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October 8, 2008
Game Over..
Fed, ECB, Central Banks Cut Rates in Coordinated
http://www.bloomberg.com/apps/news?pid=20601087&sid=azOWH.Rai3iY&refer=home
Oct. 8 (Bloomberg) -- The Federal Reserve, European Central Bank and four other central banks lowered interest rates in an unprecedented coordinated effort to ease the economic effects of the worst financial crisis since the Great Depression.
Ever notice that the statement "since the Great Depression." is in vogue now?
We are in code red!
Comments
The what, meet "Mr. Doom"; "Mr. Doom", meet the what.
War's over. We won.
Posted by: justinm at October 8, 2008 10:47 AM
I will stick this diddy in here since everybody is ignoring todays evernts.
Iceland is in a state of emergency! Their currency has plunge over 70%. Iceland is trying to borrow from US and UK and maybe Russia.
Iceland Drops Currency Defense; Abandons Glitnir Purchase
http://www.bloomberg.com/apps/news?pid=20601085&sid=ahAQVJ69AmOc&refer=europe
Oct. 8 (Bloomberg) -- Iceland scrapped attempts to strengthen the currency and abandoned plans to nationalize the country's third largest bank as the crisis in its banking industry deepened.
Iceland's Krona Quoted Almost 50 Percent Below Peg (Correct)
http://www.bloomberg.com/apps/news?pid=20601085&sid=abjzC1zbw8VI&refer=europe
``It's looking very gloomy for Iceland at the moment,'' said Bjarke Roed-Frederiksen, an economist in Copenhagen at Nordea. ``The currency isn't trading at the price the central bank has set and we're already seeing signs that people don't want to accept krona in transactions on Iceland.''
Terror as Iceland faces economic collapse
"Queues formed at petrol stations as Icelanders rushed to fill up before reported fuel shortages, while savers who tried to withdraw money from banks or sell bank shares on the internet found websites were not working."
Yep keep taking things for a joke. Keep laughing just party like it's 1999 because you are going to wish it was..
The What (Oh well...)
Someday this war is gonna end...
Posted by: what at October 8, 2008 11:40 AM
That'll be too bad for Long John Silver's. That's where all their shitty cod comes from.
Posted by: daveinbedstuy at October 8, 2008 11:42 AM
"War's over. We won."
The was is not over, it just started.
I was reading Nouriel Roubini blog 2 years ago. People then thought I was nuts...
The What
Someday this war is gonna end...
Posted by: what at October 8, 2008 11:42 AM
Hey What,
I read about Iceland yesterday in the times. In all seriously could you explain what happened to their banks. I know they had little exposure to bad mortgages. Are they a victim of the credit swap? Or is something else going on here.
Posted by: 7andfive at October 8, 2008 11:50 AM
"I read about Iceland yesterday in the times. In all seriously could you explain what happened to their banks. I know they had little exposure to bad mortgages. Are they a victim of the credit swap? Or is something else going on here"
For what I understand is their currency peg got smashed in the FX market. The traders just said fuck the Krona and it went into free fall. Plus their Banks are so over leveraged the Government doesn't know the extent of the damage. They have to borrow money just for imports (OH Shit) because no want the currency.
This same thing could happen here. I was watching CNBC Europe, the reporter from Iceland look very worried. I joke around but I don't think this is funny. They could be bankrupt..
The What (Keep fucking around)
Someday this war is gonna end...
Posted by: what at October 8, 2008 12:10 PM
Oh 7andfive I forgot they was also using the Krona as a carry trade that has blowed up in their faces..
The What
Someday this war is gonna end..
Posted by: what at October 8, 2008 12:12 PM
It wasn't Iceland that was using the currency in the carry trade it was outsiders. But at least you got a few of the words right!!
Posted by: daveinbedstuy at October 8, 2008 12:15 PM
Well I (almost) could not care less about the dollar. I'm still holding Euros from when I lived in Amsterdam. Traders have been shorting the Euro- which explains the lackluster price at the moment.
I still don't quite understand the Iceland situation. Also, how could a bank like HSBC get out of this mess- when they were heavy not only in subprime mortgages but subprime credit cards as well. Something isn't right here- unless China is quietly absorbing the losses at HSBC.
Posted by: 7andfive at October 8, 2008 12:15 PM
7andfive...China is not the parent of HSBC. It is essentially a UK bank with a listing here and in Hong Kong as well. It has branches and a banking business in China but its a small part.
As B of A did yesterday, HSBC will have to raise capital. Will they cut the dividend? Who knows. They are not yet "out of this mess." B of A and HSBC are the two safest banks in the world. At $22 here, BAC is tielding 5.8% on the reduced dividend. Not bad!!!
Posted by: daveinbedstuy at October 8, 2008 12:20 PM
I can't help but comment What that your chart above ends with an upswing. Doesn't look all doom and gloom to me.
Posted by: wasder at October 8, 2008 12:23 PM
"Well I (almost) could not care less about the dollar"
Bad mistake! Get back in dollars ASAP! The US Dollar is backed up by weapons of mass destruction! Dump the Euros, Germany and England are refusing to take them and the could be on par with the dollar by December!
"I still don't quite understand the Iceland situation. Also, how could a bank like HSBC get out of this mess- when they were heavy not only in subprime mortgages but subprime credit cards as well. "
7andfive I think you are a smart person! I just had a conversation with at friend of mind and he ask me the same thing. I bank with HSBC and remembered about 14 months ago when the "subprime mess" just got started. HSBC took a 11 Billion dollar write down and said "We fucked up and we are taking steps to correct it", then they took additional 46 Billion dollar write down and said "We will survive this thing and never make bad loans again". This all happen early in 2007. HSBC is one of the best banks in the world with billions of dollars in assets but they too can get hit again.
Have you notice with all the money injections the whole financial universe is going to hell? Because it's not a money thing, it's a trust thing and people are worried that they wont get their money back, unreal....
The What
Someday this war is gonna end....
Posted by: what at October 8, 2008 12:32 PM
"It wasn't Iceland that was using the currency in the carry trade it was outsiders. But at least you got a few of the words right!!"
Hiya Dave, I'm still waiting your comment on Hedge Fund redemptions.
The What
Someday this war is gonna end..
BTW It's so funny all of you was laughing last year....
Posted by: what at October 8, 2008 12:34 PM
Hey Dave,
I wasn't implying that HSBC is solely Chinese. Just that the UK government hands are tied to help with anything- already bailing out banks. And that maybe the HK operations are being helped quietly by the Chinese government. I found it weird that we have heard nothing from them during this mess- except an announcement of a few layoffs. Just a few months ago they were taking 51mil a day in writes off due to their subprime exposure.
Posted by: 7andfive at October 8, 2008 12:37 PM
Hey Dave,
I wasn't implying that HSBC is solely Chinese. Just that the UK government hands are tied to help with anything- already bailing out banks. And that maybe the HK operations are being helped quietly by the Chinese government. I found it weird that we have heard nothing from them during this mess- except an announcement of a few layoffs. Just a few months ago they were taking 51mil a day in writes off due to their subprime exposure.
Posted by: 7andfive at October 8, 2008 12:38 PM
Everybody is seeing redemptions. Hundreds of hedge funds will close over the next few weeks. It'll be a healthy shakeout. It'll be good for those of us left standing.
Even the Magellan Fund is DOWN 43% Y-T-D!!!!
Posted by: daveinbedstuy at October 8, 2008 12:42 PM
BTW It's so funny all of you was laughing last year....
I for one am still laughing. Not at you per se but at the divine comedy that is life.
Posted by: wasder at October 8, 2008 12:44 PM
wasder, you're going to have to check that high brow talk at the door when you enter Union hall. :-)
Posted by: daveinbedstuy at October 8, 2008 12:47 PM
The What, how terribly rude of me to not have dropped by your little discussion after you graced me with your insightful comments. As such:
We are having our first annual End of the World (Or Maybe Not) Party next Thursday, October 16, 2008 at Union Hall in Park Slope. Please remember your ID; as we've learned here, Union Hall has a strictly enforced carding policy. The fun will begin at 6:30pm. All are welcome, including occasional visitors to the site with less time on their hands than some of us Brownstoner-addicted bold type regulars. Many of the most adored (and not so adored) posters have confirmed their attendance. We hope to see you there.
Posted by: Biff Champion at October 8, 2008 1:02 PM
All right Dave. No hi-falutin talk from me. Will use one or two syllable words all night.
Posted by: wasder at October 8, 2008 1:11 PM
8000 dow and 800 sp are the lowest support levels. If we go thru them than I will go to that party cuz It will be the end of the world. Unless you hold cash of course. The WHAT you have been reading RGE Monitor so have I, but I also have been reading The Gloom and Doom Report and he has been out of this world on point on all issues. http://www.gloomboomdoom.com/gbdreport/download/GBD0306.pdf
Everyone do yourselves a favor and read it...
Posted by: HOBOKENROCKS at October 8, 2008 1:15 PM
Marc Faber is a good friend of mine. He started out with Drexel Burnham in the 80s. I got to know him and his wife while I was living in Hong Kong in the early 90s. His wife is Thai and had a Thai restaurant that was quite good...Supatra's. Mark now spends most of his time in Chiang Mai. He's had an excellent track record. he's never totally all about Gloom and Doom and always has great BUY ideas in his back pocket.
Posted by: daveinbedstuy at October 8, 2008 1:26 PM
I hope you followed his advice, he and Jimmy Rogers have been pretty much been flawless on their long term views. Marc wrote about exactly what is happening now 5 years ago. Thank goodness I followed him and his ideas.
Posted by: HOBOKENROCKS at October 8, 2008 1:30 PM
Jimmy and my ex-boss were very close friends. he has a huge collection of erotica art; painings, prints & sculpture.
Posted by: daveinbedstuy at October 8, 2008 1:36 PM
I will be going long either today or tomorrow , only options as I do not want to get creamed... I feel friday thru monday may be the last hurrah for the shorts.
Posted by: HOBOKENROCKS at October 8, 2008 1:38 PM
I will be going long either today or tomorrow , only options as I do not want to get creamed... I feel friday thru monday may be the last hurrah for the shorts.
Posted by: HOBOKENROCKS at October 8, 2008 1:38 PM
Dave, are you still in the business?
Posted by: HOBOKENROCKS at October 8, 2008 1:39 PM
We are down about 3% Y-T-D. Still standing.
Posted by: daveinbedstuy at October 8, 2008 1:44 PM
what about redemptions are you getting alot of those? If you don't mind what is the name of your fund. You don't need to answer that if you don't want. A friend of mine works at libertyview capital management and they from I last heard are screwed. They had lehman as their prime brokerage and their money is in limbo.
Posted by: HOBOKENROCKS at October 8, 2008 1:47 PM
We have no problems with our prime broker. Some redemptions which are collateral damage as the clients have lost their shirt elsewhere and need to pull money from us despite how well we are doing. Can't name the firm though. Most firms that used Lehman as prime broker are screwed. Their money is inaccessible nor can they trade.
Posted by: daveinbedstuy at October 8, 2008 1:54 PM
What are you looking to do at this point? My belief is that the market will turn by the 10th of October. At leat that is what my charts are telling me...
Posted by: HOBOKENROCKS at October 8, 2008 1:59 PM
What are you looking to do at this point? My belief is that the market will turn by the 10th of October. At leat that is what my charts are telling me...
Posted by: HOBOKENROCKS at October 8, 2008 1:59 PM
"We will survive this thing and never make bad loans again". This all happen early in 2007. HSBC is one of the best banks in the world with billions of dollars in assets but they too can get hit again."
So this is to the peanut gallery but especially dave and the what. Do you think that if everyone would have come clean last year we would be out of this mess. And if everyone just came clean now things would get better. The market is already diving why not have it dive for good reason and then move on?
There are still some banks that are on shaky ground that are not coming clean! I'm looking at you Citibank. No way they should be allowed to get their hands on Wachovia.
Posted by: 7andfive at October 8, 2008 2:02 PM
The market is trying to turn now. The Fed is also doing funny things to the 2, 5 and 10 Year Treasuries today. About time to go long the Aussie dollar too.
On another global item of interest, I think we all should believe the Bakrie brothers and pile into the Indonesian market when they reopen it in God knows how many days. NOT
Posted by: daveinbedstuy at October 8, 2008 2:08 PM
If I am diving in I will be diving into CHina. This is probably the best oppurtunity to get into the next great country. But I want one really big crash over there to go in. Start looking at countries with better positions than us. The USA has a huge deficit and is thinking about cutting taxes again.
Posted by: HOBOKENROCKS at October 8, 2008 2:15 PM
If I am diving in I will be diving into CHina. This is probably the best oppurtunity to get into the next great country. But I want one really big crash over there to go in. Start looking at countries with better positions than us. The USA has a huge deficit and is thinking about cutting taxes again.
Posted by: HOBOKENROCKS at October 8, 2008 2:16 PM
JRJC, CSR, GU, CHL, and especially FXI and short FXP and EEV
Posted by: daveinbedstuy at October 8, 2008 2:17 PM
I so glad that don't pay you dumb fucks to invest my money!
"There are still some banks that are on shaky ground that are not coming clean! I'm looking at you Citibank. No way they should be allowed to get their hands on Wachovia."
The Banks are hiding anywhere between 1 -4 Trillion dollars of garbage! This is why we have the Vapor-Lock in the credit markets! It''s about trust like hedge funds lying about their returns. I think the Pitchfork crowd will be looking here next.
If you are long anything in this market, you are going to have a 10ft I-Beam shoved up your ass! You cannot stop DEFLATION! All Mutant Asset bubbles end with a fucking crash, ALL OF THEM!!!!!!!!!!!!!!!!!!!!!!
The What
Someday this war is gonna end...
Posted by: what at October 8, 2008 2:40 PM
Agian, the inevitable reference to anal insertion. You kill your own thread What.
Posted by: daveinbedstuy at October 8, 2008 2:47 PM
Hedge funds don't have to show what they have on their books. So if we ever pass a law to make those guys show if they are solvent or not we will have the dow at 3000.
Posted by: HOBOKENROCKS at October 8, 2008 3:03 PM
Dave do you truly believe in the earnings of these Chinese companies? I really have a hard time believing anything those companies put out.
Posted by: HOBOKENROCKS at October 8, 2008 3:10 PM
There's a big difference in accounting standards when they are listed on the NYSE vs. Shanghai or Shenzhen. I didn't include the names of a few where the results, shall we say, have diassappointed. All of those companies are on the up-and-up accounting-wise, CHL is in fact, a world class telco.
Posted by: daveinbedstuy at October 8, 2008 3:16 PM
Re the OP, also, has anyone noticed there have been at least two suicides? That also recalls tales of the Great Depression. At the same time, NYT reports that housing contracts are up somewhat. That does not surprise me. (I think it's a great time to buy, if you can.) Nor do I think it is a particularly hopeful sign, as far as the broad damage in the economy is concerned. I am with -- now I forget his name -- another poster who worries about a Soviet-style collapse. I don't worry about oil but rather foreign countries losing confidence in our ability to pay back our loans. Then they'll stop lending and the U.S. will be bankrupt. If that happens, it's possible we could relive the 1970s in New York City.
Posted by: mopar at October 8, 2008 4:38 PM
I expected it would be a good time to buy now and put in a few low bids on houses that have been for sale for 6 mos + in a neighborhood that I like. Only one was in "move in" condition. Nonetheless, no one really expressed any interest in my offers.
A couple countered w/ minor reductions to their ask. thats it.
Posted by: slick at October 8, 2008 6:33 PM
Iceland made the mistake of opening up their banking system so aggressively that their banking liabilities are worth many times their national GDP. That's why they're failing. The war is over what -- we won. Go hang out with "Mr. Doom" until the next crisis, when you're all of the sudden right. If you're negative 100% of the time, you're right 50% of the time.
Posted by: justinm at October 9, 2008 3:02 PM
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