Posted on 02/29/2008 3:21:52 PM PST by TigerLikesRooster
Ping!
Margin calls drive down the price of good stocks, since those who need money are more likely to sell something that still has substantial value.
giving away money and no-one’s qualified to borrow it.
It maybe a GREAT time to buy!
Another ten days like this and stocks will be closer to their fair value. Not there, mind you.
"There's nothing to worry about....there is no crisis....it's only a flesh wound."
I remember a guy on here a few months ago who said that about Apple a few months ago. He won't respond now when I ask him if he really bought it.
Never buy on the way down!
giving away money and no-ones qualified to borrow it.
paging Paul Volcker.
Oh, the banks are borrowing tons of money from the Fed right now...and offloading their toxic portfolios as collateral.
All of this is partially due to Clinton and Bush pushing the idea that owning a home is the American dream.
It will be around 7500.
The hedge funds and others borrow cheap (less than 1%)and buy income and other US equities. Everything is fine unless the yen strengthens (fewer yen to buy a dollar)and then the hedge funds bail. They sell everything they have to. Today they even sold gold stocks in spite of gold being up.
Borrowed funds are the bane of the current stock market. The big players take way over half of the NYSE and NASDAQ trades and trade these in over 1 million dollar amounts. They then take computer generated derivatives and, finally, sometimes turn the whole decision making process to a program they place in their computers.
For awhile you could predict the general direction of the market by focusing on 110 yen to the dollar. When it dropped below this or 162 yen to the Euro, things began to happen. The dollar had a remakable severe and quick decline this week. Presently, you only need 103 or so yen to buy a dollar.
All of this can change direction, at least to some degree, once the selling stops. No doubt, hedge funds and other big players are going to be careful using borrowed funds. At least I hope so. When the turn comes there will be considerable short covering and a dramatic thrust to the upside.
Just from what I have read. I have no real expertise in this area.
UBS analysts estimate $600 billion of credit crunch losses
By Steve Goldstein | Feb. 29, 2008
LONDON (MarketWatch) -- Total industry losses from the financial crisis should reach $600 billion, with $350 billion coming from listed banks and brokers, UBS strategist Geraud Charpin said in a note to clients, pointing to American International Group as an example of a non-bank and broker that is suffering. The banks and brokers have only written down roughly $160 billion so far....
Dang. That low? DJIA is @ 12,266 right now. I was figuring maybe around the 10K area. But, I'm in it for the long haul. Buy something, let it double and sell half. Preserve and reinvest the principle. It's worked so far.
Real Estate is in the toilet and CD and money market rates are laughable.
No place left to invest but the stock market. I'm staying the course, although I've tried to get dear husband to let me invest in some gold to wear, but he's not buying it..:)
sw
Scoring property at a low price isn't all that bad. Interest rates are @ about 5.5%. (I was going to wait for the baby boom to bust - which seems to be right around the corner - if not now!) And my retired neighbor lives off of CD's. What are they now - 5%? It's very safe and much better than tanking especially if there's plenty of loot involved.
Gold? It's never been valued at zero. It may have been good to buy around the $350 mark. To see it go much higher from the current $975? I dunno. It may be another way to go.
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