# Prepare to get smashed - 1 trillion wiped off Wall Street



## agro (30 September 2008)

today will be interesting

maybe 10,500 support for the all ords?


what to buy?


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## DB008 (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*

I think u mean 4500 for the All Ords?

The Dow will be under 10k tonight for sure.


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## Tysonboss1 (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*

Yep this one's gonna hurt today,.... Atleast till friday.

To late to put in sell orders though,... the queue's are full of cheap sales already.


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## doogie_goes_off (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*

It does not necissarily follow that we will be smashed by close of trade, hopefully there will be some panic selling of blue chips and buying opportunities will appear. Those who sold out a few months ago and are sitting around with cash in their pockets will probably be bargain hunting by mid mornings trade, I guess the All Ords will be ~4600 at close of trade.


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## chops_a_must (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



doogie_goes_off said:


> It does not necissarily follow that we will be smashed by close of trade, hopefully there will be some panic selling of blue chips and buying opportunities will appear. Those who sold out a few months ago and are sitting around with cash in their pockets will probably be bargain hunting by mid mornings trade, I guess the All Ords will be ~4600 at close of trade.




Why would we when have many more months of companies being starved of capital first?

Not to mention divvy cuts.


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## Tysonboss1 (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



doogie_goes_off said:


> It does not necissarily follow that we will be smashed by close of trade, hopefully there will be some panic selling of blue chips and buying opportunities will appear. Those who sold out a few months ago and are sitting around with cash in their pockets will probably be bargain hunting by mid mornings trade, I guess the All Ords will be ~4600 at close of trade.




a big plunge at open can set of an avalanche though,.. we have been down the last couple of days,... must be plenty of margin loans in buffer already.

I have no cash available to buy today so I think I might just switch off, and see how we are at close.


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## doogie_goes_off (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*

Chops, the trick is to look out for the blue chips that don't need external capital, these guys usually catch the slide and you can get in for a near instant recovery. If you DYOR prior to these events then it can be quite profitable. I don't see dividend cuts for those with steady income streams who are still growing their capital. Maybe everyones eyes are a little to focussed on the financials.


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## Aussiejeff (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



doogie_goes_off said:


> It does not necissarily follow that we will be smashed by close of trade, hopefully there will be some panic selling of blue chips and buying opportunities will appear. *Those who sold out a few months ago and are sitting around with cash in their pockets will probably be bargain hunting by mid mornings trade*, I guess the All Ords will be ~4600 at close of trade.




Are you kidding? Not THIS little black duck!

Personally, I think anyone who decides to "bargain hunt" the local cess-pool while Nero and the US Congress fiddles won't be getting any sympathy from me if they get their grubby fingers burnt to the bone over the next few days....

Why would you want to gamble on the outcome of GWB's *F*inal *E*mergency *S*olution *T*o *E*ase *R*e-financing of bankrupt companies?


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## chops_a_must (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



doogie_goes_off said:


> Chops, the trick is to look out for the blue chips that don't need external capital, these guys usually catch the slide and you can get in for a near instant recovery. If you DYOR prior to these events then it can be quite profitable. I don't see dividend cuts for those with steady income streams who are still growing their capital. Maybe everyones eyes are a little to focussed on the financials.




I don't see any company growing their capital, do you?


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## doogie_goes_off (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*

There is no gamble where there is a way forward through domestic sales, there are plethora of medium sized companies to choose from. The ASX is a diversified index with plenty of places to hide!


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## chops_a_must (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



doogie_goes_off said:


> There is no gamble where there is a way forward through domestic sales, there are plethora of medium sized companies to choose from. The ASX is a diversified index with plenty of places to hide!




Lol.

Awesome. Centro is now medium sized too.

I'm gonna plonk a few gorillas on them.


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## gfresh (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*

I would still be expecting another couple of days of 7%+ falls... Today a large fall, and tomorrow again for margin selling (although not sure how many silly enough still to be on margin) to be hit at least. While there was the headline fall, 1987 was spread out over a few days. 

Greatest concern should be that the credit markets will stay frozen, and the derivatives market could collapse. That's a lot more important that what happens in the equities market.


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## doogie_goes_off (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*

Chops, you can leave you hard earned gorillas in the bank. You can support the lenders who are still doing the dodgy deals if you like and hope that they don't end up insolvent. When a cat catches a mouse it must wait then pounce if the mouse is jumped straight away it will just run. It may not be today agreed, but I will be watching for any ridiculous over selling. Tomorrow is another day.


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## Trembling Hand (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



gfresh said:


> Greatest concern should be that the credit markets will stay frozen, and the derivatives market could collapse. That's a lot more important that what happens in the equities market.




Derivatives market will not collapse the OTC market has already collapse.


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## Nyden (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*

I'll be on the prowl today looking for something hit really hard; only a small buy. Simply because I do not believe the fed will allow for over a thousand points to be wiped over a couple of days. They'll have an emergency rate cut ... or something


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## kenny (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*

As much as there might be "bargains" today. It's hard to open one's wallet to stump up and buy for me. It's really highlighted the deficiencies in my long term trading plan when I'm inclined to just hold off day after day despite supposedly compelling fundamentals of some of our smashed "blue chips".

Good luck everyone and hold one for the ride.

Cheers,

Kenny


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## BIG BWACULL (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*

:couch


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## deadset (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*

It could drop another 1.5-2% on a daily basis.

Its a tough call to say buy now or to wait another couple of days.  Maybe buy some now and keep some for later.

Tell me you sold alot of those banks in the last couple of days.


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## wayneL (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*


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## korrupt_1 (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*

The US Government has just shown the world how pathetic and incompetent they are. A bunch of wallies. Absolute garbage and the whole lot of them should be held accountable for this mess they've caused.

If this was Asia.. they'll be facing the firing squad... I’ll be the first in line to pull that trigger...

Totally irresponsible and a lack of understanding of the issues at hand.

Without this bailout (or the term 'rescue' is preferred), the US will surely head for a deep and prolong recession. What idiot can't see that? What do the people in congress have to prove by objecting to this only life line?

The ship is sinking (wall street)... you jumped ship to save your sorry little ass (acceptance that US Financials are is in deep $hit)... you are thrown a life buoy (bailout)... but because you are so dumb and pig headed (congress)... you refuse it and want to swim on your own (voted no)... there's only one outcome.. you're going to drown or get eaten by sharks... bloody idiots... 


*STOP BICKERING AMONGTS YOURSELVES AND FIX THE GOD DAMN PROBLEM YOU'VE CREATED*


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## moXJO (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*

Its a bit late for a bail out now they seem to have left it a bit to long. Not only that, but after all the time that this issue has been brewing they could only came up with a half ass plan at the last minute. I don't think sentiment would change in the current environment even if it did go through.


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## nomore4s (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*

The thing is Korrupt, I'm not sure this bail out will stop the US from going into a deep and painful recession.

And surely Wall St have to take some of the blame for thier own greed.

While not a certainty, there are signs that this could be worse then a recession.
Credit markets freezing and banks going bust is not a good sign, isn't that what happened leading into the depression?


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## korrupt_1 (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*

I'm not saying that the bailout will turn the market around and prevent a recession... but it will lessen the damage to a degree... SOME ACTION is better than none...

I'd rather try to bandage a cut arm rather than let it be. The bandage is not going to take the pain away or heal it over night... but atleast the wound won't fester and end up amputating it!!

The US needs the bailout... or else it's going to get even worse (as if it isnt bad enough!!!)


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## jaithomson (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



DB008 said:


> I think u mean 4500 for the All Ords?
> 
> The Dow will be under 10k tonight for sure.




Not according to the best Dow Jones Forecast website - 

dowjonesforecast.com of course..!


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## Tysonboss1 (30 September 2008)

Interesting opinon,..

http://www.propertyinvesting.com/newsletter/september08-update


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## rthakkar (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



Nyden said:


> I'll be on the prowl today looking for something hit really hard; only a small buy. Simply because I do not believe the fed will allow for over a thousand points to be wiped over a couple of days. They'll have an emergency rate cut ... or something




Apparently the rate cutes can now no longer make much of a difference. The Fed and other reserve banks worldwide have been flooding the market with dollar over last week... But the Bank's are too pessimistic about the future and would not let the cash flow.. 

A 100 basis points cut might help ease the pressure for a while but the troubled assets needs to be taken off the books of the bank before they can gain confidence to start lending more.


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## Spanning Tree (30 September 2008)

Bailout also has the moral hazard problem. If big banks always know the Government will bail them out when times are tough, what is stopping them from taking big risks? People need to face the consequences of their recklessness otherwise there is no incentive for prudence.


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## rthakkar (30 September 2008)

Spanning Tree said:


> Bailout also has the moral hazard problem. If big banks always know the Government will bail them out when times are tough, what is stopping them from taking big risks? People need to face the consequences of their recklessness otherwise there is no incentive for prudence.




That is why you have regulations and regulatory bodies to monitor unjust user and abuse of free market. 

Sadly though, the time for such regulations has passed. The house is on fire and you cannot debate why there wasn't a fire alarm in place before. The fire needs to be put off before any other actions

If one or two big banks were failing due to their risky portfolio, I would have been a Nay voter last night. However, this is a different crisis, it a crisis affecting the whole financial industry in the US and the world - particularly Western economies. I strongly believe the bill should have passed in favour of the bailout if it is even really a bailout. 

The financial institutes of which the assets were to be purchased from won't be making a profit. One of the last speaker in yesterdays speech mentioned - that for every $1 that the banks would have invested in bad assets last year, they would get 30c in return according to the plan.. I.e they are making a loss! but at least they are getting a buyer. 

Again Sadly enough, the common public likes playing with fire as majority opposed to the bill.


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## Smurf1976 (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



korrupt_1 said:


> I'm not saying that the bailout will turn the market around and prevent a recession... but it will lessen the damage to a degree... SOME ACTION is better than none...



Agreed there's a need to do something. However, I do think it's only fair and reasonable that the financial industry (in general) be subject to ongoing higher taxation to pay for it. They stuffed up, they pay the bills. 

So, first thing yes let's do the bailout. 

Then introduce some sort of tax on the activities of investment banks and get the money back - with interest of course.

And the third thing I'd like to see is a requirement relating specifically to infrastructure of national importance (ports, power, toll roads etc). That requirement being that in the event of financial problems of a bank etc preventing continuation of physical operations as usual, the asset simply passes straight to the taxpayer at zero cost. The bank etc takes a total loss if they can't get their act together.

Australia (or any other country) would be outright ruined if these failing investment banks had their hands on our roads, power etc and we had to bail those industries out so I do think we need protection there. Babcock and Brown has of itself cost the state government over $1000 per head of population in Tasmania alone over a single project - just imagine if it were more than one project and other states were similarly affected. We'd be outright screwed.

Reason for my somewhat negative attitude toward the whole investment banking thing is simply this. I've yet to see even the slightest bit of proof as to how the whole speculation, derivatives etc boom has benefited the real economy or the average citizen at all. All we've ended up with is a hollowed out economy and a massive bill to pay. 

Why can't we just go back to a proper economy without all this rubbish? You know, the way that pushed the US, Australia and others forward for generations rather than this new model which has seen most Western countries stagnate. That way was innovation and production, not speculation.


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## Uncle Festivus (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



Smurf1976 said:


> Why can't we just go back to a proper economy without all this rubbish? You know, the way that pushed the US, Australia and others forward for generations rather than this new model which has seen most Western countries stagnate. That way was innovation and production, not speculation.




We will eventually get back there, we might just overshoot on the way down?

The problem was that money shuffling within the fractional reserve banking systems was ever so lucrative, all the while never actually producing anything physical.

So in the middle of the biggest financial threat to the planet since the 1st Great Depression the designated drivers of the world economy have - *gone on holidays!*

Judging by some of the post here there are still some bulls left looking for a bottom bargain - no capitulation yet no matter how big the falls have been so far?


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## Pager (30 September 2008)

I find it hard to comprehend the fact that in the US this rescue package was voted down due to the Democrats making comments that it was a republican administration that caused all this mess so some of the Republicans got a hissy fit on and voted against it because the Democrats were supporting it 

Then there are the Democrats who voted against it due to low public support for a bailout and there worried they may not get re elected  

Then to top it all, with probably the worst crisis in the World since WW2 they all go on holiday  

Selfish F@cki#g Bast@rds


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## Smurf1976 (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



Uncle Festivus said:


> Judging by some of the post here there are still some bulls left looking for a bottom bargain - no capitulation yet no matter how big the falls have been so far?



I don't think the average person has any idea how serious this situation is. 

Most have now noticed the fire in the rubbish bin and can see the need to do something about it. What they're forgetting is that the rubbish bin is located in a warehouse full of high explosives. Meanwhile they're arguing about whether it's really necessary to call the fire brigade.

Bottom line is that if the drivatives bomb goes off then we're ALL going to lose in some way and the overall effects are likely to be catastrophic. And it's likely to happen so quickly that you've got no chance of doing anything about it once it's clear that it's happening. 

Better hope someone starts putting out that bin fire real soon...


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## chops_a_must (30 September 2008)

Pager said:


> I find it hard to comprehend the fact that in the US this rescue package was voted down due to the Democrats making comments that it was a republican administration that caused all this mess so some of the Republicans got a hissy fit on and voted against it because the Democrats were supporting it



Because she'd been parading around all week like a show dog, preaching bi-partisanship and then uses it to grandstand on a political motive.

Seriously, seriously dumb, bitchy move.

Don't inflame anything, get it done, then complain. 

Really immature and naive political move, and hopefully kills off any chance she has of progressing further up the chain.


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## Sunder (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



Smurf1976 said:


> I don't think the average person has any idea how serious this situation is.
> 
> Most have now noticed the fire in the rubbish bin and can see the need to do something about it. What they're forgetting is that the rubbish bin is located in a warehouse full of high explosives. Meanwhile they're arguing about whether it's really necessary to call the fire brigade.




That is an awesome summary of what is going on. I've been frustrated with many people who have been rubbing their hands in schaedenfreude (sp) glee, saying these bankers deserve it. 

While they're watching the bankers burn, they're not noticing the spark that has lit the high explosive they're standing on.


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## mayk (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



Smurf1976 said:


> Bottom line is that if the drivatives bomb goes off then we're ALL going to lose in some way and the overall effects are likely to be catastrophic. And it's likely to happen so quickly that you've got no chance of doing anything about it once it's clear that it's happening.





People are always pointing to this huge derivative bomb. But almost all the major players in derivatives have now been washed away by this financial storm. What is the effect of them? At least something should be visible from the collapse of Lehman (lemon haha) brothers? Where is the evidence? BearStearns was considered to be the pioneer of this, but still world is standing on its feet...



I frankly do not fully understand drivatives, and have a vague idea that actual loss or gain is small in these trillion dollars instruments (Just the offset differences, so small that you need really huge volume to get some profit, hence trillions of dollar).


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## nioka (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



Sunder said:


> That is an awesome summary of what is going on. I've been frustrated with many people who have been rubbing their hands in schaedenfreude (sp) glee, saying these bankers deserve it.
> 
> While they're watching the bankers burn, they're not noticing the spark that has lit the high explosive they're standing on.




 You are right there. Also there are others waiting like the looters after the storm to pick over the remains and profit from the losses of the innocent victims.


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## chops_a_must (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



nioka said:


> You are right there. Also there are others waiting like the looters after the storm to pick over the remains and profit from the losses of the innocent victims.




You mean those savers, diligent learners and conservative risk takers?


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## pepperoni (30 September 2008)

Evn if the Y2k like derivative bomb went off, 1 trillion dollars will build a new warehouse ... and a country for it to live in ... and jobs for the rebuilders .. and put food on battlers tables 

Bailout supporters are have a selfish interest at getting another 100k on retirement, knowing full well their kids will have to cough up $1m to cover it.

Ill forego my entire super if it means we cant stop selling off a future we dont even own.


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## Macquack (30 September 2008)

rthakkar said:


> That is why you have regulations and regulatory bodies to monitor *unjust user and abuse of free market*. .




Well they obviously dont work.



rthakkar said:


> The house is on fire and you cannot debate why there wasn't a fire alarm in place before. *The fire needs to be put off before any other actions*.




You do not put out a fire with gasoline.


rthakkar said:


> Again Sadly enough, the common *public likes playing with fire *as majority opposed to the bill.




The public does not like playing with fire. They are scared of people with petrol cans in their hands.


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## Smurf1976 (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



mayk said:


> People are always pointing to this huge derivative bomb. But almost all the major players in derivatives have now been washed away by this financial storm. What is the effect of them? At least something should be visible from the collapse of Lehman (lemon haha) brothers? Where is the evidence? BearStearns was considered to be the pioneer of this, but still world is standing on its feet...



It's working for now because many presumably aren't valuing their "assets" at actual market prices.

For example, they're broke if XYZ falls below $10. But there have been no trades for quite a while now so there's no up to date price as such. So they just keep using the last traded price from weeks ago - $20 - *when in actual fact if they had to sell the value is ZERO* because there are no buyers.

So they may well be broke already. It's just that they haven't updated their accounts to reflect this yet, hoping for a bailout in the meantime. Nor have they updated their accounts to reflect what they lost when some other bank went broke. (All in my opinon - I don't have firm proof of any of this).


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## IFocus (30 September 2008)

Pager said:


> I find it hard to comprehend the fact that in the US this rescue package was voted down due to the Democrats making comments that it was a republican administration that caused all this mess so some of the Republicans got a hissy fit on and voted against it because the Democrats were supporting it
> 
> Then there are the Democrats who voted against it due to low public support for a bailout and there worried they may not get re elected
> 
> ...




There is a minor problem with the package.

It wont fix the problem, the whole point is to restore confidence nothing more just trying to buy time nothing will actually change on the ground.

The package is about trying to plug holes in the dam wall but isn't about a plan for the recovery of the financial system which is what is needed.

They actually should take weeks to work through all the issues about a recovery plan..............but alas......


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## CanOz (30 September 2008)

Are you two actually trading through any of this? Other than a couple of FX trades i've done nothing buy observe and draw interest, silently hoping there is no run on Aussie banks.

Cheers,


CanOz


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## IFocus (30 September 2008)

CanOz said:


> Are you two actually trading through any of this? Other than a couple of FX trades i've done nothing buy observe and draw interest, silently hoping there is no run on Aussie banks.
> 
> Cheers,
> 
> ...




If you are asking me Can I haven't had to many trades come up for months last opportunity was short oil or the ETF USO think I threw it up on Reef, no shorts possible on the ASX and not to many short patterns in the US ATM that I like.

I am up nicely for the year so happy to like wise sit in cash and wait for a trend that I like no point getting sliced and diced in the chop been there done that unfortunately.

I think FX is the place to be as Kauri pointed out nice pattern on the AUD cross with JPY / USD


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## Macquack (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



Smurf1976 said:


> I don't think the average person has any idea how serious this situation is.
> 
> Most have now noticed the fire in the rubbish bin and can see the need to do something about it. What they're forgetting is that the rubbish bin is located in a warehouse full of high explosives. Meanwhile they're arguing about *whether it's really necessary to call the fire brigade*.
> ...




I like this analogy of the proposed bailout.


*Credit to Baer*


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## chops_a_must (30 September 2008)

CanOz said:


> Are you two actually trading through any of this? Other than a couple of FX trades i've done nothing buy observe and draw interest, silently hoping there is no run on Aussie banks.
> 
> Cheers,
> 
> ...




First buy in in months today for me.

Just on NCM. Very small amount, so not fussed. Have a lot in the kitty to splash on certain things at right times (for me) in the market.

Watching, learning and saving like mad atm.

I'll get back into doing credit spreads like I was, when I get a clear lead on something again.


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## wayneL (30 September 2008)

*Re: Prepare to get smashed - 1 trillion wiped of wall street*



chops_a_must said:


> nioka said:
> 
> 
> > You are right there. Also there are others waiting like the looters after the storm to pick over the remains and profit from the losses of the innocent victims.
> ...





Exactly!


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## Greg71 (30 September 2008)

I was unsure of which thread to put this in, but this one will do.

What would happen if the U.S. government hit the stop button and said:

"Look, this Federal Reserve thing is a load of c**p, we're kicking it out of the country and we are now creating our own currency that is produced by the government and doesn't produce debt for the country. The bill that was signed in 1914 (or whenever it was) has been removed. We're starting again like it was before that bill was signed."

George Bush.


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## chops_a_must (30 September 2008)

I would laugh at George Bush getting his name correct for starters.


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## wayneL (30 September 2008)

Greg71 said:


> I was unsure of which thread to put this in, but this one will do.
> 
> *What would happen if the U.S. government hit the stop button and said:*
> 
> ...




They would have to brainwash another nutter to assassinate the president like the last time it was mentioned.


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## gav (1 October 2008)

If 1 trillion can be wiped off Wall St in just one day, how the hell is a mere 800 billion going to fix anything?


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