"MAY … end of Q2 for Goldman
I expect now a correction of the oil price and a bit of recovery for the equities
Just a what if .................. what if the cake was made from TUNA or perhaps KINGFISH , both can be eaten and are worth their weight in gold .
Oh Crikey we'd have to Schnapper out of it !
JPMorgan Chase CEO James Dimon says banks will suffer more from the recession than from the subprime debacle itself.
nvestment banks have written down tens of billions of dollar so far, but the worst is not behind us yet, Dimon says. Banks will be hit harder as the recession unfolds.
"The recession is just starting,” Dimon told an audience at the UBS AG financial services conference in New York.
"We don't know whether it's going to be mild or severe. It could be deep, it could be worse than the capital markets crisis."
http://www.nakedcapitalism.com/2008/05/senior-bear-departures-signs-of.htmlWhen the consensus was that JP Morgan got a screaming deal in its acquisition of Bear Stearns, I thought it was way too early to make that call. Yes, it certainly looked like the New York bank pulled a master stroke in getting the Fed to eat $29 billion of exposures, guaranteed to be the worst stuff that Morgan could hoover up.
But Bear also had a very large derivatives book, and as we well know, was a large credit default swaps protection writer. Those contracts are traded bi-laterally; JPM would not have particularly strong insights (its role as Bear's clearing bank wouldn't be of much help) and a mere weekend was clearly not enough time to do more than have a few key questions answered in the heat of putting a deal together. Similarly, Bear had two valuable assets: its headquarters building and its prime brokerage operation. The building, though still a good investment, will be worth less as Wall Street fires more people and Class A vacancies rise. Moreover, Bear was losing market share in prime brokerage, and in a period of deleveraging, it's the riskiest exposures that get cut deepest (and don't kid yourself, the real money in prime brokerage is in the lending).
So just as Bank of America's once touted deal with Countrywide looks like it will turn out to be a slow-motion train wreck, the Bear deal has the potential to be a millstone rather than an asset to JP Morgan.
A further sign that all is not well in former Bear-land is the sudden exodus of two former executives who were given very senior roles at Morgan. I came across this story by happenstance; it was broken by the Financial Times on a holiday weekend at 11:11 PM EDT (no coverage on any other outlets covered by Google News, nor on a search of the big financial blogs). So the pair was evidently forced out Friday to minimize press notice. And the article makes clear that mortgage valuations played a role in their removal.
These departures could be the result of bigger-than-expected Bear-related writedowns; in other words, this may merely be another aspect of a problem that has already been disclosed. But the way this was handled is highly sus, as the Australians would say. Don't be surprised if more shoes drop at JP Morgan
Buffett sees "long, deep" U.S. recessionYou have Warren Buffet telling you that the world credit crisis is over and everything will be back to normal
Buffett sees "long, deep" U.S. recession
Well technically the credit crisis as such is over, but the recession is only now being seriously 'priced in' by the bobble heads.http://moneynews.newsmax.com/streettalk/Jamie_Dimon_worst_ahead/2008/05/20/97555.html
Just who can you trust nowdays?You have Warren Buffet telling you that the world credit crisis is over and everything will be back to normal, and the CEO of one of the largest investment banker saying the worse is not over yet. I feel for the mums and dads investor on who to trust.
Well technically the credit crisis as such is over, but the recession is only now being seriously 'priced in' by the bobble heads.
Even so, there will be more financial tsunamis to come ie Credit Default Swaps & JP Morgan being on the wrong side of them. Potentially bigger than what we have just come through. I don't think Buffet will escape this either.
Why Gold Will Be Whacked Again
by Alex Wallenwein
Gold has recovered from its previous two "whacks" rather nicely this past week and the Friday before, but it will very likely be whacked again very soon, possibly as early as this coming Monday.
Why?
Because gold is rising while the Dow/US stocks are in ultra-dangerous territory.
That is the one thing the "powers" cannot tolerate. Confidence in the dollar is apparently no longer a necessity for those who operate our economy from behind the scenes. In fact, a falling dollar is utterly desirable for them, for reasons to be discussed below.
A primary stock market collapse, alone, is also not to high on their list of no-nos, but a collapsing stock market alongside a collapsing bond market alongside rising gold prices cannot, must not be tolerated.
If such were to come to pass, investors would have no place else to go but to foreign stocks - and to precious metals stocks.
Here is what's happening to the Dow:
After breaking its resistance line in April during what looked to many as a "powerful rally", the Dow has betrayed the fundamental weakness of its recent, post-Bear Stearns, recovery by shying away from its 200-day moving average twice, breaking its recent uptrend, and falling below even its 60-day moving average. It is now about halfway between its resistance and its level 1 support.
The engineered nature of this phony uptrend was revealed by the fact that it consisted largely of huge one or two-day rises which were inevitably followed by a series of smaller drops that at first capped and frequently eventually all but negated the previous rises.
Normal, healthy uptrends just don't look that way.
I would venture a prediction that, as soon as the Dow hits or crashes through support level 1, gold will be whacked again. If not, the Dow threatens to fall through its level 2 support, which would bring it below the January 200 high of 11,750 - and that would finally reveal that every bit of the Dow's recovery since then was contrived.
The NYSE looks very similar, except that it briefly managed to break above its 200-day MA before succumbing to its fundamental weakness, and except for the fact that its support level #2, going back to January 2000, lies far below current levels, namely at 7000. Which only means that, once it breaks below support level 1, it has along, long ways to go before it finds support.
Meanwhile, credit default swaps blew out last week in a manner that we haven't seen since the week before the Bear Stearns debacle. I included some of these charts a few weeks ago. The steep rise in swap spreads this week was ominous. The apparent internal deterioration of credit conditions is a stark contrast to what investors have come to believe (hope) during the relief rally since March. The stocks of many investment banks have now plunged to the same or lower levels than they were at prior to the Fed's intervention with Bear Stearns
http://business.theage.com.au/man-who-broke-the-bank-struggling-to-break-even-20080526-2if7.html"THIS is a period of wealth destruction. The people who make money will be few and far between. There will be a lot more money lost than made." When George Soros — the phenomenally successful hedge fund manager — says this, you know something is wrong, very wrong.
He has managed to make money almost consistently for over half a century — from his early days as one of the world's first major hedge fund traders to his involvement in Black Wednesday as the man who "broke the Bank of England", and in the latter years generating multibillion-dollar annual profits throughout the 1990s. The conditions today are almost uniquely dismal, however. "I think this is probably more serious than anything in our lifetime," he says.
In short, his feeling is that the US and Britain are facing a recession of a scale greater than the early 1990s, greater even than the 1970s.
We expect that the FED will soon resume its garbage accumulation efforts in earnest. The innumerable pronunciamentos about the "recovering" credit markets, the "healing" of same, the progress of the "healthy and necessary CORRECTION" in real estate markets seem to us to have as much realism as Mark Twain's celebrated observation about his own demise: "My death has been much reported".
In the first place, there is the forthcoming tsunami-like wave of bank writedowns which are being necessitated to greater and greater degree with the passing of every day -- courtesy of the continuing plunge in residential real estate prices, which daily reduces the market value of extant home loans on banks' books, not to mention the market value and salability of the mountain of securitized mortgage-backeds (in the early stages of being joined by a widening array of other asset-backeds, such as commercial real estate-backeds, auto-backeds, credit-card backeds, and God knows what else). In the second place, there is the sad reality that the bear market in low quality loans and debt securities (colloquially known as JUNK BONDS and JUNK LOANS, er, excuse us, "leveraged" loans) is far from over -- nay, in certain sectors, it is JUST BEGINNING. Finally, there is the admittedly much smaller, but nonetheless symptomatic demand (growing like Topsy) from ill-starred buyers of securitized mortgage-backeds that the vendors of such securities --ie, the BANKS that originated the loans and the banks that bundled them together and sold them -- BUY BACK THIS STUFF since, it is alleged, the lenders and bundlers and Wall Street rocketeers who invented and disseminated these securitized products made loans -- and accepted same into their mortgage pools which back the bonds -- which were contaminated by fraud, inaccuracies, and poor judgment, confuting in fact the ostensible high quality ratings these securities were awareded and which served as their prime selling to point to buyers.
Where, oh where, will all this garbage wind up, we wonder? The imperative of avoiding a meltdown of the financial system -- barely averted during the BEAR STEARNS crisis (please excuse the pun -- perhaps we should refer to it, jokingly of course, as the BARE STEARNS episode) -- will, we would guess, be invoked again (and again? and again?) by the SAVIORS of our financial system, the trusty FED, to justify yet more rubbish acquisition.
Well, who knows? Perhaps the FED intends to dispose of this junk at some neighborhood flea market
All this talk is making me very nervousIf the worst does happen, how affected do you all think the Aussie banks will be? I hold shares in ANZ & NAB. Should I be offloading or do what I always planned to do, and hold them long-term? I bought NAB at 28.26 & ANZ at 20.38. I'm a complete novice obviously
For every long term negative opinion you will find an equally compelling positive one. Which one do you give more weight to?? None! Do your own research rather than following rants from others.
For all you know we are all broke and useless traders.:
The matters from Sassa's post were not rants, they are facts. And by all means do your own research by widely reading on the financial situation across the globe. Problem is, sites such as Bloomberg serve up Wall Street rubbish. If you are serious you need to stack up the figures.
Just the price of oil is going to drive businesses in Australia to the wall.
My last shares in Banks was ANZ 3 years ago, but that's just me.
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