In a leveraged world everyone can lose. If commitments are made at one price level and based on expected future returns and appreciation, and the price level declines those are real dollars lost. Paper value in a leveraged world like ours is real value because we are foolish enough to make decisions based on it.
. Talknet: ...The chart shows a stunning loss of $30 trillion stock market wealth around the world. ***** January 8, 2009 SouthAmerica: I mentioned that figure in some of my postings. But I will not be surprised if in 2009 and 2010 the stock market wealth from around the world decline in value another US$ 7 or 8 trillion dollars. .
ok, you are clearly educated and well read; but imo wrong. have you been through any major recessions? i have, and this one is a tough one; but not much worse than the last big one (read s-l crisis). i have multiple businesses that are construction related that are picking up. mind you, when the housing boom was topping, i was one who was screaming that is was out of control also. but you guys seem like to me similar to the same guys who cheerlead whatever boom or bust we are in and cannot see the "very" big macro picture. i don't have a lot of time to write; but this thing was coming, is here now, and will go away soon. you all will see. i know something about this and the power of the government stimulating combined with pent-up demand. see what i said here: http://www.elitetrader.com/vb/showthread.php?s=&postid=1258922#post1258922 i was aware then of the crash, and am certain of a turn around, despite job losses, market losses, etc. i'll save this post to show you once the recovery starts.
Wal-Mart is worth $250 Billion and $60 Trillion = $60,000 Billions. Now 60,000/250 = 240. So $60 Trillion = 240 Wal-Mart companies. This means loss of $60 Trillion has shut down 240 Wal-Mart companies in the world. Wal-Mart has 2,055,000 employees. Now 2,055,000 x 240 = 493200000 This means 493 million jobs have been lost worldwide because of $60 Trillion loss from commodities, stocks, bonds, real estate. This is DEFINATELY beyond rescue.
90% of $63 Trillion loss is owned by Giant banks and Giant investment companies, Mutual fund, Hedge funds. Where do they get their money from? The answer is "Worldwide people". Worldwide people deposit money with Banks and Banks trades "people's money" by giving loans to inefficent & worthless giant companies. Worldwide people deposit money with Hedge & Mutual funds & they collectively invest "people's money" in loss-making business such as Stocks, over-hyped real estates & commodities. People have no knowledge where their money is getting invested. ultimately worldwide people suffer loss of $63 Trillion and they are poorer by $63 Trillion. Then worldwide central banks or governments further invest $5 Trillion+ into "sinking world economy" to save worthless, inefficient giant companies and banks without any business brains. In the end, worldwide central banks also become bankrupt. What is the moral of this story?
. Talknet: By some estimates, combined losses in commodities, stocks, bonds, real estate are greater than $60 trillion. This is beyond rescue. â¦Wal-Mart is worth $250 Billion and $60 Trillion = $60,000 Billions. Now 60,000/250 = 240. So $60 Trillion = 240 Wal-Mart companies. This means loss of $60 Trillion has shut down 240 Wal-Mart companies in the world. Wal-Mart has 2,055,000 employees. Now 2,055,000 x 240 = 493200000 This means 493 million jobs have been lost worldwide because of $60 Trillion loss from commodities, stocks, bonds, real estate. This is DEFINATELY beyond rescue. ******* January 8, 2009 SouthAmerica: I am sorry to say that, but your reasoning about Wal-Mart the $60 trillion loss and the 493 million jobs lost worldwide it does not make any sense. Why? Because a big chunk of that figure is just deleveraging losses and hot air from massive speculations around the world. After the dust settles the real economy still be there and most people still have jobs. .
. January 9, 2009 SouthAmerica: Reply to Talknet Let me give you just one actual example for you to understand why your reasoning was incorrect. From May 21, 2008 to November 20, 2008 Petrobras stock declined from US$ 75 per share to US$ 15 per share and Petrobras lost during that period US$ 266 billion in market cap. Since November 20, 2008 the Petrobras stock has increased from US$ 15 per share to the current price of US$ 27 per share. Even though Petrobras lost during that period a Wal-Mart equivalent in market cap â That not means that Petrobras is going to layoff thousands of people on the contrary Petrobras is in the process of hiring thousands of new workers to help develop the new oil fields. By the way, Petrobras just found more oil in the north of Brazil. In this example alone there is ¼ of US$ 1 trillion of the loss that you have mentioned and no loss of employment here. On your figure they included trillions of dollars in paper losses related to real estate â the market value of real estate for millions of people has declined 30 or 40 percent or even more, but that not means that all this people are going to move from their houses â most of these real estate properties had increased in value many times over in the last 30 years. Here is just another example of how trillions in paper loss donât translate in millions of job losses and so onâ¦. By the way, most companies from around the world donât have 2.1 million full time employees such as Wal-Mart â for example Petrobras has only 69,000 full time employees. I hope you understand now why your reasoning on your Wal-Mart example it does not make sense. ***** Info as of January 8, 2009 Wal-Mart Stores (NYSE: WMT) Full Time Employees: 2,100,000 Closing Price: $ 51 per share Market Cap: US$ 202 Billion Source: http://finance.yahoo.com/q?s=WMT ***** Petrobras - PETROLEO BRASILEIRO - (NYSE: PBR) Full Time Employees: 69,000 Info as of January 8, 2009 Closing Price: $ 27 per share Market Cap: US$ 119 Billion Note: Current market info. ***** Info as of July 11, 2008 Current price: US$ 61 Market Cap: US$ 270 billion Note: (My article about the Renationalization of Petrobras was published on July 8, 2008) ***** Info as of November 20, 2008 Closing Price: US$ 15 per share Market Cap: US$ 66 Billion Note: November 20, 2008 date when Petrobras stock reached the low for the year 2008. ***** Info as of May 21, 2008 Closing Price: US$ 75 per share Market Cap: US$ 332 Billion Note: May 21, 2008 date when Petrobras stock reached the high for the year 2008. .
SouthAmerica, I agree with you. I have just posted an example for how much is the $60 Trillion worth to the world economy. I think only 1000 million or 1 billion people have jobs worldwide. If 500 million jobs are lost it's end of world economy.
Dr. Marc Faber report says Gold will reach $5000 per ounce. That's foolish. Because world economy is poorer by $60 Trillion. People do not have money to buy gold. In fact, now central banks and people will start selling gold to earn cash/money. Gold will crash to $500 per ounce.
I no Marc Faber, but here goes: 1) Business cycles are for real 2) Booms are always followed by busts 3) No one can predict with 100% accuracy the future levels of financial markets (Ask Abby Jo Cohen !!) 4) Best to let the free markets quickly make the necessary adjustments as government intervention will once again use scarce resources inefficiently which will prolong and/or make the crisis even worse.