Global Stock and Credit Crash Alert

[ashtondav]

I presume these d1ckheads alerted us to the massive exposure of RBS to worthless mortgage securities? NO.

I presume these d1ckheads forecast the 50% crash in banking shares (including their RBS)? NO.

I presume these d1ckheads waited until they'd issued the largest ever UK rights issue, and given an upbeat assessment of their business prospects? YES.

I'd rather believe Lucifer himself. As someone said the other day; only a banker could find new and exciting ways to lose money when the old ways worked just fine...

 

[d]

if RBS is so wise as to know when to sell, why didn't they suggest we sell at the market highs last fall?

 

[2B]

I own only one individual stock -- Bank of America. It's in my taxable account and I've been too cheap to pay the tax on my gain. My cost basis is around $9/share. My following comment is based on what I've seen happening over the last month.

BAC now has a dividend rate over 9%. After repeated "downgrades" by analysts, the CEO said that he didn't see the need to cut the dividend unless the economy becomes much worse than they had forecasted. He also said that the forecast includes continuing real estate stress and more writedowns of assets. Did his comments change anything? No except for a few days.

What I am amazed at is the analysts have taken up their chant again. Everytime another one (UBS, Lehmann, Merrill, etc...) makes their grand prediction the stock tanks. Even if BAC does cut their dividend, it should only happen once. Even if they cut it in half, the 4.5% dividend is higher than the S&P average by a long shot. This cut shouldn't be too likely anyway since BAC continues to say "upbeat" things.

Are they lying SOBs? That's possible but there doesn't seem to be any reason to deny a financial stress point since it seems to be so popular.

 

[al_bundy]

what's the stock market going to crash into?

 

[2B]

Putting things in perspective --

This has so far been a relatively modest correction by longtern standards. I don't think it has officially fallen 20% from the October high to qualify as a "bear" market but I might be wrong. Back in the good ol' days of 1987, it did that in one day.

I don't think it's fallen as far as the 2000 - 2003 period. Most of us remember that.

I guess it feels good to give ourselves a good whine now and then but we'd better toughen up if this is driving any of us "buy and holders" to consider selling out.

And in conclusion, despite all of the rhetoric to the contrary, we still aren't in an official recession. Except for all the screaming and wimpy stock market, we still have a historically low unemployment and not too high of an inflation rate especially for those of us that lived through the 70s.

 

[Nanita8140]

Putting things in perspective --

This has so far been a relatively modest correction by longtern standards. I don't think it has officially fallen 20% from the October high to qualify as a "bear" market but I might be wrong. Back in the good ol' days of 1987, it did that in one day.

I don't think it's fallen as far as the 2000 - 2003 period. Most of us remember that.

I guess it feels good to give ourselves a good whine now and then but we'd better toughen up if this is driving any of us "buy and holders" to consider selling out.

And in conclusion, despite all of the rhetoric to the contrary, we still aren't in an official recession. Except for all the screaming and wimpy stock market, we still have a historically low unemployment and not too high of an inflation rate especially for those of us that lived through the 70s.

You are right in saying this in "NOTHING"! I have not touched a cent from my portfolio and don't intend to do so....I'm actually waiting with some extra cash to jump in when it goes down even more. As for inflation, for me this is nothinggggggggggg....I was born in Argentina and in the late 1980's we had HYPERINFLATION...now that is a ride!!....I lived through 5000% inflation, so this is just a joke to me. It's as some members on the board say....tinfoil talk.

 

[Gone4Good]

I don't need to adjust my portfolio. I am already in cash...
and have been for awhile.

~

The 100% cash portfolio is one strategy, but . . .

1) Current negative real short rates guarantee a loss on cash positions (which only gets worse if inflation accelerates and compounds over time).
2) What historically reliable, objective indicator are you using to determine when to get back in to risky assets?

 

[emilylynn]

The only way is to trade this sucker. Kind of pisses me off when I'd rather be gardening.

 

[ziggy29]

The way the financial media are preying on fear, if we hit Peak Tinfoil we could be in trouble.

 

[REWahoo]

The way the financial media are preying on fear, if we hit Peak Tinfoil we could be in trouble.

So you should have loaded up on AA in January when it was $28...but at $37 it looks like it could still be a real bargain!

 

[RockOn]

The sooner the plunge protection team lets the financial markets and housing prices reach equilibrium the better. I am waiting for that day.

 

[RockOn]

we still have a historically low unemployment and not too high of an inflation rate especially for those of us that lived through the 70s.

It's an illusion now.....that depends greatly on who is measuring it and how. This is very similar to the 70's. Inflation might even be spiking stronger today. A day rarely goes by without another new item breaking to a new high price. If inflation makes it into wages before the next deflationary period sets in, watch out. There is debate on the validity of unemployment measurements also. When everyone finally figures it out, I'll be ready for buy and hold long term investing.

 

[al_bundy]

supposedly the way the government reports inflation has changed a lot in the last 30 years and inflation today is just as bad as it was in the 1970's. this one brand of organic eggs i used to buy is not $8 a dozen, used to be less than $4 back in 2004.

now i just buy the brand X organic eggs and when my son gets old enough to eat an egg a day i'll buy him the $8 ones

and almost every food is up since 2004. some things have doubled, others are up around 50%.

 

[ziggy29]

This has so far been a relatively modest correction by longtern standards. I don't think it has officially fallen 20% from the October high to qualify as a "bear" market but I might be wrong. Back in the good ol' days of 1987, it did that in one day.

S&P 500 5-week high: 1576.09
Latest close: 1317.93

Change: -16.4%

The low in this down cycle was around 1260, which is almost exactly -20% from the high last year.

But in reality, the difference between "correction" and "bear market" can sometimes be so minor as to be noise.