Not so nice to be calling people out when you live in a glass house. In my mind it usually leads to broken windows.
That's the overall strategy. Not to say stocks weren't good investments for a couple of generations, but the crisis in confidence happening now has already and will continue to change that paradigm. The paper game is on it's way out.
I remember when Washington Mutual was having all kinds of problems and finally decided to take my money out and ended up being the day before they got sold. Chase kept sending me offers to open my account back up again so took $200 in incentives from them and after the time period ended closed my account...lol. No way was gonna support their shenanigans so went with a solid local bank.
Yup and talking about failed states the budget cutbacks with the current deal will hurt US states that are already struggling.
I didn't say it was useless...you did. I said it would soon be worthless and still believe that. My cash is in the local bank and I sleep just fine.
What's a 'relatively small move' and what is a 'very short span of time'? Like I said before I'd seriously like to know how you define that. Where is the line between 'trading' and whatever else it is that you call something other than 'trading'?
Everyone notice how quickly many of the CEOs ran out on CNBC and other major networks to give ponzi pep talks and "reassure" the markets last week? They were nervous. This should subside for a few days. Get so low volume meltup rallies and then come roaring back into the headlines.The fact that European banks have just a tad more leverage compared to their US cousins has been well-known for quite some time. One need merely to look at the chart from our February 2010 post to see how American financial institutions stack up relative to European ones as a %-age of host country GDP. This issue came to a very violent head last week when market participants finally realized the painfully obvous, namely that even without direct Greek exposure (and there certainly is a lot of that), SocGen is simply not a viable business model for the long-run courtesy precisely of its tremendous leverage. And unfortunately, while SocGen's CEO was quick to appear on any TV station that would have him and deny rumors of the bank's viability, he had little if anything to say about the bank's actual solvency and leverage. Alas, therein lies the rub. As the attached table created by Jean-Piette Chevalier demonstrates, SocGen is back at the leverage it had back in 2007 at just over 50x. As a reminder, not even Lehman was this bad when it blew up (and that excludes the beneficial boost from Repo 105). In other words, SocGen has a Tier ratio of 2.0%... a number which the bureaucrats at Basel will have no choice but tell the bank must go up. And go up it will... assuming SocGen can issue €84 billion in new capital to pad its equity (on €19 billion of market cap... mmhmmm). Of course, in order to raise capital, SocGen would have to admit that the market was, in fact, correct in its assessment that the bank was undercapitalized, which would then send the stock even lower, and so forth, chicken or egg style. While we doubt any of this is new to the market, we doubt the response will be one of buying euphoria. Luckily, the only thing that can send the price tumbling now is actual selling, as opposed to shorting. And as we all know, nobody could possibly sell stocks: after all it is simply the evil shorters who are responsible for every market collapse in history, never the long idiot money which never did its homework, and suddenly becomes the last bagholder standing and first to bail from what is obviously a disastrously bad investment.
The first August leading indicator starts off with a thud, after the Empire State manufacturing index just confirmed that the recent brief push higher was, well, transitory. Printing at -7.72, on expectations of 0.00, down from -3.76, the first diffusion index of the month just saw a third consecutive contractionary print in a row, setting the stage for much more ugliness in August. The summary was succint: "Business conditions continue to deteriorate: "The general business conditions index fell four points to -7.7. The new orders index also fell, inching down to -7.8; the negative reading—the third in a row—indicated that orders had declined. The shipments index held steady at 3.0, a sign that shipments were slightly higher over the month. The unfilled orders index continued to drift down, falling three points to -15.2. The delivery time index was little changed at 0.0. The inventories index dropped two points to -7.6, suggesting that inventory levels were down slightly." What is surprising is not that the current outlook is deteriorating, but that for the first time, the future index finally cracked as the hopium has finally ran out: "The future general business conditions index fell twenty-four points to 8.7, its lowest level since February 2009. The future new orders and shipments indexes dropped to their lowest levels since September 2001." I.e., hope is no more. And there is nothing to take its place.
I'm liking this little meltup from the recent lows...patiently waiting to pull the trigger again.
That's what I'm thinking. Not much buying excitement in the recent run up from the lows and also...
I saw an "economist" the other day trying figure out which way was up and down.
That's why the trouble is never going to go away until it finally implodes.
I hope this economist knows his ass from a hole in the ground unlike his buddies.
I think this may really be nothing more than a typical bear trap. Forget the background noise here.
