Tuesday, 14 October 2008


yo!...night atta opera...innit..!

PALOOKAVILLE FINANCIAL stardate capitulation day+26

...alla kings orses an alla kings men have joined forces ta put
humpty dumpty back together wi vinega an brahn paper...

...shocks an scares is rocketin on relief that itz all ovva...

newsnight : it all gon be cool nah man...fat lady sung innit!...
...lez kick ass on who dunnit...

watson : i say holmes old boy...time fo a spot a bubbly wot?

holmes : everything may not be as it seems...

watson : wot fo yo such a sad sakka sh*t shamus?

holmes : elementary! watson old boy...elementary...

watson : an?

holmes : house prices still fallin dude!...stiffs still skint, in debt an scared...
...truth still not out there...trust still gon walkabout...

tim knight : "...As for equities in general - - I said very plainly I was looking for a rise "between 1050 and 1100" on the S&P. At this rate, we'll be there tomorrow! (Although I really doubt "this rate" will continue; today was, after all, a relief rally with huge, pent-up demand). In any event, the opportunity to get really bearish again won't require a lot of patience.

market ticker : "...The resistance to forced truth-telling is maddening folks. It has been going on now for over a year, and until it stops, I just don't see the market normalizing. I know the counter-argument - "everyone is broke" - but if that's the truth, then let's get on with it, because we're only delaying the inevitable. You can't make the broke un-broke, you see. If we need to set up some state-sponsored banks (to do it FAST) and then spin them off in IPOs, letting the existing system die, then so be it.

Perhaps such a time would be a good opportunity to include The Fed in this sort of forced replacement, since they are and were complicit in the original destruction and have been part of the liars charade! After all, what Congress giveth via legislation, it can taketh away, no?

In any event don't get complacent; I see nothing here right now that suggests the "crisis is over", but the mouth-breathers in the media are of course cheering the market's rally.

Good for them.

We'll see how long it lasts.

Check Libor, the TED spread and the IRX tomorrow when our bond market is open for trading. You should get a decent idea of what's what at that point."

from financial armageddon ...

grantham : ..."The terrible thing -- after all this pain -- is that the U.S. equity market is not even cheap. You would imagine that, given the amount of panic, that it would be. But it started from such a high level in 2000 that it still has not yet worked its way down to trend, although it is getting close. But the really bad news is that great bubbles in history always overcorrected. So although the fair value of the S&P today may be about 1025, typically bubbles overcorrect by quite a bit, possibly by 20%. That is very discouraging.

barrons : What about equities outside the U.S.?

grantham : Things are getting cheaper. We score the EAFE [the Europe, Australasia and Far East Index] as absolutely cheap, and it's offering a 7% real annual return over seven years. Emerging-market equities are a bit cheaper, and we see a 9.5% annual real return over the same period.

The problem, though, is that we have so much downside momentum, so many financial problems and so many interlocking relationships, that it is hard to imagine this crisis subsiding because stock prices are digging in their heels and approaching fair value. financial armageddon

fortune : "...Investors have been reluctant to admit that this cycle, unlike 1998's credit crisis, is imbedded in the real economy," Merrill Lynch investment strategist Rich Bernstein wrote last week. "The government can come up with any number of refinancing and liquidity plans, but households are likely to increasingly default on mortgages and other debts if cash flow is not stabilized via employment."

The employment picture is deteriorating rapidly. The United States has lost 760,000 jobs in the past nine months, according to the Bureau of Labor Statistics, while weekly initial jobless claims have hit a recent 478,000 from the low 300,000 range in early 2007.

Those are numbers that go hand-in-hand with recessions, noted Northern Trust economist Asha Bangalore. "Projections of weak economic growth," she added, "suggest that a higher level of jobless claims in the months ahead is nearly certain..."

...."But outside the booming financial sector, job growth was soft and wages were stagnant. The median U.S. family's income was actually a shade lower in 2007 than it was at the end of the high-tech boom of the 1990s, according to census bureau data.

"Since 2000, a lot of economic growth has been illusory," said Len Blum, a managing director at investment bank Westwood Capital. "Now that the asset bubbles have been popped, you start to realize we really didn't make that much progress in our economy."

Indeed, consumer outlays are now falling, as households try to work off their debts. Along with the surge in mortgage delinquencies that precipitated the financial crisis, the spending slowdown is also taking a toll on employment..."cnn

fat lady
: i've never been so insulted in all my life...

groucho : ...the night is young yet!

beulah : what abaht a sanity clause?

petey : evva boddy know...they aint no sanity clause..!

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