the problem of wall street banks ...

Discussion in 'Wall St. News' started by man, Apr 4, 2008.

  1. man


    ... is that there is literally no bid out there. assume there
    are only a dozen people in the world who would buy a
    ferrari gto of 1965, you have one and all of a sudden
    the other eleven buyers are busy with something else
    and do not bid for the car, is it worth 0 then?

    from a market perspective definitely YES. but there is
    more to it if those other eleven buyers would love to
    buy at a certain price, but are not allowed to. this is
    what is currently happening. nasty stuff was written off
    and that was quite right. but in the course of that it
    happens with too much stuff that everybody knows
    is not as bad as it is priced (if it is priced at all ...). that
    is why this crisis is a liquidity crisis.

    i think it is about time to think of going long the banking
    sector. if we have eight weeks with no news like bear the
    crisis could well be over. since liquidity will return all
    of a sudden and books will clean up immediately.
  2. soros_208


    how about the cds, car loans and card loans?:confused:
  3. man


    the whole credit business sees very few bids. all the
    potential bidders have the same problem. with many
    instruments not really related to the initial crisis ...
  4. Dude,

    It's all fiction. And it spans way beyond the financial sector.
  5. man


    agreed. the liquidity crisis spreads all over. yet it is at
    least partly going too far ...