Imminent and severe market correction

[sassa]

Could the banks' rescue of the bond insurers be the same outcome as their "get together" to alleviate the SIV fiasco?
Quote:
While $15 billion might seem like a large amount of money for banks to commit to bond guarantors at a time when many investors have lost faith in them, Mr. Haines said it would be smaller than the billions the banks might have to write down if the companies lost their top ratings or incurred major losses.

“It’s a calculated kind of risk,” he said.

A spokesman for Ambac did not return calls seeking comment. A spokeswoman for MBIA declined to comment.

Analysts say it is unclear how much money would be needed to capitalize the companies adequately. Ratings agencies have changed their requirements several times already as they update their assumptions of defaults and losses on mortgage securities.

“What is needed to do the job is to solidify the market perception of a triple-A rating,” said Sean Egan, founder of Egan-Jones Ratings, a firm that says the companies may need to raise as much as $30 billion.

A recent effort by some banks to help a smaller bond insurer, ACA Capital, has not gone smoothly. The banks have twice agreed to give the company, which was downgraded to triple-C from single-A, more time to come up with an acceptable plan

 

[numbercruncher]

BEIJING (AFP) - China on Wednesday issued an "urgent" call for the coal industry, electricity providers and government agencies to ensure adequate coal supplies as a nationwide power crisis loomed.

The report said the booming nation's stockpile of coal, which provides about 70 percent of China's power needs, had dwindled to a mere week's supply in recent days.

news.yahoo.com/s/afp/20080123/bs_afp/chinaelectricity

hmmmm.

So China runs out of electricity, then what happens ??? we use our imaginations

 

[Sean K]

Classic.

Not one post in here today.

The bears are back in their caves already.

(maybe just until tomorrow's 5% drop )

I haven't got a clue what's going on here....

 

[Captain G]

Hi Hennas, I think things are taking off again because all the markets are expecting or loading in another 0.5 rate cut from the US Fed at the next meeting. Does anyone else think this ??

 

[Flying Fish]

we are out enjoying our ill gotton gains, see you on monday

 

[Aussiejeff]

we are out enjoying our ill gotton gains, see you on monday

You sure yer not busy washing the stains out of yer shorts?

LOL.



AJ

 

[Aussiejeff]

news.yahoo.com/s/afp/20080123/bs_afp/chinaelectricity

hmmmm.

So China runs out of electricity, then what happens ??? we use our imaginations

Who cares about what might happen in China in 7 days! OUR market is UP today, so ny-a-a-a-h-h-h to the future... the reality is NOW, so it's BUY, BUY, BUY!!!

Maybe TOMORROW or the next day it will be BYE, BYE, BYE if the market dives again...

 

[Kauri]

Hi Hennas, I think things are taking off again because all the markets are expecting or loading in another 0.5 rate cut from the US Fed at the next meeting. Does anyone else think this ??

Nope... I reckon after being fooled into the emergency 0.75% already.. and the market activity going on now(allowing that it continues, albeit at a more sedate pace)... why waste your powder.. they will need and be glad of everything they can muster soon enough... or not..
Cheep cheep
........Kauri

 

[Awesomandy]

Classic.

Not one post in here today.

The bears are back in their caves already.

(maybe just until tomorrow's 5% drop )

I haven't got a clue what's going on here....

I think we are a little bit quiet today, since everything is going more or less according to plan at the moment - a rapid bounce and rally towards the 5700 - 5900 region (or at least a lower high). I'm sure posts will increase again when either 1. XAO powers past the last high, or 2. it runs out of steam at or before 5900.

 

[explod]

Nope... I reckon after being fooled into the emergency 0.75% already.. and the market activity going on now(allowing that it continues, albeit at a more sedate pace)... why waste your powder.. they will need and be glad of everything they can muster soon enough... or not..
Cheep cheep
........Kauri

I tend to agree. The volume on the Dow over the last 3 days has been considerably high. (Last night in essence the Dow went sideways.) We might say that some see opportunity. For every buyer we have a seller. What sort of thinker is the buyer when in fact on the chart the Dow was near the brink?

If the Fed does not move as anticipated could we see the raft on the edge again. The water is rough. Could no move now cause an second uncheduled one later next week?

We live in amazing times

 

[Kimosabi]

I think we are a little bit quiet today, since everything is going more or less according to plan at the moment - a rapid bounce and rally towards the 5700 - 5900 region (or at least a lower high). I'm sure posts will increase again when either 1. XAO powers past the last high, or 2. it runs out of steam at or before 5900.

Yep, the Bond insurers unravelling will trigger the next big step down which could happen as soon as early next week.

I bought ZFX at $8.55 on tuesday and got out at $10.53 today. Unfortunately, I think the next round of bloodletting is going to start next week.

I'm seeing too much stuff about the US potentially dragging the rest of the World into a World Wide Depression to have any confidence in the current markets. All of the easy credit is going to have to be purged from the system before this is over...

 

[cordelia]

I have to agree. bought ZFX then got out today.....Didn't make as much profit as you but when prices fall suddenly and then go straight back up its smacks of panic buying. There seemed to be a lot of sell orders for ZFX which bothered me. I think the people who panic sold are now panic buying. A bit of a knee jerk reaction...

 

[blablabla]

Massive rate cut + big tax rebates + plans to bail out the subprime losers. In normal times all of this would have caused a double-digit percentage rise for the DJI, but it is only back to where it was a week ago.

The Bush administration appears willing to keep up the bombardment of interventions even if they have to use up all the ammo at their disposal. There is plenty of ammo left too. USA interest rates can still fall another 3.5% if necessary, and the financial system is able to create trillions more new dollars out of thin air. The control of inflation has been sacrificed so that the Republicans can still have a chance of winning the upcoming election.

The price of everything will rise, including the prices of shares. Inflation is one of the worst bubbles because it affects everything. Most bubbles only affect one or a few things.

All will be fine, the Republicans will probably get re-elected ..... but eventually the bubble must burst. These irresponsible USA measures, and probably more of the same yet to come, will make economic collapse further down the track more likely, not less likely.

 

[ithatheekret]

Da daan daan daa daaadaaa ...........

 

[Uncle Festivus]

USA interest rates can still fall another 3.5% if necessary, and the financial system is able to create trillions more new dollars out of thin air. The control of inflation has been sacrificed so that the Republicans can still have a chance of winning the upcoming election.

The price of everything will rise, including the prices of shares. Inflation is one of the worst bubbles because it affects everything. Most bubbles only affect one or a few things.

The real interest rate is prob closer to zero already, depending on who's measure of inflation you have, so lowering any more is like pushing on a string of spaghetti.

The Fed is outwardly concerned with inflation, but they have shown they are willing to sacrifice the US dollar in an desperate attempt to ward off deflation. We (the US) currently have stagflation. So the cycle turns.....

 

[Whiskers]

We (the US) currently have stagflation. So the cycle turns.....

Uncle, are you a yank... err, American?

I mean do you live in the USA?

Just curious cos I've decided to start making some contacts there through the Golden Key inCircle network.

 

[Uncle Festivus]

Uncle, are you a yank... err, American?

I mean do you live in the USA?

Just curious cos I've decided to start making some contacts there through the Golden Key inCircle network.

Fortunately no - I was using 'we' in general terms?

 

[nizar]

I bought ZFX at $8.55 on tuesday and got out at $10.53 today. Unfortunately, I think the next round of bloodletting is going to start next week.

You've got balls to have bought on Tuesday.
Thats respect.

 

[ithatheekret]

The Mibtel looks a good shorting prospect , can't get near it on my platforms

The US drop should wobble it about a bit . Has anyone thought that the PPT could be option protection . There were a flush of 11980/12000 calls that went through last week , ranging through to March . Haven't assumed anything myself , just an observation . It would have to be serious money though ..........

 

[sassa]

CNN headline-THE BULLS THROW IN THE TOWEL
John Merrill thinks that the market hit an intermediate term bottom last week and sees it being revisited in the next 5 to 10 days.
A 365 point turnaround yesterday with the Nasdaq site giving the reasons as-
"Selling efforts were compounded by renewed concerns surrounding the likelihood of further credit losses for the financial sector, worries that a rescue plan of some sort for the bond insurers was no sure thing, and rumors that a hedge fund was in trouble."The latter rumour about the hedge fund was commented on by other sites as was the unlikelihood of the banks rescuing the bond insurers.
The 2 sectors that were the leaders in the big turnaround on Wednesday were the hardest hit yesterday(financials and consumer discretionary)."This weakness,"said the Nasdaq site,"is apt to stir concerns that the week's rally will be short lived."