The world markets tanked last night and the futures are indicating another blood bath today. Articles/blogs I've been reading this week suggest much of the turmoil has been due to the anxiety over today's settlement of Lehman's cds contracts. One estimate shows the sellers of the insurance might have to payout $400 billion, and many of the sellers were banks. It's been argued that the reason the interbank loan market has frozen is due to 1) banks are hoarding their cash to meet their obligations; and 2) no one knows who the losers will be, and the losers might be taken down because of this. There are two scenarios: one, the settlement goes well, the obligations are less than expected, and no one is taken down--the markets would react positively; two, the opposite, and all hell breaks loose.

I'm going to be at a bar with some scotch and beer as the market closes....

But what about Bill Ayers?

When all is said and done, it will be seen how monumentally foolish it was to let Lehman file Ch. 11 without taking preventative steps in the CDS market over six months since the Bear collapse.

As I said, Paulson should be keel-hauled, especially if he let his bias influence the decision.

Would you believe that I may agree with you on this? At first, I dismissed it as sour grapes by the Lehman guys, but now, I'm not so sure. The immediate impact of Lehman's filing was exactly my fear of letting Bear file in March. Instead of banning short selling, they needed to ban new CDS contracts on financials from March on.

http://www.youtube.com/watch?v=xhZk8ronces...feature=related

The link is a JFK video telling it like it is.



Do you guy's see a banking shut down for next week???? The markets will be closed monday for the holiday and they like to pull their punches over the week ends.

You can shut the stock market for a few days without serious effects. You cannot shut down banking without an ensuing major calamity.

http://biz.yahoo.com/ap/081010/wall_street.html

"Panicked" is the key word there. The market moves on greed and fear; whenever it takes either of those to excess, it's time to look at doing the opposite.

Of course, the other rule that goes along with that is "Never try to catch a falling piano". Right now...the piano still looks like it's falling.

Stephen Harper in a political debate (since hey there is an election in Canada on Tuesday) said that this is not such a bad market as many stocks will be cheap and worth buying for the long term.

Although he is absolutely right, that is not something to say to the general public when they just lost a killing on the stock market and you're trying to get re-elected.

Main Street America is doing what they do best...selling low and buying high

Fortunately, I've been all cash for three weeks. Had I not liquidated my positions, I'd be down about 35%. (Note: I'm not claiming to be a market timer. Just a bit lucky.) Right now, I'm looking buying the same stocks I just sold, since I like the long-term prospects of the companies...and maybe throw some financial stocks in to the mix (American Express, Capital One - which is showing some interesting strength right now, Wells Fargo) on the principle that if everyone's panic-selling the entire sector, there's got to be some good deals. I expect to do quite well in a 3-5 year time-frame.

So personally...I'm happy.

Not only is it falling the fuggers on fire too.

Watch the wash sale rule.

I am aware.

how has Well's Mortgage sub done through all this?

I figured you were.

From my wife, who works closely with their mortgage people: very well, comparatively. Wells didn't get nearly as deep into subprimes as other lenders, and has a greater tendency to hold the mortgages they write rather than sell or pool them for CMO's. Their mortgage people aren't hurting nearly as badly as at other companies, at the very least. In her office, for example, Bank of America is denying mortgages in more than half the closings she schedules (of high-end properties, with good credit and 20% or more down). Wells...not nearly as many.

Don't know how the Wachovia acquisition will affect that, though. Between Wachovia's financial situation and potential lawsuits from Citi (they're tossing around numbers like "sixty billion dollars", which is nonsense. But still...), I don't know how that'll play out. Still...Wells is positioning themselves to be in a strong position after all this sorts out, in about 2-5 years.

I just watched half the Dow components go into the green, and the Dow pare 400 points in losses in ten minutes. Dow's now down - as I type - 130.

And I'm sitting here thinking "Wow, only down 130. This is a good day."

What happens if the DOW stays up 175 today? Should I still panic or save some panic for tomorrow?

Check that: Up 296.

Check that: Only up 234.

Check that: Now only up 177! PANIC! PANIC!!

Check that: Only up 101. Heading toward the ledge...

Check that: We're only up 5. PANIC AGAIN!!!

OH CRAP! We're down Over 100. PANIC MORE! PANIC MORE!

NEVER MIND. Only down 17. PANIC SLIGHTLY!

HOORAY! We're Up 75. STOP THE PANIC!

OH SHHIT! We're Down 5! PANIC MORE! PANIC MORE!

You'll have two days to think it over.

I suggest everyone take the weekend to think about anything other than the market. Come on folks we are in the middle of the Great Sports Overlap!

11AM CST tomorrow, ABC.

Besides guaranteed investments, I'm holding onto a few hundred shares of my employers stock which is low and a few thousand of semi-risky RRSP which is also pretty low. I'm looking at some Canadian oil producers (i.e. Encana) who are historically low.

Lemmings Lament

Talk to me about Conseco.

Thinking of dropping a few thousand on it, but I'd like to know a bit more first.

Well seeing they file BK during the last bear market due to their sketchy annuity sales I wouldn't want anything to do with them.

Here's an interesting bit of news on what may be driving some of the selling:

margin calls
If so, it's not just panic herd mentality driving this.

I've always assumed that margin calls had a lot to do with this. That was the big reason for the crash of '29 when margin requirement was only 10%.

Personally, I consider that part of fear-driven herd mentality. If you're selling at any price because you're freaked out, or because you have to meet a margin call...does it make a difference to the market?

I think it does. Most stock prices now are far from their true fundamentals because the average fear driven investor doesn't want to hold on to equity. On the other hand, the hedge fund is not fear driven but knows that he has no choice to sell since he doesn't have the cash flow to meet the margin calls.

Good point. Are the IBs raising the margin requirements to generate more capital for themselves for fear of their own demise, or to protect against the demise of the HFs? Ironically, their behavior may bring about what they are trying to protect against--the failure of both parties!

I'd still be on the sidelines, until the WaMu CDS settled on 10/23. Today is bull. Setting up for the big one later this week? Hope not.

I'd rather not be the first one in...be careful here. The second mouse usually gets the cheese, cause the first is caught by the trap.

I love watching market timers try to make money.

Not a timer...all in on the 401(k). Just thinking about putting some cash to work in a few weeks.

I'd agree. While the Lehman CDS settled Friday, the payouts will occur over the next several weeks. Anyone who has access to the Fed shouldn't have a problem, so watch out for a few hedge funds and insurance companies.

So what do you think about the possibility of a Chrysler GM merger? Good? Bad? Who gives a shiit?

Rumour has it at about 50/50.

Kind of like that '70's commerial. Two great pieces of crap that are greater pieces of crap when put together.

Whoo hoo. HP/Compaq=GM/Chrysler

worked pretty well on my 2 1/2 bagger on MS....

Up 11% for the day. That's usually a good year. WTF, this stuff is nuts.

..you know there were some poor schmucks that said on Friday...I cant take it anymore, I am selling everything out....

And I sent money in on Friday.

Time to buy!

I liked this one!!

"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful," said Buffett. "And most certainly, fear is now widespread, gripping even seasoned investors."

You gotta love that guy, no matter what side of the fence, if any, you sit on.

When people are greedy, it's time to sell. When people are scared it's time to buy. Simple, simple, simple. I

f people are afraid to buy now I ask them: "so do you go to Nordstroms and take a pair of shoes, pants, jacket and couple of ties to the counter and set them down and tell the clerk to hold them for you so you can come back and pay for them later when they're more expensive?"

Not everyone's doing bad

http://www.1440wallstreet.com/index.php/si...redit/#extended

Interesting coincidence that you posted that?
he's bowing out of the market. For all of you who jumped on the Buffet attempt to get people back in the market, buyer beware...

Lahde da...