Subprime Worries

[oxmlabe13]

This subprime will have enormous effects. I've been around this one in yesteryear. I spoke a lot about this at least a year past. . .if I could find the thread you would think I was a genius. What's occurring is that the men and women who purchased homes who shouldnt have been doing this (cause their credit sucks) start to have their own interest rates increase, coupled with the reality that their house is going down in value, this creates a bad position for the banks. They have collateral that is not the value of their loan, and the attention is paid by also the proprietor cant .

Anway, this will conquer the home market (if cash is more expensive, less property buyers, less need ), and most of us know the housing market plays a major part in the market. What happens to these men building high rise condos around me?

[Slmingsumfem82]

As stated over in
https://www.nigeriaforextrading.com/trading-system-and-egies/71-readthemarket-supply-demand-price-action.html


I will post a few links about the recent events here too.

Delong et al
http://delong.typepad.com/sdj/2007/12/mortgage-reset.html
http://calculatedrisk.blogspot.com/2007/12/plan-my-initial-reaction.html
http://delong.typepad.com/sdj/2007/12/tanta-of-calcul.html
http://delong.typepad.com/sdj/2007/12/a-good-take-on.html

Bigpicture's version
http://bigpicture.typepad.com/comments/2007/12/treasury-plan-t.html
http://bigpicture.typepad.com/comments/2007/12/underwriting-th.html

[Slmingsumfem82]

Another wonderful post to explain why the liquidity injections that are constant are starting to increasingly dissipate into thin air in regards to market effect, like nothing happened - at least in my perception.

http://www.nytimes.com/2007/12/14/opinion/14krugman.html?_r=1oref=slogin

[umi1976]

It didn't take much did it...


http://www.nzherald.co.nz/section/3/story.cfm?c_id=3objectid=10484557


A

[jomgemasem]

There are voices for 2008 being THE next bull market coming along with also the exact same for the opposite. Can really only is there somebody with some actual clarity or the future inform?
When we seek clarity, all we get is a hazy moon. Such is the nature of enlightenment.

As for the 2008 market direction, the funds and banks are tightening up their shoes. Should be an additional spike up to crush the places before they race to the departure in a week or so.

My crystal ball proceeds to state that this really is a bear/liquidation market awaiting confirmation (in the form of a bankruptcy). You may experience a bear market for many of 2008, following a rally in the first half of january.

And also a bull market for 2008? It can't happen without the cyclicals and financials . I do not find this as being likely during the next year since I believe that we are in the close of the beginning of the sub-prime shakeout, not the other way round.

I am uncertain if the subprime asset holders understand their own exposure; their risk management is incompetent. The cmo/cdos are collateralized and bundled derivatives. Just how much is each tranche worth? In a previous article I pointed out that all this subprime stuff is leveraged - therefore to get out from underneath you have to sell ten times the resources (i.e. stocks) to clear the face value of the subprime, which explains how the subprime is impacting the global equities markets.

By the way, perhaps I should not bring this up, but what are the current exposures of these portfolio insurers? Are the funds set to conquer the insurance companies for their market program buttons? Are the index futures arbs ready with their progr? Which will be the specialists well enough capitalized for these possibilities? These are machines against machines and humans .

There isn't a lot of upside potential whereas the downside is deep and dark. I would vote to get a bear in 2008.

However oscillator traders are all seeing an oversold market right now and the funds will want to clear out the places to their own run down. I would bet on a couple of up-spikes.

Best to scalp long rather than stay out all night since one morning could see an open 500 points down because of a bankruptcy, which is that affirmation the huge guys with their palms on the market program buttons are currently awaiting. Be aware that exxon was up $4 recently, which was fidelity selling resources and rotating off into oil. The money is positioning to get a crash and it only requires a single match to put off a fire sale.

Consider citi's abu dhabi money infusion. Most think this is a good thing but much did not move on quantity of 180,000,000. This usually means that citi is near capital impairment. The alternative strikes are waiting, In case it slides back under $30. Citi hitting on $25 might be taken as a confirmation sign.

The serious understanding is that each of the large banks around the world have advantage profiles very similar to citi, with a consequent affect on their capitalization. This is not good because banking is simply a house of cards.

And will we contemplate the consequence of a terrorist attack on a financial center - state London??

I have always believed that bic lighters would create the best currency after a meltdown: a mobile medium of trade, a fantastic store of value, also more useful intrinsic value than gold.


Upgrade: it is now 11/28, married, 1 day later, and the market did spike upward today 331 dow points sidelining the places. After another 100 up things this bounce is going to be finished and the way will be clear to get a run down to friday. Bounce that was next upwards is scheduled to the end of the year to january.