up things in a way you can understand them.
This quote came from the Czech Republic. Someone over there has it figured out.
“The danger to America is not Barack Obama, but a citizenry capable of entrusting a man like him with the Presidency. It will be far easier to limit and undo the follies of an Obama presidency than to restore the necessary common sense and good judgment to a depraved electorate willing to have such a man for their president. The problem is much deeper and far more serious than Mr. Obama, who is a mere symptom of what ails America. Blaming the prince of the fools should not blind anyone to the vast confederacy of fools that made him their prince.”
“The Republic can survive a Barack Obama, who is, after all, merely a fool. It is less likely to survive a multitude of fools such as those who made him their president.”
October approaches...
many have
First of all, I don’t have a TV.
Second of all, if you’re just going to argue for the sake of arguing, I’m done.
No you’re not.
RE: October approaches...
Yes October looms and for some reason, crashes usually occur during this month.
But Let’s take a closer look at events unfolding now, and the best steps you and I can take today to protect ourselves.
Under intense pressure to generate immediate cash flow to shore up a virtually bankrupt U.S. Treasury, federal regulators are systematically destroying, seizing, and otherwise transferring to federal control trillions of dollars in private assets. The all-but-certain impact on our currency, on your purchasing power, and on your standard of living could be both sudden and devastating.
Obama & Co. spent recklessly to gain controlling interests in the titans of the U.S. banking, insurance, and auto industries. At one point, Mr. Obama chortled in front of C-Span cameras –
“We are out of money now. We’re operating in deep deficits...”
For months we were told that the full impact of Obama’s bailout would come to oh, no more than $787 billion. Then the independent Congressional Budget Office checked the math and found that just this first bit of “Obamanomics” will, in fact, bloat deficits by $862 billion. But even that is just the tip of the iceberg of what’s already been spent or committed.
Major foreign investors such as China are quickly catching on to the hard reality of burgeoning U.S. debt and our impending insolvency. They see that we are out of moves, and are coming to the inescapable conclusion that the only way Washington can keep its Ponzi finances going is to run the monetary printing presses non-stop.
The dollar has already surrendered fully a third of its value relative to other weakening world currencies in less than a decade. This and other facts lead inescapably to the conclusion that Western economies and markets will shrivel relative to those of ascendant countries in Asia.
A massive, catastrophic dumping of the devaluing U.S. dollar looms large like a dagger over our heads. The upshot is – if you don’t immediately begin taking basic precautions with your money, you stand a good chance of acting too late and getting caught with your britches down.
U.S. public and private debt now amounts to nearly four times the gross domestic product. In the midst of the Great Depression, total debt topped out at just three times GDP. That suggests the current financial crisis could be even more severe in magnitude and length.
So it should come as no surprise that Standard & Poor’s quietly reported last year that Treasury bonds are poised to lose their AAA-rating because of the way Washington is indulging in emergency cash creation and massive spending.
Lest there be any doubt over the reliability of the warning from S&P, Moody’s Investors Services issued the identical warning on February 3, 2010. When Moody’s and S&P both cast a dark shadow over the safety of hallowed U.S. Treasuries, any investor, taxpayer, and regular American citizen ought to sit up and take notice.
Yet when asked by ABC News to share his own views on Moody’s latest warning of a coming downgrade in U.S. Treasury ratings, Treasury Secretary Timothy Geithner predictably replied: “Absolutely not. And that will never happen to this country.”
If you believe that happy talk, I have a bridge to sell.
Financially, the U.S. is on a Road with No Turns
Global worries about the debasement of the dollar are quite VALID.
Massive expansion of the money supply at the end of the Bush administration has been eclipsed by even more massive dollar-printing by the Obama administration. With U.S. economic output stagnant, massive inflation is inevitable as the Federal Reserve and the politicians try to prop up the economy with loose money.
In short, the United States is attempting to print its way out of debt and recession. And that means the value of the dollars you hold is destined to go down significantly.
The Smart Money Stampede Out of the Dollar Has Already Begun
If you’ve already heard a little voice in your head warning you that Wall Street paper assets are highly-manipulated certificates of financial folly, you are right.
While rampant money creation may force the DOW upward in nominal terms, the DOW index itself has been collapsing against the value of hard assets for some time.
For example, it currently takes barely 8 ounces of gold to buy a share of the DOW industrials. Yet as recently as 1999, it took 44.8 ounces of gold to buy a DOW share – that’s a whopping 80% crash in the real value of the DOW.
The money magicians in Washington can fool millions of investors in the short-term, true. But they can’t fool those who measure their wealth in terms of precious metals, which retain their value over time. Gold is the mortal enemy of big government borrow-and-spenders. When the gold price shoots up, it signals to the world that the currency upon which government Ponzi finances operate is losing value.
What I believe, we need to know about and engage in is TRUE DIVERSIFICATION – among currencies, stock markets, Financial instruments, commodities, and precious metals which are not tied directly to the sinking dollar.
Yes, most brokers recommend investment in many sectors of the U.S. economy but this is of little value if ALL your investments are tied to a declining dollar.
Sadly, millions of Americans will be impoverished by the coming dollar devaluation. But you can be one of the select few who survive and even prosper in these wildly turbulent times.
Yes, You Should Own Some Gold – But Gold Alone Won’t Be Enough. We ought to Learn to follow critical gold-to-silver ratio like the highest rollers do, and you too can position yourself to maximize gains in the precious metals sector.
We also ought to diversify into commodities based currencies. I currently own Aussies and Canadian Dollar accounts.
Interesting info there, WF. However, I’ve never really thought it wise to invest in the stuff they pave streets with in heaven.
Another opinion for your reference :
TITLE : It Is Not A Matter Of If With Hyperinflation, But When
Read more: http://www.businessinsider.com/marc-faber-hyperinflation-2010-9#ixzz10PT58DCG
EXCERPT
ABOUT THE INTERVIEWEE:
Born in Zurich, Switzerland, Dr. Marc Faber went to school in Geneva and Zurich and finished high school with the Matura. He studied Economics at the University of Zurich and, at the age of 24, obtained a PhD in Economics magna cum laude.
Between 1970 and 1978, Dr. Faber worked for White Weld & Company Limited in New York, Zurich and Hong Kong and, since 1973, has lived in Hong Kong. From 1978 to February 1990, he was the Managing Director of Drexel Burnham Lambert (HK) Ltd.
Dr. Faber’s best selling book Tomorrow’s Gold – Asia’s Age of Discovery has been translated into Japanese, Chinese, Korean, Thai and German. Dr. Faber is a regular contributor to several leading financial publications around the world.
Dr. Faber, who is an investment adviser and fund manager associated with a variety of funds, is a member of the Board of Directors of numerous companies around the world.
HRN: It seems the US is moving towards more government intervention into the free market rather than less.
Dr. Marc Faber: Yes. That’s why I’m very negative about economic growth in the US. It just won’t happen. Can the US economy grow at 2% per annum or, in the best case scenario, at 3% per annum with current policies? Yes, but it will create a lot of distortions. The best case for an economy that goes into a boom phase, in other words over consumption, is to bring it back into the trend line as quickly as possible. So when you have an excursion into a boom, what you need is a cleansing of the system and that may take a few years to happen in the US because the excesses were built up not just in the last 7 years between 2000 and 2007 but, over the last 25 years. So, to really bring the US back into sanity—into a healthy mode where the economy can grow—might take 5 to 10 years, but it won’t happen under the Obama administration.
HRN: Given the poor prospects for US economic growth, do you foresee a flight of capital from the United States?
Dr. Marc Faber: You would be out of your mind, with health care reforms and with the government interventions and the uncertainty about future taxes in the US, to even consider expanding in the US and this is a problem. I mean people say that loan demand is down because banks are not lending, but maybe nobody wants to borrow any money in the US and nobody wants to expand in the US but they are expanding in China, India, Vietnam, Bangladesh, Africa and Brazil. The business world is an international place today, and if you run a corporation, whether you employee 50 people or 10,000, you can choose where you invest your money in terms of capital spending. Where do you want to expand factories? If I employed people in the US, I would rather think of reducing the 50 employees maybe to only 20.
HRN: Where should American investors put their money?
Dr. Marc Faber: Different people have different investment objectives but I made a presentation recently where I showed, that in terms of goods markets, the emerging world is now larger than the developed world and so I think people should have at least 50% of their money in emerging economies. With interest rates at zero and with the prospect that they will stay at zero, or below zero in real terms for a long time, I think cash is not particularly attractive. I think US government bonds are unattractive in the long run, although they may be attractive for the next three months. I would recommend to people to accumulate precious metals and invest in a basket of shares in emerging economies.
HRN: Are you saying you would consider buying gold even at today’s prices?
Dr. Marc Faber: Yes, I keep accumulating gold although in the next three months it may go down and not up, but maybe it won’t go down. To me, it doesn’t really matter if it goes down by 10% or 20% or whether it stays where it is. I think if in case gold came down 20% it would be because tightening of global liquidity and, in that scenario, equities wouldn’t do particularly well either.
HRN: You mentioned that cash is not attractive. What are the prospects for the US dollar?
Dr. Marc Faber: The dollar has been relatively weak in the last few years. It’s just that the other currencies are not much better. There has been a tendency for the dollar to weaken and certainly it has weakened against the price of oil, against the price of precious metals and raw materials and it’s lost its purchasing power. There is no question about the fact that, today, if you have $100,000 you can buy less than 10 years ago or 20 years ago. Just look at the housing market. It has come down somewhat but a house is much more expensive than in 1980.
HRN: Can you comment on inflation versus deflation?
Dr. Marc Faber: In this whole inflation and deflation debate investors have to realize that in a system—say you have a room like this and then the money is dropped from helicopters into this room, it can flow into real estate; it can flow into equities; it can flow into precious metals; it can flow into the art market or it can flow out into other currencies or into commodities that the Federal Reserve doesn’t control. They only control essentially how much money they will drop from the helicopters.
HRN: Is this an example of why central planning of the economy by the Federal Reserve isn’t effective?
Dr. Marc Faber: Yes. Exactly.
HRN: Do you think hyperinflation in the US is possible?
Dr. Marc Faber: The Federal Reserve doesn’t want to create a hyperinflation. I mean Mr. Bernanke may be incompetent, but he’s not an evil person per se. He just doesn’t have sufficient knowledge to be a central banker, in my opinion, and has misguided economic theories, but he’s not evil in the sense that he would not wish to debase the currency entirely. Clearly, if the US economy moves into a double dip recession and you have deflationary pressures reappearing, in the housing market, for example, and if the S&P drops from roughly 1,100 down to say 900, then I think further monetization will happen. I believe that because of the unfunded liabilities and the deficits of the US government, which will stay high for a long time; sooner or later there will be more monetization anyway.
It’s more a question of when it will happen rather than if it will happen. For sure it will happen but will it happen right away, say in September, or maybe only in two years time? Eventually, before everything collapses we’ll have an inflationary bout which may not be so strongly felt in consumer prices, as in stocks or housing or precious metals prices or in commodities like oil; or inflation could occur mostly in foreign currencies, in other words, in Asia where the currencies could appreciate.
Read more: http://www.businessinsider.com/marc-faber-hyperinflation-2010-9#ixzz10PUMjKB8
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.