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Old 03-18-2008, 04:12 PM   #61
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Like crack-cocaine, these cuts will provide a short -lived euphoria, but with an awful, long term price.

Only a couple hundred more basis points and BB has exhausted his potency.

The markets will want more and more of a finite fix.

He can't make it better, but he can, and is, making it worse. Even some of the other Fed officers are admitting their guilt.
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Old 03-18-2008, 04:13 PM   #62
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Like crack-cocaine, these cuts will provide a short -lived euphoria, but with an awful, long term price.

Only a couple hundred more basis points and BB has exhausted his potency.

The markets will want more and more of a finite fix.

He can't make it better, but he can, and is, making it worse. Even some of the other Fed officers are admitting their guilt.
You are right. The end is near.
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Old 03-18-2008, 04:16 PM   #63
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Like crack-cocaine, these cuts will provide a short -lived euphoria, but with an awful, long term price.

Only a couple hundred more basis points and BB has exhausted his potency.

The markets will want more and more of a finite fix.

He can't make it better, but he can, and is, making it worse. Even some of the other Fed officers are admitting their guilt.
They had an ex-Fed Governor on Bloomberg who said that Bernanke has a whole "toolbox full of tools" he can use in addition to the rate cuts.
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Old 03-18-2008, 05:55 PM   #64
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Are you ever wrong?

yes, but what is life without risk?

if i'm wrong my returns will be as bad as the indexes. if i'm right then i do better since your return is 2x as high on the way up

SP500 is down 15% or so. if it goes back to the peak than i make 30% instead of getting back to the starting point
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Old 03-18-2008, 06:54 PM   #65
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yes, but what is life without risk?

if i'm wrong my returns will be as bad as the indexes. if i'm right then i do better since your return is 2x as high on the way up

SP500 is down 15% or so. if it goes back to the peak than i make 30% instead of getting back to the starting point
So you never do worse than the indexes with your system of doing things? Seems like a good plan.
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Old 03-18-2008, 08:56 PM   #66
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yes, but what is life without risk?

if i'm wrong my returns will be as bad as the indexes. if i'm right then i do better since your return is 2x as high on the way up

SP500 is down 15% or so. if it goes back to the peak than i make 30% instead of getting back to the starting point
OK, I'll bite, what is your strategy?
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Old 03-18-2008, 09:21 PM   #67
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yes, but what is life without risk?

if i'm wrong my returns will be as bad as the indexes. if i'm right then i do better since your return is 2x as high on the way up

SP500 is down 15% or so. if it goes back to the peak than i make 30% instead of getting back to the starting point
That doesn;t sound like index investing to me.........
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Old 03-19-2008, 04:24 AM   #68
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Hang tough. I am sticking with my plan.

I am buying equity... DCA using my 401k.
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Old 03-19-2008, 07:39 AM   #69
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OK, I'll bite, what is your strategy?

pull up a historical chart of the sp500 from 2000 - 2002. i like to use StockCharts.com - Simply the Web's Best Stock Charts for this. September 2000 was the high at 1530 and draw an imaginary line through the peaks of each rally. 1315 in march 2001 and around 1175 in march of 2002 and they all end around the 200 day line

next thing you notice that each major leg down had it's own smaller rallies where the peaks stop short of the above imaginary line at around the 5 day moving average line

now pull up an sp500 chart for the last year

the peak is 1576 in october and a lower high of 1523 in december. i think we are due for a rally up to the 200 day line as we did in 2000 - 2001. back then it took around a month and since i have a 30 day trading restriction in my 401k, i think it's a risk that is worth taking. at that point i'll have to look at things


if you want to get into similarities the average prices then had been trending up as well for a few weeks just as they have now even though the market fell. and the rally started during options expiration as well where the Fed decided to make a lot of people a lot poorer.
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Old 03-19-2008, 01:47 PM   #70
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Today's financial world bears about as much relevance to that of 1907 as... oops, another analogy.
Yes and no. The investment world exhibits cycles, with repeated bubbles (South Sea, Tulip, dot com, etc), financial panics (1819, 1907, Asian crisis, etc), and cyclical bulls and bears. So it's fair to ask if we're in the midst of another financial panic.

But I don't think anyone is wise enough to know if we're in a particular phase until it's over. If they were, the cycles wouldn't repeat, because investors would not fall into the same traps (would they?). And, as brewer pointed out, this time it is different because, unlike 1907, we have the FED. The panic might still happen, but it should not have the same consequences of 50% down markets, or the depression that followed the 1920s bust. Oh, wait, the FED was there during the depression, wasn't it?
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Old 03-19-2008, 01:49 PM   #71
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Oh, wait, the FED was there during the depression, wasn't it?
Sort of. The fed was there but the institution has undergone radical changes since then and much research has been done on what central bankers should do to respond to different things. We have a much more empowered and hopefully wiser Fed now than was existence in its infancy back then.
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Old 03-19-2008, 02:18 PM   #72
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Investors Say "There Must Be A Pony In Here"

Visa IPO huge success-

Visa Shares Soar More Than 30 Percent: Financial News - Yahoo! Finance


"The formula helped produce the United States' most lucrative IPO. Visa sold 406 million shares at $44 apiece late Tuesday to raise nearly $18 billion. Driven by strong demand, the IPO price topped the range of $37 to $42 per share that Visa set three weeks ago, and complete the most lucrative initial public offering in U.S. history.

Investment bankers could still exercise an option to buy another 40.6 million Visa shares during the next 30 days. If that happens, Visa's IPO will end up raising $19.7 billion before expenses.

"This shows that all the recent financial turmoil obviously hasn't bothered a lot of people," said Nicholas Einhorn, an IPO analyst for Renaissance Capital of Greenwich, Conn.

"Visa conceivably could benefit from tougher times if more cash-strapped consumers rely on their credit cards to make ends meet", said Aite Group analyst Gwenn Bezard. "And even if people can't pay back the debt, Visa still makes money. It's a very attractive company.""

Whatever might be going on, this is not capitulation.
Ha
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Old 03-19-2008, 02:31 PM   #73
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Yes and no. The investment world exhibits cycles, with repeated bubbles (South Sea, Tulip, dot com, etc), financial panics (1819, 1907, Asian crisis, etc), and cyclical bulls and bears. So it's fair to ask if we're in the midst of another financial panic.

But I don't think anyone is wise enough to know if we're in a particular phase until it's over. If they were, the cycles wouldn't repeat, because investors would not fall into the same traps (would they?). And, as brewer pointed out, this time it is different because, unlike 1907, we have the FED. The panic might still happen, but it should not have the same consequences of 50% down markets, or the depression that followed the 1920s bust. Oh, wait, the FED was there during the depression, wasn't it?

i read somewhere that the fed dropped rates after 1929 until bank of england started raising rates for some reason and this caused the fed to raise rates as well. and the depression didn't start until the runs on the banks put them out of business and wiped out people's life savings
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Old 03-19-2008, 04:09 PM   #74
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Whatever might be going on, this is not capitulation.
Now that they're subject to reporting requirements, in a few months it'll be interesting to see how they spin those rising credit-card delinquencies...

I wonder if I could buy Visa stock with a Visa credit card, and would there be a margin call?
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Old 03-20-2008, 08:38 AM   #75
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Sort of. The fed was there but the institution has undergone radical changes since then and much research has been done on what central bankers should do to respond to different things. We have a much more empowered and hopefully wiser Fed now than was existence in its infancy back then.
Of course during the Depression, US was still on a gold and silver system, and there weren't quite so many derivative products in existence. Not to mention some extra special fancy accounting being used today.
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Old 03-20-2008, 10:10 AM   #76
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It was fun to read the minute-by-minute comments for 3/18/08. Here's a graphic summary.

MarketQuotes.jpg

(I know, too much time on my hands).
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Old 03-20-2008, 11:50 AM   #77
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Now that they're subject to reporting requirements, in a few months it'll be interesting to see how they spin those rising credit-card delinquencies...

I wonder if I could buy Visa stock with a Visa credit card, and would there be a margin call?
They interviewed the CEO of Visa the other day. His spin on it was those people who are delinquent we already out of the system... Even someone of my small intelligence was going huh well what about..
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Old 03-20-2008, 11:56 AM   #78
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A lot is being made of the fact that Visa is a processor, not a lender. True enough, but if we have a severe recession, there will likely be less to process.

I have read that a recession might acutally help Visa and MC, because people will use CCs for necessary borrowing to get by.

Maybe...but

:confused: How long are the lenders going to enable that :confused:

Ha
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Old 03-20-2008, 01:15 PM   #79
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JP Morgan is not only underwrote the IPO but was the largest shareholder in Visa.. likely it's they (and the other bank owners) who need the cash infusion.

found this which also brings up shielding the banks from Visa's outstanding anti-trust issues:

Visa: Bailing Out The Banks - Floyd Norris - Business - New York Times Blog
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Old 03-20-2008, 01:25 PM   #80
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JP Morgan is not only underwrote the IPO but was the largest shareholder in Visa.. likely it's they (and the other bank owners) who need the cash infusion.

found this which also brings up shielding the banks from Visa's outstanding anti-trust issues:

Visa: Bailing Out The Banks - Floyd Norris - Business - New York Times Blog

see my above post why i think we are going to rally which wall street will sell into slowly

bear markets the pro's sell to the suckers while CNBC goes on with the hype and by the end of the bear market the suckers sell off where the pro's buy into because they know things are about to turn around
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