Black Monday

Discussion in 'Chit Chat' started by bond tr4der, Nov 22, 2008.

  1. 3 bank failures after the close Friday, one of them major; A massive rally at the close based on baloney; Reports that GM is considering bankruptcy; and no resolution to Shittygroup's Lehman-esque death spiral.

    I have no doubt we hit limit down when futures trading resumes Sunday. The PPT business model is falling apart due to its constant abuse. When the PPT steps in and starts buying ES, we're just going to have institutions shorting the contract AND shorting stocks instead of arbing.
  2. There imo will be numerous "wash-n-rinse" moves creating an eventual intermediate term bottom....may take 3 months, may take two years, but it will be comprised of a large number of mind boggling moves in both directions!

    Stay sharp and stay vigilant.....these wild moves will be used over and over again to shake out weak holding bottom pickers! :cool:
  3. like myself :D
  4. You do realize that financials are down 42% since the election -- even with Friday's rally? Thats a 42% drop in only 13 trading sessions.

    The XLF index is down 73% of June 07 highs. 73%??? Thats some markdown.

    We know the government won't let the banking sector fail. Therefore at some point, uncertainty will be priced in and turn into opportunity.
  5. Adobian


    Doom and Gloom all over. It's time to buy :)
  6. Just because some doom and gloom is already priced in doesn't mean there isn't more to come.

    I love this beginner logic, "it's gone down 73% already, can't go down much further!"
  7. A 73% drop would take a 230% rebound to get back to where it came from.

    A 80% drop would take a 400% rebound.

    A 85% drop would take a 567% rebound.

    A 90% drop would take a 900% rebound.

    A 95% drop would take a 1.900% rebound.

    I think it is going to take many years before the financial sector recovers from this one.
  8. hehe me too!

    Think about it...You got two guy puts all his money in a stock when its at 100. Stock drops 73% and the price is 27 per share now. New guy says "Hey! its down 73%! Cant go much lower" so he puts all HIS money into that stock at the 27 dollar per share price and then the share price goes down to 1 dollar lets say.

    The guy that bought at 100, lost 99% of his money
    The guy that bought at 27, lost 96.3% of his money

    If both guys started with 100k there is only a 2700 difference between their accounts now.

    This is actually kind of funny, because I remember someone on this board that said something like "FNM cant go down any further...its already in the 20s!" Or those guys on the peter schiff video last year that said GS was a buy at 175 and it was a bargin! Look at GS now 54 dollars per share and its STILL trading at a premium i say! GS, based on last quarters results, is a FAIR price right at 51. Thats not looking forward, that is the FAIR value RIGHT now, with its earnings where it is, yet its still above 51. If you are looking forward, I would say the price should be much lower. They aint comming back next quarter. Their earnings are going in the toilet and no telling how bad its going to be next quarter. I know what you are saying...they have 40 billion in assets and their market cap right now is 20billion. If they double your money! WRONG! If their short & long term assets dropped in value just 5%...just 5%, thats assets left. If it drops 2.5%? Then they are at exactly where their stock price is. You think if they tried to liquidated all their assets right now, the would get 100 cents on the dollar? They would get less than 80 cents on the dollar. GS is going down bad. i've rambled on too much. I always seem to do that...start on a topic and then 5 minutes later, im talking about something else...
  9. What was the 'major' bank? You don't mean DSL with a market cap of $5m I hope?
  10. That's what I was told at DOW 14000.
    #10     Nov 22, 2008