JCC

Five Reasons the Market Could Crash This Fall

"I am officially going on record now and stating that IF the S&P 500 hits 1,000, we will see a full-blown Crash like last year."

The S&P 500 is above a 1,000. If it doesn't crash, what will be your penalty? Will you admit that your premises are incorrect?

The Next Goldman Acquisition

I'm laughing and smiling. I purchased Goldman in November. It is a great investment and I don't know how high it will go. They really have it made for some years.

What a good deal investment!!!

U.S. Government's Economic View - From Gloomy to Optimistic

On Apr 19 11:43 AM rennert wrote: "I thought the market and the financial tv stations are talking suddenly as if everything is fine and wonderful. They even shut Robbini up. I guess they stuffed a big sock into his voice box."
----------------------...

First of all it is Roubini and not Robbini. Secondly, he has reported multiple times that he agrees with the Geithner plan. They did not stick a sock in his mouth. Following are three Roubini quotes:

"In my view, the Geithner plan can work for those banks that are going to be found after the stress test to be solvent. They still have toxic assets. You have to buy them. That is a good plan. But if some banks are found to be insolvent beyond pale, then that plan doesn't work because then the write-down implies insolvency. For those banks, I'm still of the view that you would rather take them over, rather than keep them as zombie banks, clean them up and sell them back to the current sector."

Secondly Dr. Roubini states:
"There’s still some pain ahead. We’re going to lose $3.6 trillion when all is said and done. The nation’s banking system is essentially insolvent. And even if all the government intervention works perfectly, there’s so much to repair that the recession will not end this year. Even in 2010, economic growth will be far from robust. And the nation’s unemployment rate, which will remain high after the recession recedes, may peak at 11 to 12 percent."

Thirdly from Dr. Roubini:
"The worst of the credit crisis is behind us. Roubini says the economy is beginning to heal from last fall’s market tumble and the financial system crisis, in large part because of aggressive government fiscal and monetary policy. "

I mostly agree with Dr. Roubini. In addition, we have multiple investment opportunities as we recover from this world wide financial crisis:
1. Selectively invest in stronger banks - Some of them are amazingly good deals, even today. With the government actions that were required to thaw the financial markets, banks have capital at a very low price. Many will will continue to sky-rocket for some time.
2. Energy should start to recover, and since exploration and development have stopped, the resulting recovery will provide great opportunities. The world needs energy.
3. Asia is already recovering, and will recover much faster than the rest of the world.

For the rest, a lot of damage has occurred and will take quite a while to recover. But recovery is happening, providing that the world continues it's efforts to stimulate. James West, you are correct it is a fish market. It's time to go fishing.

FASB Unlikely to Suspend Mark to Market

It is ridiculous to use Mark-to-Market in lockstep to a crashing market. Perhaps something like a one year moving average would be better. Marking assets down with a crashing market is absurd. Marking them down, when you expect them to stay down is reasonable.

If we get out of this mess, many assets will recover. Mark-t0-Market has caused panic selling and added to the overall decline.