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Dr Doom - Correction to be 30%

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Hmmm, odd, if someone is worth a paltry 300 million they are not worth listening to?

What if they are worth 9b?

George Soros alarmed an audience in Singapore this week by claiming that 'the soft landing (for the US economy) will turn into a hard landing. That's why I expect the recession to occur in 2007 not 2006.'

He went on to explain that the slowing US housing market would be the factor that finally tripped the economy into recession, albeit not until 2007. Of the Federal Reserve and interest rates he commented:
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http://www.ameinfo.com/75420.html
 
nizar said:
Remember what Marc Faber said about the gold price? ;)

Oh yeh -- he never put a time frame on that -- so i guess he can never be wrong -- just early ;)

Yeh Marc Faber got the 1987 crash right, he got Asian Crisis right and he picked the Commodities boom correctly, but how many calls between all those were wrong?

But then again no remembers when he got it wrong ;)

And $300million is nothing.
Read this article
http://www.dailyii.com/article.asp?...040590&stage=True&zonZoneID=156&pagPageID=218

Paul Tudor Jones manages $5.3billion. James Simmons about the same.
Daniel Loeb $3.8billion.
Steve Cohen about $4billion.
Jerry Parker $1billion.


Even local guys like Kerr Nielson manage several billions (is it about $10??).
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The bulls are all missing the point.

Are the points real? Do they make sense? Are your reactions to it emotional or logical?

Who cares about the petty disparaging nitpicking points. It's not a dick measuring contest. It's all information and a point of view you ignore at your peril.

It's starting to sound like CNBfreakinC in here! :banghead:
 
Bearish propaganda always sounds intelligent during market declines. It's okay to be cautious in this correction, but I really don't see reason to hide in bomb shelters just yet (...at least until the some major trendlines get broken in the all ords).
 
wayneL said:
Another emotional dis... you don't think the bulls make full use of propaganda?

SHEEEESH!!!!!
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Agreed, but are we talking propoganda or financial fundamentals. The fundamentals say we have been living and trading on too much credit and now we have a very large and growing margin call.

If we are to use the All Ordinaries as a yard stick, we have problems. To """know""" as Warren Buffet chants, we need to measure all the information we can get our hands on.
 
explod said:
Agreed, but are we talking propoganda or financial fundamentals. The fundamentals say we have been living and trading on too much credit and now we have a very large and growing margin call.
If we are to use the All Ordinaries as a yard stick, we have problems. To """know""" as Warren Buffet chants, we need to measure all the information we can get our hands on.
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lol, now thats a good analogy.
While I'm generally a bull, I think there are some serious underlying problems based around the use of free and easy credit. It may not fully blow up this time but I think it is a good warning sign to get prepared.

It is becoming apparent the the Central banks are worried about the situation with the way they have made money available to the banks and just how much they have made available. The more I learn about how the banks create credit and how the CBs operate the more concerned I am about what happens when it does all blow up.

How long can it all be swept under the carpet for?
Surely there will come a time when some of this credit needs to be paid back?
 
wayneL said:
The bulls are all missing the point.

Are the points real? Do they make sense? Are your reactions to it emotional or logical?

Who cares about the petty disparaging nitpicking points. It's not a dick measuring contest. It's all information and a point of view you ignore at your peril.

It's starting to sound like CNBfreakinC in here! :banghead:
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Exactly, no refutations of the arguments presented by Faber just the usual platitudes about how he got it wrong sometimes.

Since when does how much money someone manage help them to pick major turning points in the market?

Incidentally if I managed to get just 3 calls right in my life and they were as significant as the 1987 crash, the Asian crisis and the commodities boom I'd not only be very happy but very rich.
 
Agentm said:
'Clearly, something is amiss in the markets that few in our strategy, if anyone, have experienced before.'

maybe,,

but is it as big as people make out.. berknanke said 50 - 100 billion, only 1% of US motgages.. tops.. and he should know..

storm in a tea cup until reality checks come into play.. IMHO
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well the US market thinks it's a little more then a storm in a tea cup and that's our direct reality!
 
dhukka said:
Exactly, no refutations of the arguments presented by Faber just the usual platitudes about how he got it wrong sometimes.

Since when does how much money someone manage help them to pick major turning points in the market?

Incidentally if I managed to get just 3 calls right in my life and they were as significant as the 1987 crash, the Asian crisis and the commodities boom I'd not only be very happy but very rich.
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Totally agreed.

And since when does the amount someone is worth equate to their success? That's the sort of crap that has our society rooted. I'm pretty sure I'm more successful in life than Paris Hilton for instance.

But the amount someone is worth; the amount of paper someone has on a wall; the size of a person's cheer squad, has no positive correlation to a person's skill in comparison to a peer, nor does it change the validity of the person's opinion.

I've been a bull since I've been back in the market, but his calls are consistent in comparison to other bears. And in large, I find it very hard to dispute some of his arguments. The simple fact is, what central banks are doing now is incredibly bad for the ordinary person, which is what the strength of the economy hinges on.

The other thing to take into account is the potential decoupling of the markets between the east and west (as faber points out), and what that means for a market like Australia. Eventually this has to happen, but how long will it take? Who knows? But given materials have fallen further than financials, it gives you some idea of the current rationale...
 
chops_a_must said:
Totally agreed.

And since when does the amount someone is worth equate to their success? That's the sort of crap that has our society rooted. I'm pretty sure I'm more successful in life than Paris Hilton for instance.

But the amount someone is worth; the amount of paper someone has on a wall; the size of a person's cheer squad, has no positive correlation to a person's skill in comparison to a peer, nor does it change the validity of the person's opinion.

I've been a bull since I've been back in the market, but his calls are consistent in comparison to other bears. And in large, I find it very hard to dispute some of his arguments. The simple fact is, what central banks are doing now is incredibly bad for the ordinary person, which is what the strength of the economy hinges on.

The other thing to take into account is the potential decoupling of the markets between the east and west (as faber points out), and what that means for a market like Australia. Eventually this has to happen, but how long will it take? Who knows? But given materials have fallen further than financials, it gives you some idea of the current rationale...
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Chops.
Maybe its a misunderstanding on my part, but i thought $300million was the size of the fund that Marc Faber manages.
As for his worth, i got no idea.

Those other traders and their billions (in my previous post) were funds UNDER MANAGEMENT, not how much they are worth.

Paris Hilton could in fact be a champion trader that cleans up the markets. Dont let the media fool you ;) ;)
 
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/11/cnfsa111.xml

As the onion is peeled, it gets more rotten the further you get. As this article implies, there could be some more headline grabbers to come. There are rumours that Goldman Sachs may have some bearish surprises in store. SOURCE

FSA acts as crisis engulfs banks

By James Quinn, Business Correspondent
Last Updated: 12:08am BST 11/08/2007

The Financial Services Authority has moved to prevent potential systemic losses in the banking system by ensuring banks are not dangerously exposed to the growing credit crunch.

It follows a move by the US Securities and Exchange Commission, which has begun checking the books of some of the world's largest investment banks including Goldman Sachs and Merrill Lynch, to ensure that they are not attempting to hide sub-prime losses.

The moves come amid reports that Bear Stearns had asked lawyers to investigate two collapsed hedge funds linked to risky home loans.

The FSA is talking to banks about the markets to ensure that it is aware of any worrying exposures to sub-prime and leveraged markets.

It is understood the firm's supervisory teams have been paying particular attention to banks' liquidity levels and credit ratios.

A FSA spokesman said: "The relatively benign economic conditions of recent times have left the major financial institutions we supervise well capitalised, but we are in constant dialogue with them to ensure that they are vigilant with regard to the risks inherent in tighter and more volatile markets."

Investment and mortgage banks across the globe are bearing the brunt of the heightened credit crunch as losses mount on both sides of the Atlantic amid worsening liquidity problems.

FSA acts as crisis engulfs banks

As markets tumbled for a second day, a global search began to find the victims. Leading the list was American mortgage lender HomeBanc Corp, which filed for Chapter 11 bankruptcy protection two days after saying was to sell its assets to rival Countrywide, America's biggest home loan provider.
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HomeBanc has assets of $5.1bn (£2.52bn) and debt of $4.9bn. Its unsecured lenders include JP Morgan, Commerzbank and BNP Paribas.

Countrywide itself warned that demand for new mortgages had dried up and it shares dived 14pc in the first hour of trading, after admitting there are "unprecedented disruptions". The mortgage lender has already slashed its profit guidance for the current year by 33pc after admitting defaults in sub-prime mortgages had risen sharply.

Rival NovaStar Financial, which has had to raise $150m (£75m) to stay in business, posted a $50m quarterly loss after writing down home loans on its books.

German banks also came under scrutiny, with regulator BaFin confirming it is looking into a $17.5bn asset-backed securities vehicle, part of state bank Sachsen.

Banks with exposure to the leveraged and sub-prime mortgage market saw billions of pounds wiped off their shares on both sides of the Atlantic. In the UK, mortgage bank Northern Rock's shares fell 9.57pc, while Barcaly's market value fell more than £3bn. Hedge fund manager Man Group tumbled for the second day - off 9.11pc - on talk that it is set to postpone a fund launch in New York.

On Wall Street, Goldman Sachs was trading down 2pc at $178.56 a share at lunchtime, Credit Suisse was off $2.75 at $80.85 and Lehman Brothers shed 2.46pc to $58.67 amid suggestions it has a significant sub-prime exposure.

Panmure Gordon analyst Sandy Chen said the major risk for banks with large asset-backed commercial paper exposures was a reduction in liquidity could lead to impairment charges.

He estimates Barclays is the most exposed at £20bn-25bn, then HBOS with £20bn and HSBC with £15bn.
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Just an observation of the financial system and capitalist and free markets as a whole. Correct me if i'm wrong but isn't the theory that these markets are set up so as to correct themselves when imbalances occur (thus the saying that any regulation is negative). Thus isn't the injection of money by central banks counteracting the natural resetting of the finacial system that the credit crunch would in itself solve once it had run its course. Is the interferance by central banks in fact leading to even more imbalance in the system (that is aside from their role in controlling inflation). Just the way i am seeing it at the moment.
 
billhill said:
Just an observation of the financial system and capitalist and free markets as a whole. Correct me if i'm wrong but isn't the theory that these markets are set up so as to correct themselves when imbalances occur (thus the saying that any regulation is negative). Thus isn't the injection of money by central banks counteracting the natural resetting of the finacial system that the credit crunch would in itself solve once it had run its course. Is the interferance by central banks in fact leading to even more imbalance in the system (that is aside from their role in controlling inflation). Just the way i am seeing it at the moment.
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Bill,

You are absolutely right of course. You can make exactly the case against the triggers set up in the US stock market designed to kick in and halt trading when they fall too far.

The idea of 'free markets' is one of the favourite catch-cry's of western elites however you can be sure when free markets don't do what they want them to they will intervene.
 
The size of the correction?Impossible to speculate with the unknown damage that has been done through the sub-prime market worldwide.There is one undeniable fact-the central banks and reserves are injecting liquidity because they know there is a major problem.
 
There are a lot of theories to support a lot of different arguments, but in the end, what does it matter?
As we watch the 'massive falls' in the market doesn't it seem plain and simple? There are Bargains to be had.
I am certainly not an 'expert' but as far as I'm concerned MBL @ sub $75, RIO @ sub $85 etc etc, there are great value buys everywhere.
After all - if this really is the big 'correction' won't history repeat as it always does and exceed previous highs....? :2twocents
 
ZacR said:
There are a lot of theories to support a lot of different arguments, but in the end, what does it matter?
As we watch the 'massive falls' in the market doesn't it seem plain and simple? There are Bargains to be had.
I am certainly not an 'expert' but as far as I'm concerned MBL @ sub $75, RIO @ sub $85 etc etc, there are great value buys everywhere.
After all - if this really is the big 'correction' won't history repeat as it always does and exceed previous highs....? :2twocents
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Stock prices mean nothing if they go out of favour, as they inevitably do in the last phase of the economic cycle. Cash will be king.

Cheers,
 
there`s a lot of BS here.

what I want to hear from some-one is:

what are the global fundamentals - are they good enough that the subprime stuff will be forgotten in 6 months time?

is anybody capable of giving a reasoned appraisal?

I wonder if you actually have websites that give a generally trustworthy view of the economy?

thanks:cool:
 
ZacR said:
After all - if this really is the big 'correction' won't history repeat as it always does and exceed previous highs....? :2twocents
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True but after 1929 it took 30 years to get back to breakeven in terms of the index ;)

30 years @ cash rate (risk-free) compunded is a fair bit ;)

I know which one id prefer ;)
 
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