devastation? it's OPPORTUNITY. people who overleveraged themselves will suffer for others, its opportunities. opportunities to get real estate CHEAP (just wait) etc. trading is all about buying others panic and selling their euphoria everybody hated gold in 1998 and loved stocks. guess what? pretty good time to go long in gold. everybody will start to HATE real estate pretty soon. i can't WAIT. as long as people take dumb risks, and misprice assets (in either direction) due to greed, fear, etc. there will be opp's for traders. gloom and doom serves nobody. these are OPPORTUNITIES for traders (and investors)
I remember seeing similar posts in 2000 after the decline began. It is exremely difficult to time such things on way down. It could look like a great buy 1 year from now, but you can loose a lot before you prediction turns right, but then it is too late. gloom and doom is fine if one really knows what he is talking about and can act upon it. Nobody really knows how many skeleons (leverage) there are in closets. Time will tell.
I guess nothing is a big deal until you lose everything. Yes the market will come back, but you have to learn to preserve capital so you can take advantage of opportunities as they arise.
"I remember seeing similar posts in 2000 after the decline began. It is exremely difficult to time such things on way down. It could look like a great buy 1 year from now, but you can loose a lot before you prediction turns right, but then it is too late" oh rubbish. if you can't capitalize from market extremes, you aren't much of a trader. hmmm. fwiw, *i* didn't even know what trading was, but i knew mispriced assets in 1998. that's why i bought a gold fund. it almost quadrupled in the same time all the nimrods were watching the stocks that they bought at the peak of the bubble dissipate, waiting for the bounce (pull up a chart of VERT from 1999 to now if u want a laff). markets HAVE to misprice assets. because they are made up of people. people are emotional. buffet knows this, and every trader should know it too. i sold one of my houses in seattle area last month. it's been going up CONSISTENTLY (10% last year in king county), but it's clearly MISPRICED. i'll be selling another in the next 6 months. sell overpriced assets. invest in underpriced assets. lemmings don't make money. there is always tons of attractive stuff (from an investment angle) and there are always great trades. as a index futures trader, this is the best trading environment i have ever seen. today was the perfect example. you could have sold today's gap up with SMALL risk (nice small defined 20 pt stop) and profited from an over 150 pt run down in the dow futes. you can't DREAM a market like this. i get tired of all the gloom and doom. we are TRADERS. traders find opportunity in other's pain, devastation, hope, greed, fear, etc. that's what we do! and we provide a valuable service too! part of the capital markets - the greatest wealth creation tool ever invented
First of all, using the phrase subprime is old newspaper. And it's really irrelevant now because we need to know - the markets need to know - whether we have a crisis in broad mortgage financing and what the extent of it is. The extent of the damage from existing MBS impairment is unknown until the collateral is liquidated according to state law and then any swaps or other offsets applied. Plus they have a term of years anyway. So this will go on for months and months. That's the law - and these are contracts - everything else is just market jive, angling, mathematical models and speculation. The HUGE question nobody is asking and which will kill us dead is whether and to what extent new financing through securitization is in trouble. Put simply, have any new MBS been created and sold successfully in the last few weeks? If securitization as we have come to depend on it is over, then we have to go to a new, or old, way of finance and there's going to be brutal problems. The answer to this question is very easy for Wall Streeters or City bankers/lawyers to find out and I sent it in to Cramer even though I don't watch.
You are so way off from reality that it's pretty much a waste of time to even reply. Subprime assets at $20 trillion? Get real.
For what it's worth . . . the two funds at Bear that got closed down were running off of 10 and 30 times respectively. Is there any INTELLIGENT LIFE on ET anymore these days???