you_can_call_me_Al

This Isn't a Bottom, It's a Disturbance in The Force

That Obi-wan quote pretty much sums it up.

This Bear Market is Worse Than I Thought

Don't feel too badly about getting caught unawares. NOBODY could have expected this kind of move downward. There are few precedents, and none of them were predictable.

Good luck with holding.

There's Light At the End Of This Tunnel

I almost wrote you off as being Polllyannish, but you roped me back in with "bear market rally."

I think you're spot on with the impending opportunity. We are almost certainly due for a snap back upwards. The problem, of course, is timing it. When it comes, it will probably come quickly. Move in too soon, and, well... it could cost you. Two days ago, there were plenty of folks screaming "this is it" and "shorts are idiots." Today, those people are down around seven percent (annualize THAT, suckers).

Yeah, there's probably a short term rally coming, and it will be a great way to make some quick cash if you can get the timing right. Dangerous, but, wow, you gotta try. Those of you thinking about how very obvious it all is... a little humility, please. None of us really know diddly.

Congress' Economic Literacy (Or Lack Thereof)

Is it true that the bill allows bailout money to go to properties held in other countries?

A Bad Day, Yes, But Enough with the Hyperbole

One thing that strikes me is the number of large 100+ year old institutions that have gone bust because of this thing. Is it a "crisis?" Not sure, but it is interesting to note that the firms that got taken out were able to survive the Depression. Don't know exactly where this is leading, but that does make me think.

5 Ways to Diversify Away from the Dollar

Thanks for the article. This same thought has been on my mind, and I've been wondering how to hedge myself.

Couldn't agree more about the world's unwillingness to lend us money at such ridiculously low rates. My God. Of course they'll get paid back, but in dollars that have a hell of a lot less purchasing power than the one's we're using today. Gee, do you think Chinese economists understand that? I'm kinda guessing they do.

What Effect Will Hyperinflation Have?

To those of you counting on China to be a safe port in any upcoming storms, think twice. After WWII the U.S. got rich because we were one of the few countries with an intact infrastructure. In addition, we had enormous natural resources. Both were used to basically rebuild the world, and we got paid for it.

China, while definitely destined to eat our lunch, is not going to be rebuilding the world. They, instead, produce cheap toys and Nike knockoffs. They sell us all that crap we like to buy. In a true meltdown, if it happens, no one is going to be running out to buy the latest Ipod (or anything else). Business will suck for everyone, though I do admit they would be a lot better off than the U.S.

glta.

Details of the Financial Bailout Package

It's LOSE damn it. God, that's even worse than "divident."

A Paulson Fan's View of the U.S. Mortgage Company

Wow, there are a lot of folks here who really have no idea how bad this thing could have been. Do you really think this is just about bailing out the old boy network? Folks, the entire financial network was sitting on quicksand. Paulson put a foundation under it, and yes, we're paying the upfront costs.

On the upside, we, the taxpayers, actually stand to make out pretty well. First of all, Wall Street probably won't melt down now, and you guys won't lose your jobs. Most of you are in "unrelated" professions, but following that melt down, you'd probably still be hurting ...bad. No credit, no loans. No loans, no businesses. No businesses, no employees. No employees, no customers. No customers, no jobs, etc.... There's some hyperbole here, I know, but not much. This thing was a big shit sandwich, and we all would have had to take a bite.

Second, these "bailouts" were more akin to vulture capital. AIG, for example, basically just needed a bridge loan so they could make some short term payments. After that, they'd be able to sell some assets to pay off their bad bets. The short term money crunch threatened to destroy them. So Paulson, like any good Wall Street shark, gutted them. "Here's a relatively small loan at a very high interest rate, plus, oh yeah, 80% of everything you own." They were dying, so he robbed AND raped them, and they had to thank him for it. ...And you're complaining. Jesus.

The key to this whole thing was time. Someone with skads of cash (like the U.S. government) and no time pressure stood to make tons, and Paulson recognized it. Make this guy king. At this rate he wouldn't need taxes in five years, and in ten the government would be paying you dividends.

He saved our asses. Get the man a medal.

An End to Efficient Market Theory

Agreed. It will be hard to watch the extraordinary bounce that's coming, but, yes, the cat is dead. Sometime in the next few months I'm expecting to see some real, honest-to-God panic, and I don't want to be anywhere near it when in happens.

Yes, I'll be missing the bounce, but there's no way to know when that will start or where it will stop. Since the long term trend seems pretty clear, it's time to develop some patience.

Take a look at the historic actions taken by the Fed, then ask yourself if you really think your being on the sidelines will cause you to miss out on the next bull market. I think not.

Lehman Bankrupt, Merrill Swallowed, AIG Wilting: What It All Means

Jason, thank you. You are completely correct. When there is a run on the banking system, you don't stand by and let the invisible hand slap the shit out of you. Similarly, you don't let it pick up a weapon and shoot your family, your neighbors, and their dog. You get creative and do whatever you must to stop the contagion from spreading.

Lehman Bankrupt, Merrill Swallowed, AIG Wilting: What It All Means

1) Yes, the sky appears to be falling at market bottoms, but that doesn't mean we're at the bottom because the sky appears to be falling. Things look terrible halfway to the bottom too.

2) Crude hit a low because the economy is tanking. Lowering a price from "totally unaffordable" does not make it cheap.

3) The current PE depends on the P AND the E. 14X is still high by historical standards, and if you don't believe the earnings will hold (and I don't), then it's really a higher ratio than you think.

4) The economy is not growing at a 3.3% clip. The number is complete, well, ...bullshit. They used a fictitious inflation number. If you really think the economy is growing that robustly, then maybe you should look out of a window.

5) The dollar is not rebounding against other currencies, they are falling to our level because their economies are also slowing (that's bad for us). Having everyone fall down after you doesn't mean you got back up.

A recovery will come (oh sorry, I forgot we're not in a recession), but that requires business expansion, which requires loans, which requires that most members of your financial sector not be fighting for their survival. The recovery will come, but it will be awhile.

Think about it. Fannie and Freddie have effectively been nationalized, 100+ year old firms are going belly up, housing continues to fall, the Fed is low on dry powder, we're still involved in two expensive wars, the global economy is slowing (not bottomed, SLOWING), consumers are in debt up to their eyeballs, and, most importantly, the financial firms that fuel recoveries DON'T HAVE ANY CASH.

We are not close to the bottom. Hate to sound negative here, but please. Just because everyone knows something is obvious doesn't mean they're wrong.

An Optimist Looks at the Market

To those of you who believe that now is the time to invest because everyone is fearful, you may want to think that through. It's true that everyone is pessimistic at the bottom of the market, but they're also pessimistic on the way down. That little fact escapes folks looking to make clever summations.

Just because everyone believes something doesn't mean it isn't true.

Joy Global: Waiting for Hedge Funds to Finish Dumping

Your observations seem reasonable, but you fail to follow through to the logical conclusion. You are correct in pointing out that knowing when the hedge funds are finished their irrational dumping is impossible. Therefore, when the company approaches a price for which you would willing buy it (the company, not just a few shares), then it's time to enter a position. If the hedge funds continue to dump after that, why not thank your lucky stars and buy more? Have patience, and the courage of your convictions.

Investors: Down the Rabbit Hole

Why do you think anyone cares about you?