The ongoing financial turmoil and financial discussion thread

[Azure]

Originally Posted by Agamemnon

I highly doubt Obama's 'sensationalism' is the reason people have lost confidence in the economy.

Actually, quite a few people in the investment business are saying the lack of direction and poor decision making is a big reason the stock market is crashing.

Some investors blame the slow-motion crash on Wall Street's disappointment with the government's $787 billion stimulus plan, its seemingly endless bailouts and the lack of specifics on how to rid banks of toxic assets.

http://seattletimes.nwsource.com/htm...ksobama10.html

Or did you 'not' read any of the articles I posted. Kramer, Krugman....they're all saying the same thing.

Exactly... my bet is he'd be doing pretty much exactly the same thing. The Republicans are voting against all the stimulus bills because they know they'll pass anyway... they need to pass. If things go down, they can say they voted against it, if things go up... great! Win/win for Republicans denouncing the stimulus.

Actually, the only Republicans voting for the 'bills' are those that stand to benefit from it. I.E. earmarks. Quite hilarious actually.

http://www.foxnews.com/politics/2009...lion-spending/

But it may come as no surprise that almost all of the Republican senators who are either expected to support the bill or are considering supporting the bill have billions of dollars worth of earmarks in the package.

[Nancy]

Markets turned sharply higher today on news of Citigroup profits in the first 2 months of the year.

[Agamemnon]

Originally Posted by Azure

Actually, quite a few people in the investment business are saying the lack of direction and poor decision making is a big reason the stock market is crashing.

That's different than saying Obama's 'sensationalism' is the problem, I don't think he's under or over-stating the nature of the economic emergency.

Or did you 'not' read any of the articles I posted. Kramer, Krugman....they're all saying the same thing.

I read the article. Looks like they're saying, "There is an economic collapse right now, and Obama is President for it". Hardly damning. The end of the article says;

"Jon Merriman, chief executive of brokerage Merriman Curhan Ford, cautioned that the stimulus package will take time, probably six to nine months, to work its way through the economy.
Time is something Obama has plenty of. Ronald Reagan wound up with a healthy 135 percent gain on the Dow for his time in office. Gerald Ford picked up a respectable 23 percent for his shortened term.
"The guy's been in office for two months," Merriman said of Obama. "We gave the last guy eight years. Let's give this one some time."

Or did you 'not' read any of the articles I posted. Kramer, Krugman....they're all saying the same thing.

Oh, and 'learn' how to use 'quote' marks... your 'continued misuse' of them makes 'baby' Jesus 'cry'. 'FYI'.

[Cowboy89]

Originally Posted by Nancy

Markets turned sharply higher today on news of Citigroup profits in the first 2 months of the year.

That news is a lot more important than people think. Citibank used to be the world's largest bank and as such is a major counterparty in a huge percentage of world financial transactions. They are the real posterchild of an entity that is 'too big to fail.' Any positive news from them should improve the markets.

[Red]

Originally Posted by Slava

I don't think that we are talking about different things though. Your posts there indicate that people shouldn't take out HELOCs and spend the cash there on new TV's, etc. I'm saying basically the same thing here. Sure the bank gives you the money, but you still have to be responsible with those funds?

I didn't see any resident financial advisor say to take out a HELOC and get over-extended on new cars and TV's though...unless I missed that?

But there was a lot of the borrow to invest talk as well. Someone (can't remember who) guaranteed me 7% returns on this very site. The consensus was that real estate and stock market never go down. And the few who questioned that got ridiculed.

[Cowboy89]

Originally Posted by Azure

Actually, quite a few people in the investment business are saying the lack of direction and poor decision making is a big reason the stock market is crashing.

I think you overestimate Obama's impact on the economy vs any other person should they have been President during this period. There are plenty of other factors at work. I dislike him in the role of President almost as much as you and for the same reasons, but there's really little the US government can do but keep increasing the money supply until growth occurs again.

There's also the concept of economic lags in which it would be pretty presumptious to be demanding results in March from someone who was sworn in a month and a half ago. A bigger part of what's happening is the fallout process from the crash in September/October as individuals and business' are delevering themselves to adjust to the new paradigm. I see pretty much nothing anyone can do to stop this and recovery to happen on it's own terms regardless of how much money gets pissed away in the mean time.

[Slava]

Originally Posted by Red

But there was a lot of the borrow to invest talk as well. Someone (can't remember who) guaranteed me 7% returns on this very site. The consensus was that real estate and stock market never go down. And the few who questioned that got ridiculed.

Well over the long-term though that is a likely outcome. Frankly at this point borrowing to invest looks like a no-brainer. Rates are low, markets are low and in 4-5 years you could look like a genius,

I know what you mean though. I particularly like to mock some of the "experts" who predicted the TSX at 16,200 last June and $200 oil at the same time. It would be hilarious if it didn't crush the hopes and dreams of so many people.

[Agamemnon]

Originally Posted by Cowboy89

I think you overestimate Obama's impact on the economy vs any other person should they have been President during this period. There are plenty of other factors at work. I dislike him in the role of President almost as much as you and for the same reasons, but there's really little the US government can do but keep increasing the money supply until growth occurs again.

There's also the concept of economic lags in which it would be pretty presumptious to be demanding results in March from someone who was sworn in a month and a half ago. A bigger part of what's happening is the fallout process from the crash in September/October as individuals and business' are delevering themselves to adjust to the new paradigm. I see pretty much nothing anyone can do to stop this and recovery to happen on it's own terms regardless of how much money gets pissed away in the mean time.

Exactly... I'd like to see the President who would have things ship-shape by now...

[Phanuthier]

Originally Posted by Cowboy89

That news is a lot more important than people think. Citibank used to be the world's largest bank and as such is a major counterparty in a huge percentage of world financial transactions. They are the real posterchild of an entity that is 'too big to fail.' Any positive news from them should improve the markets.

Cowboy maybe you can answer this for me, but is the reason the feds are going to keep AIG and Citi alive (no matter what) because if either fail, the US economy will be bombed to the stone age? You had mentioned Citi (which I had agree) but if fully dies, it would trigger a ripple in many of the institutions (JPM? Wells Fargo? BoA? GE?) that insure investment? That, in turn, would kill the credit for companies that depend on credit to run operations? (i.e. every company out there)

[Calgaryborn]

Obama has had a serious impact on this economy in words and deeds. First of all he has been overly pessimistic on his soap box in order to push his stimilus bill through and now his huge budget. This has caused thousands who were hanging on to devalued stocks(in the hope of a recovery) to lose hope and sell. This has worsened the economic picture by futher restricting cash flow in those companies. Secondly, Obama's stimilus package is seen for what it is: a hugh spending bill that fullfills many of the Democrat's wish lists but, will do little for the economy and create a lot of debt which translates into higher taxation. Obama's cap and trade proposal for the energy sector will hurt the economy and take a lot of money out of taxpayers wallets when many taxpayers are already struggling. Obama won the election on a platform of hope and change we can believe in. As President he has failed to offer hope and the changes he is instituting no rational economist can believe in.

Lars Larsons has proposed an interesting idea which would free up capital in the banking system without making the taxpayer accountable for the banks bad debt. He has suggested that the Fed offer a refinancing of home mortgages that are not in default. They would offer a rate of 4 or 4 1/2% and finance the loans by selling treasury bills which are sold at 2 1/2% and give 1% to the banks for handling. This would put money back in the pockets of millions of Americans which would move some back from the brink and give others more money to spend on goods and services. The Banks would have billions of dollars all of a sudden which they would need to invest by giving out loans.

[Cowboy89]

Originally Posted by Phanuthier

Cowboy maybe you can answer this for me, but is the reason the feds are going to keep AIG and Citi alive (no matter what) because if either fail, the US economy will be bombed to the stone age? You had mentioned Citi (which I had agree) but if fully dies, it would trigger a ripple in many of the institutions (JPM? Wells Fargo? BoA? GE?) that insure investment? That, in turn, would kill the credit for companies that depend on credit to run operations? (i.e. every company out there)

Exactly. Think of it this way, almost every insurance company, and financial institution has a significant exposure to potential defaults from both of these firms. If everyone else was as healthy as they were a few years ago, we'd be able to weather it, but many of the banks are in a bad state as it is. If you let AIG and Citi fail, you're pretty much forcing half of all US banks (BofA is next on that list) and a multitude of foreign banks into ruin right there. A lack of support and bailouts of FI's is what turned the 30's recession into the great depression. If you think credit availability is bad now imagine what it would be with half the players missing.

That's really the hard part for everyone to swallow is that mismangement by CEOs heading Financial Institutions caused these problems and letting them off the hook almost entirely for it at the expense for everyone is pretty much the only way to recover from it. The bad politics behind this is really what's behind Obama blowing money on 'PR' friendly things as well. In actuality if all bailout money went into bailouts only for FIs a lot of everyday corporations and companies would be better off as well because they would have better access to the credit markets.

[Azure]

Originally Posted by Agamemnon

Exactly... I'd like to see the President who would have things ship-shape by now...

I don't think anyone is 'expecting' things to be normal right now.

I'm questioning his economic policies....and apparently so are a lot of other people. Thats all.

[Daradon]

I think the problem is Obama can't be as visionary as he WANTS to be. I think if we saw a bill from him that didn't have to cater to congressional demands (at least in the idea of garnering support), on both sides, we would have seen a better bill.

I think his economic policies (at least what I've heard, obviously not a lot to judge on yet) are pretty sound. I think Washington is f-ing it up as usual.

[Azure]

Originally Posted by Daradon

I think the problem is Obama can't be as visionary as he WANTS to be. I think if we saw a bill from him that didn't have to cater to congressional demands (at least in the idea of garnering support), on both sides, we would have seen a better bill.

I think his economic policies (at least what I've heard, obviously not a lot to judge on yet) are pretty sound. I think Washington is f-ing it up as usual.

Assuming of course that he actually wants to provide a bill without all the Congressional crap.

But yes, Congress is going to screw up a lot of things too. You just KNOW Pelosi and Reid have their greedy hands involved in everything Obama does.

[Azure]

Another article about the first days in office as POTUS....this time the author is jumping on his 'staff.'

http://www.salon.com/opinion/paglia/2009/03/11/mercury/

[Azure]

Apparently the Chinese 'stimulant' is working.

http://www.bloomberg.com/apps/news?p...DYY&refer=home

March 10 (Bloomberg) -- China vehicle sales surged 25 percent in February, the first gain in four months, after the government cut taxes on some models, helping the country extend its lead as the world’s largest auto market this year.

“Consumers are regaining confidence because of the government’s stimulus policies,” said Ricon Xia, an analyst at Daiwa Research Institute in Shanghai. “Still, vehicle sales may fluctuate in the coming months.”

[macker]

Originally Posted by Azure

Apparently the Chinese 'stimulant' is working.

http://www.bloomberg.com/apps/news?p...DYY&refer=home

__________________________________________________ ___________

The last 3 PMI #'s out of China have been good. It looks like they will beat the US to recovery. I guess according to Harper it will be 1. Canada 2. China 3. US Still waiting for some shocking news that I think will be comming as things have been much too quiet and stable the last day or two, but a bear market rally was over due...China uses a lot of Copper and Copper seems to have based here. Likely belongs in the Stock picking thread but if you want a great Canadian company that will benefit a lot from this check out IMN (Inmet Minning). They have Gold, Zinc, and a lot of Copper and they will do very well if in fact this recovery is for real...they have always been low profile but consistently delivered. Many of these Canadian mining companies offer a nice bet on China with a much lower risk then trying to buy ADR's or going direct or buying EEM where you have currency risk....Or if you want more of a speculation vs an investment there is always Teck Cominco and if they figure out a way to make the large payment they have comming due in October they could double, triple, or even more....Eventually many our great mining companies are going to be taken out so not a bad thing to hold while you wait for the line up to build....and if recovery is comming it could be quite rewarding!

[Slava]

Irrefutable evidence that the TSX is breaking out of its slump ():

http://www.globeinvestor.com/servlet...n0311/GIStory/

Jeff Rubin predicted a 16,200 point close for 2009 when the market was at about 15k. He predicted $200 oil when we were at about $135 and rising. Almost right away the market reversed and shattered those predictions!

Today he says we are due for 7000 before a year end of 9000 if we're lucky. So naturally you have to do the opposite of what he says!

[troutman]

No time to read through the whole thread to see if this has been mentioned, but have you been watching Jon Stewart go off on Jim Cramer and CNBC?

http://www.youtube.com/watch?v=LXlFnYV0y4M

http://www.huffingtonpost.com/2009/03/10/jon-stewart-slams-jim-cra_n_173738.html

If you listened to them you would have one million dollars . . . if you started with one hundred million dollars

[RougeUnderoos]

Originally Posted by troutman

No time to read through the whole thread to see if this has been mentioned, but have you been watching Jon Stewart go off on Jim Cramer and CNBC?


http://www.huffingtonpost.com/2009/03/10/jon-stewart-slams-jim-cra_n_173738.html

If you listened to them you would have one million dollars . . . if you started with one hundred million dollars

Yeah, I've followed that a bit. Cramer pulled the "O'Reilly Special" when asked about this on some morning show yesterday.

Instead of fessing up to, you know, being completely wrong, he said "this is from a comedy show, Stewart, he runs a variety show".

If he wasn't such a screaching, pretentious blowhard and if MSNBC didn't constantly talk about how smart they all are, he would have been left alone. He put that big ol' target on his back and it was hit. If he has any sense, he'll let it go.