Echo To All

Why This Rally Is Unsustainable

Naufal,

ur over thinking urself here. This rally was not caused by quants or technials. There were very real economic factors that indicated and continue to lead to, stabilization. The market acted accordingly.

The economic footing will prevent a retest of the lows, the low valuations will simply not be justified.

(quant trading facilitates or exaggerates movements, it does not create a sustained market rally as we recently had)

I Doubt JP Morgan's Taking Realistic Marks on WaMu Purchase

you can depress a bride on her wedding :)

If the gov were to bring long-term mortgage rates to 4.5, and purchase treasuries wouldn't that flush out the foreclosures? Also, if the proper setting are in place, making it appealing for private capital to come in and take some of this paper off the books, wouldn't this help?

Credit Card Defaults Are Just Beginning

simmer down on the credit card defaults... everyone keeps mentioning it, but credit card debt is known to be expremely risky and defaults see a big increase during times of economic downturns.

in other words, there will be no surprises with respect to risk here... this type of debt is far better understood by the banks.

JP Morgan Offer for Wachovia Makes Sense

these rumors were flying for a few months, and now it is getting a lot more attention. but WB has been an acquirer over the years, hence do not see them being bought out. also, if JPM is primarily looking for retail operations in the SE, WB has a lot of other businesses JPM would need to divest. (the deal would seen complicated and costly)

i think jpm needs to stick to a smaller player focused in the SE. (i'm actually waiting for this rumor to be squashed so I can buy jpm... i don't want them to buy WB just yet due to the Gold West mortgage exposure. Don't know if those problems are out of WB yet.)

Credit Cards: The Next Subprime?

come on Grace... everyone working on the street knows debt from credit cards are higher risk, and understand that risk far better than they did subprime debt. Meaning, they will be taking these delinquencies into account.

not that I even have to spell it out for you (as i am sure u already know), but the difference between credit card debt and subprime debt is that a grossly incorrect assumption to risk was placed on subprime.

investors know very well in times of economic slowdown credit cards delinquencies go up. (especially when the consumer is squeezed with a higher cost of basic goods.)

so no... its not the next subprime, its just the normal increase in delinquencies from an economic slow down. Pending how severe the slow down and real inflation (not gov. reported inflation) stays high, prudent assumptions should be the delinquency rate goes higher.