Ok AIG is saved, but the economy sucks

Discussion in 'Trading' started by detective, Sep 17, 2008.

  1. We now know clearly that the Fed will bailout banks/insurance companies, anybody who will pose a threat to the so-called system.

    Now the market will focus back on what really matters, future earnings. And that looks horrid. Unemployment is going higher. Consumer can no long access the housing ATM. This is not like 9/11, when the credit/mortgage derivatives and housing bubble was in its early stages. That is over. That was the driver of growth from 2003 to 2007. What will be the driver of growth now? Emerging markets? BRICs? In a world bumping up on its limits of commodities, do you really think that China can grow 10% forever? China will just end up being a competitor to "emerged" markets for access to commodities, not a driver of its growth.

    There could be a sucker's rally based on the relief that the center has held and there has been no financial armageddon. But the market wasn't pricing in much of a risk to any of these catastrophes anyway. Equities have been relatively sanguine in the face of all the bad news the last couple of days. We are down 3% from the Friday close when most optimistically expected the Fed to bailout LEH and possibly AIG. This is hardly a blip. There will be more pain ahead as the market refocuses on the global recession.
  2. The mother of them all is coming...

    CitiGroup.. and im afraid Citi group isn't going to be saved by the fed.

    Im not sure how that will play out.. but I can almost guarantee you that the fed is done with the bailouts.
  3. How do you know that the Fed won't bailout Citigroup if its in trouble? Obviously the Fed has reinforced the mantra, too big to fail. And Citigroup is pretty darn big, makes LEH and Bear combined look like a pip squeak. It will be bailed out if it needs it, whether the public likes it or not. I don't agree with the Fed's actions, because systemic risk is so overblown in the media, but the Fed is always going to be bailing out banks, that's what they do now.
  4. corporate welfare at is finest eh...GO NEOCONS! we are all 70k in debt to the gov't
    Obama /Biden 08-for the sake of us all-our children especialy
  5. Citigroup is too fucking big to fail. Anything with 500 billion or less in assets however....
  6. LEH had $640B of assets. Citicorp has $2.2T, so I agree that it cannot be allowed to fail.
  7. Citigroup will be forced to break up into smaller companies.

    And portions will unwind.