The ongoing financial turmoil and financial discussion thread

[metallicat]

When was the last time the DOW was this low? It's around 7500 right now, down 400 or so.

[Arsenal14]

Looks like October 2002. If it goes much lower then you have to look back to 1997. Similar for the TSX which is around 7700 at the moment, last seen in 2003.

[red sky]

CNRL (ticker CNQ) dropped $10 today. Absolutely insane.

[kevman]

CNRL and Nexen were both hammered for >20% losses so far today.

Ecana down ~13% so far and Oil Sands Quest down a whopping 30% so far...

[Phanuthier]

I was watching the DOW - went to go to a talk and the DOW is at -40, I come back an hour, its -440. Almost fell out of my chair.

Claeren - your 7300, I'm starting to believe... might be a possibility.

[Nancy]

Originally Posted by Phanuthier

I was watching the DOW - went to go to a talk and the DOW is at -40, I come back an hour, its -440. Almost fell out of my chair.

Claeren - your 7300, I'm starting to believe... might be a possibility.

One more day like this and it's a certainty.

Dear lord, did the S&P 500 really lose almost 7% today?

And the TSE 9%!

[Phanuthier]

Originally Posted by Nancy

One more day like this and it's a certainty.

Dear lord, did the S&P 500 really lose almost 7% today?

And the TSE 9%!

Well you had to see the TSE drop, especially over the next quarter. Thats not the least bit surprising in my eyes. Any economy that relies on the US economy usually lags a quarter to 6 months, so I'm sitting tight on the Canadian stocks though I keep getting seduced by good Canadian companies flaunting incredibly low prices. Same thing with Emerging market (mostly funds, some stocks) who I know will give the 100x's return, but should suffer for at least a quarter and possibly two.

US stocks though, when you start seeing the DOW and the NASDAQ where it is, and moreover the 10-20 stocks I keep my eye on, I have to think these are good buys - even though shattering (so to speak) the DOW and NASDAQ's resistance levels indicate a deep recession or depression. None the less, I'm still actually sitting >0 in my investment portfolio this year due to some pretty solid investments, e.g. overall ROI in the positive %, this year (somehow miraculously) so I'm a little more willing to take that gamble.

[Nancy]

Frik-a-frak, we have $40 oil ($48.85 Nymex future, $45.67 spot.)

[Claeren]

That is what I am here for! lol

Cue the 'NOW it is market bottom and time to buy' talk!


As I have said a few times now, volatility rules the day right now (just like during almost the entire depression, where records were set for both one day losses AND one day gains) so I am sure the markets will keep bouncing up and down. Just don't get tricked by those 'ups'. The thing that makes me nervous is that 9-of-10 friends who invest right now all think the same thing, 'the market has hit bottom so buy-buy-buy', and that was at a ~8300-DOW! When most people who actually invest are all invested because they think 'it has to go up' it seems to me we are set to keep falling because it never 'has to go up'. If anything, i see a lot of amateurs out there getting hammered while the big boys sell off their positions all the way down....



On a side note though, regarding the Real Estate discussion in the other thread, as I had predicted Calgary home sales have hit a wall and this months numbers are looking worse and worse each day. We are talking outright BAD nightmare scenario numbers for home owners, not just a bit depressing....



Claeren.

[Phanuthier]

Always enjoy your insignt Claeren, just as I enjoy MoneyGuy's and Slava's. I like to see a balance of arguments from all sides and perspectives, and make my own call in the end. You're like their arch nemisis.

I have to admit, I bought a bit in Sept and some yesterday, so I've lost a few hundrea $. No biggie though, I don't really concern myself with being a trader and timing the market. I paid discounted (or at least, fair) prices for good quality companies that have short and long term historical profitability with strong management, deep pockets to ride out the recession. As the smarter investor says, its better to pay fair price for a good company rather then a good price for a fair company. (Unless Ford falls below 20 cents, then I'll give Ford a roll lol)

[Nancy]

Originally Posted by Claeren

<SNIP>


On a side note though to the Real Estate discussion in the other thread, as I had predicted Calgary home sales have hit a wall and this months numbers are looking worse and worse each day. We are talking outright BAD numbers for home owners, not just a bit depressing....


Claeren.

Come, come, now... not too much bad news at once. Let's save the real estate talk for December 1st. The Vancouver numbers in particular will be very interesting.

[metal_geek]

Originally Posted by Claeren

That is what I am here for! lol

Cue the 'NOW it is market bottom and time to buy' talk!


As I have said a few times now, volatility rules the day right now (just like during almost the entire depression, where records were set both in losses AND gains) so I am sure the markets will keep bouncing up and down. Just don't get tricked by those 'ups'. The thing that makes me nervous is that 9-of-10 friends who invest right now all think the same thing, 'the market has hit bottom so buy-buy-buy', and that was at a ~8300-DOW! When most people who actually invest are all invested because they think 'it has to go up' it seems to me we are set to keep falling because it never 'has to go up'. If anything, i see a lot of amateurs out there getting hammered while the big boys sell off their positions all the way down....



On a side note though to the Real Estate discussion in the other thread, as I had predicted Calgary home sales have hit a wall and this months numbers are looking worse and worse each day. We are talking outright BAD numbers for home owners, not just a bit depressing....



Claeren.

The Real Estate market in calgary is beyond BAD... I don't know where it's gonna stop either. Seems to me with so many people in negative positions when it comes to home values VS Mortgage + HELOC, as long as they still have a job things stay on a slow downward pace (by slow I mean relative to a crash). If a big layoff comes anywhere close to the city, I think thats the straw thats gonna break the back of the market and we'll see the "Crash" when foreclosures appear on the market.

The question is when do we see Layoffs downtown?

[Bertuzzied]

Man, how stupid am I? Not pessimistic enough. I covered my shorts on Ebay,Yahoo and Apple yesterday. eek!

[Phanuthier]

Originally Posted by Claeren

It looks like Citi Group is on the brink:
http://finance.yahoo.com/news/Citigr...-13634423.html.

This just coming down the wire:

http://www.reuters.com/article/funds...41089420081120

Why the hell is Citi bidding...?

I'm hoping JPM gets it cause, uh well, I own JPM stock.

[kevman]

Originally Posted by metal_geek

The question is when do we see Layoffs downtown?

We're half way there...our HR department has a "freeze" on hiring until further notice. Nothing official I presume but that's the word at the water cooler...

[Phanuthier]

Originally Posted by metal_geek

The question is when do we see Layoffs downtown?

I know this isn't Calgary, but for those that invest in tech, the past 3 weeks have seen tons of layoffs (mostly Application Engineers), reduced hours per week, and a few projects cancelled.

I do, however, know 2 blue chip tech companies that have their stock dropping but they're still trucking along quite healthy.

[Slava]

Originally Posted by Phanuthier

Always enjoy your insignt Claeren, just as I enjoy MoneyGuy's and Slava's. I like to see a balance of arguments from all sides and perspectives, and make my own call in the end. You're like their arch nemisis.

I have to admit, I bought a bit in Sept and some yesterday, so I've lost a few hundrea $. No biggie though, I don't really concern myself with being a trader and timing the market. I paid discounted (or at least, fair) prices for good quality companies that have short and long term historical profitability with strong management, deep pockets to ride out the recession. As the smarter investor says, its better to pay fair price for a good company rather then a good price for a fair company. (Unless Ford falls below 20 cents, then I'll give Ford a roll lol)

I wouldn't say that Claeren is my arch-nemesis (can't speak for moneyguy!). I do understand the sentiment that he sometimes posts...but if you aren't looking at buying in the near future you have to have some very good rationale for missing the enormous potential gains.

[Phanuthier]

Originally Posted by Slava

I wouldn't say that Claeren is my arch-nemesis (can't speak for moneyguy!). I do understand the sentiment that he sometimes posts...but if you aren't looking at buying in the near future you have to have some very good rationale for missing the enormous potential gains.

Oh trust me, I've bought in quite a bit the past 2 days (and a bit in Sept)

Like I said, I make my own calls. I enjoy views from all sides of the spectrum. Claeren has been pretty much bang on with his pessimistic views, but I don't expect him to always be right; I also tend to see the opportunities you and MG post as something that parallel my line of thinking. I sort of see 4 rounds that I would like to drop $ in, and this week was round 1. (The other rounds being tech, emerging markets and general)

[Red]

I think people should try to get more HELOCs so they can buy spec houses and stocks.

Use the cheap credit to your advantage.

[Claeren]

Originally Posted by Slava

I wouldn't say that Claeren is my arch-nemesis (can't speak for moneyguy!). I do understand the sentiment that he sometimes posts...but if you aren't looking at buying in the near future you have to have some very good rationale for missing the enormous potential gains.

Well that is admittedly a lot easier to say (in DOW terms) at 7500 than at 8300 and easier at 8300 than 10,000, 12,000, 13,000.

Obviously after the market gives up another 10% buying is better than it was before giving up another 10%.


My concern is more about people holding enough cash to ride out any pain they might have coming their way. Cash will allow you to ride a bit if you lose a job or if your parents or siblings need financial help. After that it is about being able to jump on the BIG opportunities that are going to start popping up as many/most people are seriously over-extended and need to liquidate, whether it is houses, toys, cars or stocks (etc).

Cash is not such a bad thing in this market and I really do not see massive gains any time soon. This market is not going to shift back positive and climb 400 points/day for 10 days straight. We are talking about an American financial system on the brink of collapse. If this were ANY other country on earth it would have already crumbled.


I look at it this way: AIG, ALL of the major iBanks, and at least one of the big banks (if not two or three) should have failed already and at least 2 out of 4 of GE, GM, Ford and Chrysler will also fail before this over. I am not sure how anyone is going to miss out on anything without those questions answered.

The only way I can see people being well off investing heavily right now because 'it is bottom' is because they believe NONE of those companies will fail AND the cost of keeping the remaining afloat holds no long term cost to the economy.

I know I believe otherwise, that whether they fail or whether american-corporate-welfare/socialization holds them up, this market is totally fubared.

Easily another 5%-20% drop if just one(!) fails.

That is when I am looking to buy. Assuming none of the other 3 look doomed at that point (which they probably will, Chrysler especially IMO). As millions face unemployment and the junk bond market losses billions (trillions?) the markets will buckle and real opportunities will be there for those with cash.

Inversely, if the government keeps printing trillions(!) to cover all of these holes it looks better short term in terms of the markets, but starts to look arguably even bleaker over the long term. At least if they fail outright America can take that tough look in the mirror that they need to take and start looking at the root problems of this financial breakdown. Bailouts just put off the inevitable IMO.




Claeren.