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NoWorries
Tar Sands
Joined: Jun 05, 2008
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SoylentGreen
Heavy Crude
Joined: May 25, 2008
Posts: 168
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 Posted: Fri Jul 11, 2008 7:02 am Post subject: Re: Financial drop in S&P: Will look like August 2004 |
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| I have been a freddie Mac/subprime auditor for the last 4 years. trust me, its gonna look more like 10/1929. Freddie and Fannie are all but insolvent. Indy is out of business.the problem....foriegn investment.Nobody wants to invest in the US anymore and I dont blame them. |
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Fiddlerdave
Heavy Crude
Joined: Mar 18, 2007
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| Posted: Sat Jul 12, 2008 3:49 am Post subject: Re: Financial drop in S&P: Will look like August 2004 |
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| NoWorries wrote: | http://www.bloomberg.com/apps/news?pid=20601213&sid=au9lYw3WnbS8&refer=home
Whew! That's a relief. I was afraid things were going to look like 1929.  |
They were just talking Friday. Who can say about the far future, like Monday? |
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CarlosFerreira
Heavy Crude
Joined: Jul 02, 2008
Posts: 436
Location: Espinho, Porto, Portugal
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| Posted: Sat Jul 12, 2008 4:23 am Post subject: Re: Financial drop in S&P: Will look like August 2004 |
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| SoylentGreen wrote: | | I have been a freddie Mac/subprime auditor for the last 4 years. trust me, its gonna look more like 10/1929. Freddie and Fannie are all but insolvent. Indy is out of business.the problem....foriegn investment.Nobody wants to invest in the US anymore and I dont blame them. |
We've been reading for years now that the US economy was the most dependent of foreign money in the world. So, if there's a confidence issue, people won't risk burying money there. How will they solve the problem, I can't see. |
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SoylentGreen
Heavy Crude
Joined: May 25, 2008
Posts: 168
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| Posted: Sat Jul 12, 2008 9:16 am Post subject: Re: Financial drop in S&P: Will look like August 2004 |
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IndyMac is also a bank. This is the 1st time I am aware of since the 1930's depositors are going to loose $ in deposits.
FDIC gaurantees $100,000. In this case ,if you have more than that which about 10,000 customers do, they will only get 1/2 of theyre money beyond $100,000 and must file a claim with the FDIC.
Maybe they will get it,maybe they wont. More bank failures are imminent. If you have more than $100K in one bank, you need to spread it around?
Without more mega foriegn investment,I dont see how we are going to unplug this comode?
Moronically liberal Stated Income loans since 2002 made by Fannie Freddie and big investment houses Bear Sterns and Lehman among others have gone bad in such quantities, no foriegn investor will touch the US with a 3 metre pole.(10 foot)
Fannie Mae and Freddie Mac started the retardedly liberal lending underwriting standards and there is still no talk of crucifying the people in charge.
They should be treated like the executives of WorldCom,HealthSouth,Enron and Tyco.Prosecute them, lock them up, find and seize thier assets.At least that would be a sign of trying to solve the problem from the roots and maybe we can go forward from there.
The folks on the top floor of Fannie and Freddie are as guilty and have caused the country more damage than anybody since the great depression. |
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BigTex
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Joined: Aug 03, 2006
Posts: 4267
Location: Graceland
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| Posted: Sat Jul 12, 2008 11:03 am Post subject: Re: Financial drop in S&P: Will look like August 2004 |
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Since the S&P has no aerodynamic qualities (of which I am aware), it will do what any ballistic object does when it runs out of fuel or momentum--it will fall...
And it will continue falling until more propellant is provided.
The question is: what will the propellant be?
Historically, the propellant has ALWAYS been cheap energy (short term bursts can be provided through cheap credit as well). Since there is no reason to believe that cheap energy is anywhere on the future horizon (and we have already done the cheap credit thing), there is no propellant that I can see anywhere in the future.
Does anyone else see propellant for more upward movement?
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DantesPeak
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Joined: Oct 23, 2004
Posts: 5891
Location: New Jersey
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| Posted: Sat Jul 12, 2008 12:09 pm Post subject: Re: Financial drop in S&P: Will look like August 2004 |
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| BigTex wrote: |
Does anyone else see propellant for more upward movement? |
I think if you took out energy related issues from the S & P over the last two years teh resulting S & P would look pretty bad. So bad that no one would have any doubt there is a bear market in progress.
The stocks of many financial related companies may well eventually go to zero. But the stocks of unleveraged companies and especially natural resource firms may do well as the next wave of Fed induced inflation spreads.
The potential problem later with natural resource, oil service, etc., issues is that since mostly only companies making money pay tax, there will be a great effort to raise the tax on that group due to their 'windfall' profits.
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SoylentGreen
Heavy Crude
Joined: May 25, 2008
Posts: 168
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| Posted: Sun Jul 13, 2008 11:11 am Post subject: Re: Financial drop in S&P: Will look like August 2004 |
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| 90 US banks have been put on "FDIC watch list". I havent been able to find a list of these institutions. To be put on the FDIC watch list, loan portfolio delinquencies over 90 days has to be major and the reserves to deal with them, doubtful. |
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DantesPeak
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Joined: Oct 23, 2004
Posts: 5891
Location: New Jersey
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| Posted: Sun Jul 13, 2008 11:21 am Post subject: Re: Financial drop in S&P: Will look like August 2004 |
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| SoylentGreen wrote: | | 90 US banks have been put on "FDIC watch list". I havent been able to find a list of these institutions. To be put on the FDIC watch list, loan portfolio delinquencies over 90 days has to be major and the reserves to deal with them, doubtful. |
The watch list is not public information but an educated guess can be made as to who is on the list (not that I know).
Any financial firm that has any kind of government order in force against it, which IndyMac did, is a prime canidate.
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SoylentGreen
Heavy Crude
Joined: May 25, 2008
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| Posted: Sun Jul 13, 2008 11:27 am Post subject: Re: Financial drop in S&P: Will look like August 2004 |
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| Im not aware of anywhere close to that may banks on the watch list in FDIC's history ? |
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BigTex
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Joined: Aug 03, 2006
Posts: 4267
Location: Graceland
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| Posted: Sun Jul 13, 2008 2:54 pm Post subject: Re: Financial drop in S&P: Will look like August 2004 |
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| DantesPeak wrote: | The stocks of many financial related companies may well eventually go to zero. But the stocks of unleveraged companies and especially natural resource firms may do well as the next wave of Fed induced inflation spreads.
The potential problem later with natural resource, oil service, etc., issues is that since mostly only companies making money pay tax, there will be a great effort to raise the tax on that group due to their 'windfall' profits. |
I think a lot of the bull market in natural resource stocks may be behind us, since the market seems to be figuring out slowly that if your costs are rising as fast as your profits, things may not be as rosy as they appear.
The fact that Exxon doesn't seem to have anything better to do with its profits than buy back its own stock is also not encouraging.
I think that we are in a very strange place right now, where there is an excessive amount of risk that doesn't appear to be priced into either the bond or the stock market.
What rational person would buy a 10 year Treasury bond at under 4% right now? That just doesn't make any sense to me.
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DantesPeak
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Joined: Oct 23, 2004
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Location: New Jersey
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| Posted: Sun Jul 13, 2008 3:09 pm Post subject: Re: Financial drop in S&P: Will look like August 2004 |
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| BigTex wrote: | | DantesPeak wrote: | The stocks of many financial related companies may well eventually go to zero. But the stocks of unleveraged companies and especially natural resource firms may do well as the next wave of Fed induced inflation spreads.
The potential problem later with natural resource, oil service, etc., issues is that since mostly only companies making money pay tax, there will be a great effort to raise the tax on that group due to their 'windfall' profits. |
I think a lot of the bull market in natural resource stocks may be behind us, since the market seems to be figuring out slowly that if your costs are rising as fast as your profits, things may not be as rosy as they appear.
The fact that Exxon doesn't seem to have anything better to do with its profits than buy back its own stock is also not encouraging.
I think that we are in a very strange place right now, where there is an excessive amount of risk that doesn't appear to be priced into either the bond or the stock market.
What rational person would buy a 10 year Treasury bond at under 4% right now? That just doesn't make any sense to me. |
I agree with your point that costs for natural resource companies are also rising rapidly, and for example, may be behind the reason that drilling is not being conducted on some off shore leases even where there is some promise.
However because the US Treasury bond market serves as a financial hedge to the even larger mortgage market, the actual yield of bonds at 4% reflects more the lack of investment alternatives and mortgage hedging than inflation.
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BigTex
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Joined: Aug 03, 2006
Posts: 4267
Location: Graceland
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| Posted: Sun Jul 13, 2008 3:17 pm Post subject: Re: Financial drop in S&P: Will look like August 2004 |
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| DantesPeak wrote: | | However because the US Treasury bond market serves as a financial hedge to the even larger mortgage market, the actual yield of bonds at 4% reflects more the lack of investment alternatives and mortgage hedging than inflation. |
I agree with you regarding how we got to 3.95%. What concerns me is that I feel like there is a thick rubber band that is being stretched between Treasury rates and U.S. dollar inflation. The rate of inflation can only exceed Treasury rates for so long before the tension gets too great and the rubber band breaks.
If the market is rational, sooner or later capital will look for a new home where the reward is proportionate to the risk, right?
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SoylentGreen
Heavy Crude
Joined: May 25, 2008
Posts: 168
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| Posted: Sun Jul 13, 2008 4:08 pm Post subject: Re: Financial drop in S&P: Will look like August 2004 |
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On the Natural resources side..... I still think Nat Gas, Canadian Oil Sands and N. American Coal have more upside because there is so much of it and the fact that America and most industrialized nations will depend on those fossil fuel sources more as conventional Oil gets harder to get out of the ground.
another side note...the just failed IndyMac Bank wasnt even on the FDIC watch list....?????? |
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SoylentGreen
Heavy Crude
Joined: May 25, 2008
Posts: 168
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| Posted: Mon Jul 14, 2008 6:12 pm Post subject: Re: Financial drop in S&P: Will look like August 2004 |
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| Now the news is saying 150 US banks could fail.So how much more feces has to hit the fan to cause a depression? |
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