The ongoing financial turmoil and financial discussion thread

[macker]

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2004 2008

Saw this "Market Christmas Tree" today and thought it about sums up the year that was in the markets . Better get some AGU or POT to put on this tree fast!!!
EDIT : Tree didn't really work out...in line with the markets the last 4 years I guess...

[Nancy]

Originally Posted by MoneyGuy

Are you serious?

I'm serious that they are losing money. I am not serious that Toyotas suck, just being sarcastic (I did put that in green but perhaps too dark a shade of green.) The point being that a lot of people are saying that the reason the Big 3 are losing money because they make cars that suck, yet here we have even Toyota losing money.

[Phanuthier]

Well the difference obviously is that the American companies have been operating on negative margins for years, while this is the first time in 61 years for Toyota.

[Claeren]

Initial jobless claims increase more than expected to 26-year high as layoffs spread

http://biz.yahoo.com/ap/081224/financial_meltdown.html

and perhaps more telling:

Consumer spending posts fifth monthly drop, income contracts

http://biz.yahoo.com/rb/081224/busin...my_income.html

Incomes dropping is exactly what the Fed has been working so hard to prevent. If it sets in this could be a slow and painful process..... and all of the sudden all of those stock valuations start to look less and less like a deal as their own income drops as well.




Merry Christmas!





Claeren.

[Phanuthier]

Just for fun Claeren, some headlines from 1990:

"Layoffs this time hit professional ranks wiht unusual force" (Wall Street Journal, Oct 4)
"How safe is your job?" (Newsweek, Nov 5)
"Scraping by" (New York Times, Nov 5)
"The Real Estate Bust" (Newsweek, Oct 1)
"High rents could be keeping young from setting up house" (Business Week, Oct 22)
" Housing sump hammering home remodelers" (Business Week, Oct 22)
"How the real estate crash threatens financial institutions" (US News, Nov 12)
" Housing recession that began the northeast 3 years ago now engulfs entire nation" (New York Times, Dec 16)
"Deficiet plan will face dicey fate in congress and isn't a cure-all" (Wall street journal, oct 1)
"Uncertainty rains over US economy" (Wall street journal, Dec 3)
"The consumer has seen the future, and gotten depressed" (Business week, Dec 10)
"A survival guide for the age of anxiety" (Newsweek, Dec 31)
"Can America still compete?" (Time, Oct 29)
"Can your bank stay afloat?" (US News, Nov 12)
"Can you compete? The Americans are falling behind and what can be done to pick up the pace" (Business Week, Dec 17)

(Courtesy of Peter Lynch, Beating the Street)

That said, I agree that we should be seeing money printed to destroy credit and this is a huge huge issue. I don't see a recovery any time soon, but I don't think this should last more then 1-2 years. If the markets are always forward thinking by 2 quarters, then it probably is a good as any time to buy. You can't always see the future, and if you are buying quality companies, it shouldn't matter when you buy if you buy-and-hold.

Plus, if the dollar is getting devalued as the feds try to pay off credit, better to try and hold it in something that has value, right?

[pepper24]

Originally Posted by Nancy

Just noticed that BMO investorline is introducing $9.95 flat fee trading for accounts over $100K. Any opinions on whether or not it is still worthwhile to move to Questtrade (which I was planning on doing.) I probably average only a couple of trades per month.

I would stick with Questrade. I use them as I only do a few trades per month as well and they only charge me $4.95 per trade with no mins.

[Wookie]

Decent few days.
Oil over $45.00
One of my stocks has doubled from its 52 week low, now I'm only down 78%, instead of 89%. WOOP WOOP!!

[Bertuzzied]

all the uranium stocks have been blasting off. I'm actually almost even. unbelievable from a month ago.

[Claeren]

Saw this and thought I'd post it (a few of you may also have seen it, and for the record I am NOT a big fan of the blogger who posted it, there is some parallel in our views but there are big differences too.)







Claeren.

[macker]

Obama or not....Things are looking up for my portfolio as I sold out of GLD in the fall fall and am up 38% thanks to Agrium, 40% thanks to Teck Cominco, and 124% thanks to Shore Gold. Keeping a short leash on these 3 with stop losses but hoping for doubles on all 3 and have achieved 1/3 of my goal so far without being stopped out

[Claeren]

So.... looks like British (especially) and American banks are slowly and quietly moving towards collapse....

I am thinking 2 of Citi (already basically gone) and JP Morgan and Bank of America will be gone by the end of the year with the 3rd close behind them. That can't be good, although it is probably for the best in the long term and would maybe(?) have been the better choice (a forced break-up) earlier in this 'crisis' .

Meanwhile the automakers are not getting any closer to being viable either. What happens to the markets when they come back for more money in 3 months(?) and people realize this problem has not been solved in the least?



Interesting times....

Oh yeah, and then there is that 1-2 Trillion dollar deficit soon to be announced....


Claeren.

[pepper24]

^ I think JP Morgan Chase and Wells Fargo are the only 2 American banks that can and will survive.

Citi and Banc of America have some tough times ahead and will be interesting to watch.

[Shazam]

Good thing I have arable land to grow my own food.

Now to get a shotgun, pistol, assault rifle, land mines and lots of ammo.

[Phanuthier]

Originally Posted by Claeren

I am thinking 2 of Citi (already basically gone) and JP Morgan and Bank of America will be gone by the end of the year with the 3rd close behind them. That can't be good, although it is probably for the best in the long term and would maybe(?) have been the better choice (a forced break-up) earlier in this 'crisis' .

I can see why you think Citi, and maybe even BoA (with ML's massive losses) but why JP Morgan? Just because of the non-existent inter-bank lending?

Think the feds will actually let a BoA go (I can see Citi getting nationalized)? I can't really see it, for no other reason then it would kill the confidence in the markets. I think we'd see a 8th (or whatever) bailout for BoA.

[macker]

Google : will cit and you get

will citigroup survive 527,000 results
will citgroup go bankrupt 123,000
will citibank survive 363,000
will citigroup fail 2,240,000
will citibank go bankrupt 80,300
will citi fail 2,760,000
will citibank collapse 399,000
will citigroup go under 629,000
will citibank go under 654,000
will citigroup collapse 1,290,000

So...what's it gonna be...... and where does that leave Primerica

[Muta]

Where do you guys do alot of your research for all this financial stuff?

[Slava]

Originally Posted by macker

and where does that leave Primerica

Hopefully out of business in Alberta....

[Claeren]

Originally Posted by Phanuthier

I can see why you think Citi, and maybe even BoA (with ML's massive losses) but why JP Morgan? Just because of the non-existent inter-bank lending?

Think the feds will actually let a BoA go (I can see Citi getting nationalized)? I can't really see it, for no other reason then it would kill the confidence in the markets. I think we'd see a 8th (or whatever) bailout for BoA.

Well to be honest, my point was more general and just that the big banks around the world are in serious trouble -- more so than many people who have stopped following the situation since December might realize.

I said '2 of 3' specifically because JP Morgan is more healthy than the rest but I still think all of the large super-sized banks are going to be under a lot of pressure going forward to restructure and by the end of this period in the markets/world (how ever long it takes) banks will have a different business model than they do now -- which inheriently leads to instability in current companies?

So some are doomed (like Bank of Scotland which will be nationalized completely IMO) while others are being broken into pieces already (Citi) while others are comparatively healthy (like JPMorgan) but that is not saying much and they will have to compete against new smaller companies being propped up with government money for years to come....



I am most interested in just how tedious the banking system is right now. I say a lot of things with a certain confidence in my predictions but things are so messed up now I am losing track of the fundamentals driving things (and thus predictions become harder to make). All I know is that it is worse than people think, that the experts and higher-ups in the world really do know how bad it is, and that any short term fix has a long term cost that may be more than the world can afford to pay. Beyond that I am increasingly lost?? There are simply sooo many dynamic factors in play....




Claeren.

[MoneyGuy]

Originally Posted by Slava

Hopefully out of business in Alberta....

I'm Primerica's biggest enemy but I think they have a place. They'll take the wee little clients that the rest of us won't touch and they do preach some good principals like getting out of debt. However, their licenses should be restricted so that once accounts get over a certain amount they have to send those clients to real advisors (like Slava).

Nah, on second thought, banish 'em. Banish 'em! Their slash-and-burn philosophy on WL insurance regardless of any other reasons is ill reasoned and bordering on criminal. Their training is pathetic, unless you consider rah-rah rallies to be training (and they do).

We might be careful. They're like flies; they're everywhere. I'm sure there are current or former Primerica reps (I refuse to call them planners) here.

Hah, there is a Primerica office near mine. I'd bet I outperform their whole office combined.

[ah123]

For all you money experts out there...how are the Cdn banks looking? Is it worth picking up stock in BMO or Scotiabank?