Imminent and severe market correction

[noirua]

Talk in the London Evening Standard that Lloyds TSB Bank may be considering pulling out of the takeover of Halifax Bank of Scotland. The shares of Lloyds TSB have fallen sharply on further consideration of the takeover. Halifax, part of the HBOS setup, is a mortgage bank with severe problems.

 

[deadset]

I'm definitely not carrying much debt going into this weekend. There'll definitely be some news out before US market open, hopefully during our trading day on Monday, though I expect for alot of things they will dither til late in the week ?

 

[explod]

David James was just mentioning in todays Age this morning a small matter of the derivatives market playing roulette with the global financial system.

The point that hits me is the size of the thing. 450 trillion dollars. Tried to explain it to the better half and couldn't so got on the calculator and worked out that it is a pile of $100 notes 9 million kilometres high.

Now how far would that be end to end? are we still in the solar system?

Anyway, sounds like deals been done and we are all saved for another week, er day.

 

[$20shoes]

The point that hits me is the size of the thing. 450 trillion dollars. Tried to explain it to the better half and couldn't so got on the calculator and worked out that it is a pile of $100 notes 9 million kilometres high.

I pulled out the calculator on the weekend too, Explod. I was reading a gold article that tried to put 1 trillion dollars into perspective. They suggested if you spent $1M per day from the time Christ was born until now you would have just spent about 3/4 of a trillion dollars. When I read that, my jaw kinda dropped...

 

[MrBurns]

I'm getting sick of this I wish the whole thing would just implode and get it over with. Can't invest in anything at present.

What do you do sit on the fence for another year ? (not that it will take that long I guess)

 

[wayneL]

I'm getting sick of this I wish the whole thing would just implode and get it over with. Can't invest in anything at present.

What do you do sit on the fence for another year ? (not that it will take that long I guess)

Trade yer @ss off.

But agree with your sentiment... wish they would just let capitalism do its thing... Oh wait, we're not capitalists anymore.

 

[gfresh]

Not looking any better out there after the "bailout" package was approved in principle. If it was meant to give confidence, it seems to have failed already. The longer banks hoard cash, the more likely it seems other banks will fall over. Seems to be quite self-perpetuating.

Apparently the TED spread (Banks borrowing rate vs Treasury rate) is at a record high. The last time this happened was just before the 1987 stock market crash. Is it possible history will repeat?

http://www.bloomberg.com/apps/news?pid=20601087&sid=aQIbeNQz_Qxg&refer=home

Money-Market Rates Jump as Bank Rescues Stoke Lending Concern

By Gavin Finch and Lukanyo Mnyanda

Sept. 29 (Bloomberg) -- The cost of borrowing in euros for three months rose to a record after government-led bank bailouts heightened concern that more will fail, prompting financial institutions to hoard cash.

The euro interbank offered rate, or Euribor, climbed 10 basis points to 5.24 percent, the European Banking Federation said today. That's the biggest jump since June. The London interbank offered rate, or Libor, for three-month dollar loans rose to 3.88 percent, the highest level since Jan. 18 and up from 2.81 percent a month ago. Singapore's benchmark rate for such loans increased to the highest level in eight months.

 

[acouch]

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.
The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

Thomas Jefferson

ac

 

[Macquack]

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.
The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

Thomas Jefferson

ac

In a letter to the Secretary of the Treasury Albert Gallatin (1802).
Know that off by heart.

When President John F. Kennedy welcomed forty-nine Nobel Prize winners to the White House in 1962 he said, "I think this is the most extraordinary collection of talent and of human knowledge that has ever been gathered together at the White House – with the possible exception of when Thomas Jefferson dined alone."

Jefferson predicted the current financial turmoil over 200 years ago.

He would be saying f*** the Federal Reserve.

 

[pepperoni]

God i hope the bailout talk is just to buy time and doesnt go ahead.

Yes it wont be pretty for growth or jobs but US people wont have to inherit more debt and all the defaulted loans will be nicely deflationary.

http://www.youtube.com/watch?v=qUT3RjsHYDk&feature=related

 

[BentRod]

Classic, the date that video was posted marked almost the exact top in the Euro

 

[GreatPig]

Another one (effectively) bites the dust.

Citigroup to buy Wachovia's banking operations.

Although the FDIC is reassuring everyone that Wachovia didn't actually fail.

GP

 

[sparc]

Can someone explain to me what they mean by injecting money into the market, all central banks around the world are injecting billions of dollars into the system:
http://www.reuters.com/article/hotStocksNews/idUSTRE48S0Z920080929

is this merely to do with the currency, or is the money given directly to the banks.

second questions is, where is all this money going, once the injection has been done, its seems there is a black hole and no amount of funding by the central banks seems to enough.

 

[wayneL]

The Celtic Tiger shot by poachers.

 

[BentRod]

Brutal.

That is a big move

 

[lesm]

What an interesting night for trading

GLOBAL MARKETS-World stocks set for biggest 1-day loss in 20yrs
29 Sep 2008 - 15:26

LONDON, Sept 29 (Reuters) - World stocks tumbled more than 4 percent on Monday, on track for their biggest one-day loss in at least 20 years as concerns about the financial sector intensified, prompting broad sell-off in risky assets.

MSCI's main world equity index fell 4.2 percent <.MIWD00000PUS> on the day, hitting its lowest level since September 18.

(Reporting by Natsuko Waki)

((natsuko.waki@reuters.com, +44 207 542 6721, Reuters Messaging: natsuko.waki.reuters.com@reuters.net))

Keywords: MARKETS GLOBAL

 

[noirua]

Big falls as the careful package from the States, 3 pages becomes 100 pages, has too many strings attached. Bradford and Bingley will not be the last lender to get in trouble, with RBOS (Royal Bank of Scotland) in trouble over it's Fortis Bank connections and Lloyds TSB wobbling over the takeover of HBOS (Halifax Bank of Scotland).

UK's, FTSE 100 down 5.1%, FTSE 250 down 5.9%.
RBOS down 19.5%, HBOS down 18%, Xstrata down 18%, Lloyds TSB down 13%, Barclays down 12%, Vedanta down 10%, BHP down 11%, Antofagasta down 13%, Anglo American down 11%, and Rio Tinto down 10%.

Oil US$102 for Brent crude, Gold US$905 oz.

Aussie$ down 2.16% ag'st US$1.

Dax Xetra down 4.6%. Paris cac 40, down 4.6%, Eurofirst 300 down 5%.
Dow down 2.6%, S & P 500 down 3.7%, Nasdaq down 4.1%.

 

[wayneL]

Bail out voted down... but re-vote happening apparently.

 

[cuttlefish]

Can someone explain to me what they mean by injecting money into the market, all central banks around the world are injecting billions of dollars into the system:
http://www.reuters.com/article/hotStocksNews/idUSTRE48S0Z920080929

is this merely to do with the currency, or is the money given directly to the banks.

second questions is, where is all this money going, once the injection has been done, its seems there is a black hole and no amount of funding by the central banks seems to enough.

sparc - my understanding of how this works may not be correct but I think its something like this.

Imagine there are four brothers (the banks). One brother say's he'll go down and buy a case of beer and asks the other three brothers to spot him a tenner each to go one quarter in the $40 box of beer. The three other brothers agree that they want the beer but they don't trust the other brother and are worried that he actually owes the local loan shark $30 and is going to head out of the house and pay their $30 to the loan shark instead of delivering the beer and they'll be out of pocket $10 each.

So the brother goes to Dad (the reserve bank) and Dad lends the dodgy brother the $30 to go and buy the case of beer (he's not a very responsible Dad) and Dad (the Fed) tells the other brothers they each owe him $10 when they get the case of beer. The other brothers are happy with this. Dad has 'injected' $30 into the system. The other brother comes back with the beer - the 3 brothers pay Dad back the $30 - everyone's happy. Repeat this scenario simultaneously and continuously and I think thats roughly whats happening with the central banks.

If we carry on the analogy for a bit of poetic license - the dodgy brother DOES actually owe the loan shark money - but its not $30 its $120 - and so he's waiting until Dad (the fed) trusts him enough to spot him $120 before going and paying back the loan shark and then crying poor to Dad to bail him out. (read Bear, AIG, Freddie, Fannie).

The senate is now (hopefully) about to approve a bill that will give Dad enough money to just go to the loan shark and say - look you know my sons aren't good for the debt - how about I pay you a quarter of what they owe and we call it quits 'eh - 'cos I'm getting sick of them coming to me for short term loans every time they want a pizza or a case of beer.

(oh and each brother is also simultaneously a dodgy loan shark and when the Dad has paid them all out for a quarter of the debt they'll all start doing dodgy loans to each other again).

 

[mazzatelli1000]

These sort of moves arent good for the heart :swear::cussing:c: