when citi and merrill and bear sterns have to go panhandling around the globe and whore out their common shareholders for Mafia style convert. agreements.... we are in unmapped ground.....
another thing that is a worry. management in the financial sector have absolutely no credibility whatsoever. i think this will continue to weigh on the overall market because the financial's are so important to the overall market. contrary to what the talking heads on wall street say,deep inside they know this credit mess is going to keep getting worse.
also, you have to take into context what has been moving the economy -> consumer spending this bull was based on perhaps the most desparate and stupid fed action, ever, a deliberatly created housing bubble. There have been other bubbles, but I dont think any have ever been deliberatly engineered we have also been outsourcing masses of occupations, manufacturing, and now white collar what was the consumer spending? rising home equity -> OOPS! dont got that no more, do we without continuous foreign lending, interest rates can shoot up whatever a tank of gass cost before, it's twice that now inflation is soaring bottom line is, consumer's buying power is tapping out shut off revenue, and P/E means nothing - it's like the operating figures of a well that's run dry
I'll say. That Pandit can't even appear in public, he looks so wrong for the job. The stock has fallen 5 more dollars since he started. At least Thain can go on television and get listened to - maybe even inspire you to buy.
one thing too, that i dont know the details on, is that basicly junk paper has been floated all over the place, CMOs, colateralized mortgage obligations supposedly a reasonably conservative instrument, they lo longer are when they're written on a bloated asset value held by someone with an interest only ARM so, the CMO instrument gets written down to the forclosure liquidation value balance sheet bombs, all over the place
If you read Liar's Poker by Lewis you'll see how the CMO business got started largely by the mortgage department of Salomon Brothers in the eighties. I guess the mess we're in has everything to do with the collapse of global financial institutions who bought into US CMOs.
I was looking for a sky is falling thread, but this one will do fine... For the spear catchers and runners with scissors, a few recent blurbs. http://www.telegraph.co.uk/money/ma...CBQUIV0?xml=/money/2007/12/23/cccrisis123.xml http://www.prudentbear.com/index.php/FeaturedCommentaryHome http://www.newsweek.com/id/91629 Osorico
the whole mess is a crisis as long as bankers and politicians cant find a subverted method to shove all of this onto the US taxpayer.... the RTC was floated off balance sheet and was shoveled over 20 years.... now, there are no options which pass the smell test..... ahh the internet is good for something....