God could save the queen mate. But your problem isn't so much 'economics" as it is social. You have a Trojan horse living among your population. They could easly take down your economy with one swift blow. However, most Brits are to kind and will give their benefit of the doubt, even after the Tube was attacked. Pack up and move to IBIZA bruva, at least you will go out in style!
i said this in previous posts. the us investments banks are virtually bankrupt. ususal nonsense from some threaders about being a doomer and gloomer. but this is reality and a great chance to make a killing. its a once in lifetime opportunity. any week now you will see a headline along the lines of ' fed bails out morgan stanley as they go under' or 'countrywide goes bankrupt as credit crunch tightens' traders wake up here. chances like this do not come along very often. ill await the usual repsonse of your too bearish and this is not new news but actually i think this is not being digested fully at all by the market.
INSOLVENT RISK VERY HIGH = does it mean I can buy some high profile prop traders and other working force from GS, MER, BSC, LEH, JPM, MS via cheap stocks ? What about a takeover scenario by ET members ? LBO, MBO, Mezzanine deal or whatsoever ?
Sure Merill and Goldman and Citigroup, takeover targets. YES But not this year, wait for 2008, when the cycle/debt/housing has another leg down. Then maybe be a buyer. Who in there sane mind things that this is over before Xmas. Wall street does not, just look at what the ABX index are doing at 0.80 cents to the dollar.
Yea you say this all over the place but you never back up your statements. I'll try again (copy & pasting from another thread): "How are they facing illiquidity? What effect on near-term cash flow does the marking of bond-like securities have? Thanks for explaining."
Assets where the Firm cannot use Market Prices to Determine its value. So they Value the Assets themselves at what they Think they are worth.
<i>"Yea you say this all over the place but you never back up your statements. I'll try again (copy & pasting from another thread): "How are they facing illiquidity? What effect on near-term cash flow does the marking of bond-like securities have? Thanks for explaining."</i> makloda is correct. There will be no (near term) mass collapse of all banking, because nothing of that $$ magnitude can pressure the L3 assets. Real estate is in a deep funk, but not nearly to that extent. Banks won't collapse as a whole, but they may grossly underperform for a long time. Once they are forced to account for earnings in reality versus the voodoo math that propelled the last couple legs of this bull run, expect a different earnings picture. * None of this stuff is new... it's just a new realization to many. Oblivious bulls who believed all that financials' earnings crap from 2004 onward (instead of bull market built squarely upon massive debt) are suddenly shocked to see this pointed out on balance sheets. U.S. banks have been insolvent by those same standards for years. This paper shell game has been propelling the bull since 2003, and existed far earlier than that. Just business as usual, with the proverbial hamster wheel of debt now squeaking a bearing or two.
Excellent Commentary All ........................................................................................... Banks in general.....never disclose what the assets really are... Similar to mining firms...oil firms...you never know just how much gold is in the mine....or oil is in the ground... Banks and mines ....run on a ...trust me.... basis......always have....always will... And most definitely the financials will be offering good equity pricing during tough times....will be a good time to implement a long term dollar cost averaging strategy...that will take years to fruition...Pick a good basket of names and start long term dollar averaging...when it is most certain the public...the pundits...front page news...etc...are clearly beating prices down to extremely low levels...
I tend to agree, as in the aftermath of 1990 (the last big real estate fallout) financials went to a weighting of about 8% in the SP500: Who knows, maybe over the next 1,2 or 3 years we could see a similar development.