curiousJC

Are the mutual-fund investors who are pouring money back into emerging markets, junk bonds and volatile energy a) trying to make up for losses, b) chasing performance, c) headed for a big fall?

i don't really think your average investor really knows what he got into prior to October 2007 so I wouldn't expect the crowd to have a better handle on the economic outlook now....so as usual, earthings are chasing the best performing (short term) asset classes....so that would be answer B. Then again as the crowd buys high and sells low we are likely headed for C before long ....

Credit Stress Evident in TAF, TED Spreads, Elsewhere

good stuff.thanks

Don't Panic

wake up....the only real question you should be asking yourself is....."is it too late already?"....

Here's a question for you who welcome a depression....

when the house next door goes into foreclosure is your place worth more?

Also, I sure hope you have a drawer full of cash to purchase that new Toyota cause those lovely 0% interest days are going away....so long to trading your car in after 3 years.....but you're right, a Toyota will be a wise choice...it will run for 6 no problem..

but look at the bright side, with a serious recession you shouldn't see $4 gas anytime soon....

The only real danger of this trillion dollar bailout is the very real possibility of inflation...but then again, maybe you'd prefer to be underwater on your mortgage for 5 years...
wake up!

Meredith Whitney Threatens Severe Deflation For Your Portfolio

I know very little of the actual numbers as some of you, but here are some thoughts....

If banks didn't need their accountants to sign off on their financials...they wouldn't write down any of this stuff....the accountants basically act as their conscience, whether they like it or not. That's a good thing for them, because without there little chicken scratches at the bottom of the financials, investor confidence would be zero...and that would pretty much be the worth of their stock price...

I also agree that if they write it all down to fair value at once, now, then even those investors smiling because they own no banks will have a rude awakening (read armagedon). So this whole soap opera will be a very long process. The banks can't deleverage as fast as some analysts would like because they'll go broke...but that deleveraging thing is going to continue...

...So figure out how many assets will be left on the books by the time the pump monkeys deleverage their balance sheet from 20 to 10 times , then assume a ROE of 10 and not 20 which all this securitization has allowed, go with a P/E multiple of 8 and you'll have a pretty good guess of a solid entry point....now I'm just a broker, so can anyone make my life easy and do the math for me....

Meredith Whitney Threatens Severe Deflation For Your Portfolio

Let me start by saying I have waited a very long time to comment on any SA threat and I thought today, Saturday morning, was a great time...to call a spade an idiot!....But they I read the 39 comments which preceded me and realized most if not all that needs to be said, has...near the top some contributors correctly puncture all the holes in the guy's rant, then some suggest such senseless contributors should not find their way to SA in the first place, and because the "contributor" has the decency to try to back up his logic....the last few threads finally destroy any credibility this Philip guy had before he posted in the first place.

I, for one, truly enjoy a thread like this one. It's highly entertaining and as usual, somehow informative. Secondly, it only proves there are bigger idiots than said contributor out there (a.k.a. Rainheavy2002) and lastly, it allows me to continually re-access stock/industry dynamics as the landscape continues to evolve...and our collective opinions is what makes a market (i.e. Citigroup closes at 20.81 yesterday)

Case in point when I call this thread informative, I learned a new expression today...."pump monkeys"...I am confused however, as such creatures are apparently found on CNBC...and all this while I thought they held the corner offices of mid-town Manhatten's higher floors (a.k.a BANKERS).

Here's what I learned about this whole banking mess earlier this week.....

1) investment bankers true function in life is to reduce taxes for the banks or to fix their problems..case in point the creation of AAA sub-prime loans (SIVs, CDOs....blah blah)

2) I also gained a new appreciation for LEVEL 2 and LEVEL 3 asset levels at the major investment banks...Level 1 stuff is simple enough to value and a simple Bloomberg screen will get you prices and you can value these very easily...the level 2 stuff doesn't trade, but other stuff out there which it resembles does trade and therefore the banks say they can place a fairly accurate value on these assets ... the level 3 stuff only relies on the math guys model/value because their worth is truly theoretical (i.e. fictional). This leads right into what ItsJustMe talks about in his comments...until we reach the other other side of the tunnel we can only speculate how much the banks will write down, and while they sit on their hands and prey that time corrects all their excesses, or that FASB repels market-to-market accounting principles, slowly but surely some of these assets are going from Level 1 to level 2 ...if not level 3 :) My personal opinion? Bear Stearns is but the beginning...Why? Right now the smart guys at GS, (I am sarcastic here in case you miss it) are sitting on level 2 assets valued at 1000% of their capital...much the same as BSC before it blew up on re-entry...MER is in a similar boat, and really it's unfair to point out these 2 because the top 10 investment banks pretty much all have these "wacky" ratios...but I try my best to continually point out that the GS folks are mere mortals...ah, I mean pump monkeys!

For those unfamiliar with the stuff I discuss at the end of my comment you can cut/paste this piece I quickly found this morning when I googled LEVEL 3 assets...wait a second, should I be suspicious this is a sponsored link paid for by the very pretty Openheimer analyst...hahaha...

Over and out!

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