Imminent and severe market correction

[nulla nulla]

The problem with all the chicken littles of the world, is that when they run arround screaming "the sky is falling", and they influence enough people, it will fall. Self perpetuating profits of doom.

 

[Glen48]

Is that why we are allowing FHO to go out and buy with our money and get into debt and have to walk away from their "Investment" once prices collapse?
Every time I make some investment they give you a warning that prices could go down but if you buy a house the agent can tell you houses double every 10 yrs and it is all legal.
I have been telling people to buy Gold ( set a record last night ) yet they still think I have 1 oar in the Water people will make their own choice but we should be given the best info. available at the time and then it is up to them to make a choice.
I predict Steven's is wrong and he will change his mind in no time.

 

[>Apocalypto<]

Is that why we are allowing FHO to go out and buy with our money and get into debt and have to walk away from their "Investment" once prices collapse?
Every time I make some investment they give you a warning that prices could go down but if you buy a house the agent can tell you houses double every 10 yrs and it is all legal.
I have been telling people to buy Gold ( set a record last night ) yet they still think I have 1 oar in the Water people will make their own choice but we should be given the best info. available at the time and then it is up to them to make a choice.
I predict Steven's is wrong and he will change his mind in no time.

were u telling them to buy it while it fell from 1000+ to 680??? all the expert golds bugs come out from under the carpet as soon as it makes a move.

and Glen money can buy poverty you just need to spend it the right way.............

 

[psychic]

I just switch to cash again in my super as it looks like we are heading to 3000 over the coming month, once 3000 is hit, then I will switch back to my fund

 

[Trembling Hand]

I just switch to cash again in my super as it looks like we are heading to 3000 over the coming month, once 3000 is hit, then I will switch back to my fund

Very

Didn't you just post about loading up LONG on the market with CFD's

 

[IFocus]

John Mauldin on the shape of Europe's banks......scary

A

ustrian banks have lent $289 billion (230 billion euros) to Eastern Europe. That is 70% of Austrian GDP. Much of it is in Swiss francs they borrowed from Swiss banks. Even a 10% impairment (highly optimistic) would bankrupt the Austrian financial system, says the Austrian finance minister, Joseph Proll. In the US we speak of banks that are too big to be allowed to fail. But the reality is that we could nationalize them if we needed to do so. (And for the record, I favor nationalization and swift privatization. We cannot afford a repeat of Japan's zombie banks.)

The problem is that in Europe there are many banks that are simply too big to save. The size of the banks in terms of the GDP of the country in which they are domiciled is all out of proportion. For my American readers, it would be as if the bank bailout package were in excess of $14 trillion (give or take a few trillion). In essence, there are small countries which have very large banks (relatively speaking) that have gone outside their own borders to make loans and have done so at levels of leverage which are far in excess of the most leveraged US banks. The ability of the "host" countries to nationalize their banks is simply not there. They are going to have to have help from larger countries. But as we will see below, that help is problematical.

 

[jonojpsg]

John Mauldin on the shape of Europe's banks......scary

A

Hang on a sec - I know the USA trots out a GDP of $14 trillion but when you take out all the dodgy accounting, the real figure is more like $10tn. If you want to tote up all the loans that US banks (including Fannie and Freddie) have made and the fact that a not insignificant percentage of them are dodgy sub-prime loans, I reckon that would have to come close to $7tn (or 70% of GDP). I'm not sure why the situation is any different to the US except that the "MIGHTY" US is able to print money ad infinitum and rack up debts that they will never be able to pay off.

Just my

 

[IFocus]

Hang on a sec - I know the USA trots out a GDP of $14 trillion but when you take out all the dodgy accounting, the real figure is more like $10tn. If you want to tote up all the loans that US banks (including Fannie and Freddie) have made and the fact that a not insignificant percentage of them are dodgy sub-prime loans, I reckon that would have to come close to $7tn (or 70% of GDP). I'm not sure why the situation is any different to the US except that the "MIGHTY" US is able to print money ad infinitum and rack up debts that they will never be able to pay off.

Just my

Not sure I get your point Mauldin was comparing Euro bank dept as if it were US dept

Full article here http://www.frontlinethoughts.com/gateway.asp?ref=reprint

 

[Dangerous]

The problem with all the chicken littles of the world, is that when they run arround screaming "the sky is falling", and they influence enough people, it will fall. Self perpetuating profits of doom.

Its called sentiment and it is very, very powerful....

 

[sassa]

Was going to post this in the Joke thread but thought it better here-
"It is now cheaper to buy a share in Citi than to make a withdrawal at an ATM."

 

[Julia]

More from "Business Spectator' on the nationalisation of banks:

http://www.businessspectator.com.au/bs.nsf/Article/21st-century-banking-$pd20090223-PHQCM?OpenDocument&src=kgb

 

[Whiskers]

The system is manipulated!

Well... now that I've got your attention, :... if this article is correct, there's serious cause for concern especially with anything that is marketed or in any way relies on the Dow index.

I don't trade indicies so I don't know much about it... but is this a serious concern?

Dow Jones Industrial Average blasted for including cheap stocks
Posted Feb 23rd 2009 8:15AM by Zac Bissonnette
Filed under: DJIA

The Dow Jones Industrial Average is in the headlines everyday, but few people actually understand how it's calculated. The DJIA is the sum of the value of one share of each of the 30 Dow components divided by the DJIA divisor, which is currently 0.1255527090. It's adjusted every now and then for spin-offs, dividends and splits. For geeks, the image at right shows the formula: p equals the price of the shares and d equals the DJIA divisor.

So what exactly is wrong with this formula? A ton. Critics have been pointing out forever that weighting the average based on stock price makes no sense because different companies have different numbers of shares outstanding. For example, if Berkshire Hathaway (NYSE: BRK.A) were part of the DJIA, its $70,000+ share price would dwarf the influence of all the other components combined. It would make much more sense to use a more holistic measure like market cap or enterprise value.


But the collapse of companies like Citigroup (NYSE: C), General Motors (NYSE: GM) and Bank of America (NYSE: BAC) has critics lobbing another allegation: Basically, as the share prices of these stocks decline, the influence they have on the DJIA shrinks too. For example, there are currently five stocks that are part of the Dow 30 that are trading below $10 per share. If all five went to 0, the Dow would fall by less than 200 points according (subscription required) to the Wall Street Journal.

Of course, it doesn't make any sense at all: If 1/6th of the companies in the Dow 30 going to 0 would cause the market to fall by less than 3%, it really can't be called an accurate barometer of the health of the market. The DJIA formula seems to substitute ease of calculation and simplicity for substance and value.

http://www.bloggingstocks.com/2009/...l-average-blasted-for-including-cheap-stocks/

 

[wayneL]

The system is manipulated!

Well... now that I've got your attention, :... if this article is correct, there's serious cause for concern especially with anything that is marketed or in any way relies on the Dow index.

I don't trade indicies so I don't know much about it... but is this a serious concern?

I've said it a bazillion times on here... possibly many times more; the Dow is for muppets & the bobbleheads on bubblevision.

The S&P500 is the index people should follow.

 

[sinner]

Hi Whiskers,

Thanks for the article, I enjoyed it.

Isn't this always the case though, even in our own portfolios (if you have one), as a price declines its % of the overall decreases masking further declines?

Not sure who these "critics" are, but the DJIA seems to be doing just fine dropping like a rock on it's own without any special changes to how it is evaluated

 

[theasxgorilla]

The S&P500 is the index people should follow.

And we're still waiting for the SPY to break it's most recent low. One more leg down then recovery...thats all I want.

 

[numbercruncher]

The problem with all the chicken littles of the world, is that when they run arround screaming "the sky is falling", and they influence enough people, it will fall. Self perpetuating profits of doom.

Ahhhh thats kinda like when its a 40c hot sunny day - if enough of these roosters you speak of run around screaming its raining its raining the skys will open up and rain ?

 

[wayneL]

Chicken Little is a very poor analogy. He was hit on the head by an apple(IIRC) and thought the sky was falling.

However, those of us who warned of problems in the economy were more like Paul Revere, who warned the revolutionary Americans of the approaching Redcoats,

Were those who warned of the Nazi danger Chicken Littles or Paul Reveres?

 

[numbercruncher]

11 year low for US markets today ....


Wonder if thats chicken little fault as well ? maybe scooby doo is to blame for that one ?

 

[explod]

Interesting discussion on the Dow guys. For years the composition was arranged to make it the optomism meter. Now with it going down they are calling fowl.

Being cracked up a lot lately

cheers explod

 

[gfresh]

yes: