The big problem I see is the people that caused the mess are the same people who are still running the show more or less.
Until the market finally collapses any recovery will be short lived ...
From what I was reading the other day, the average Price-Earnings ratio for the S&P over its existance has been 15. With how negative everyone's expectations for the worldwide ecconomy is for the next several years you would expect people to have priced in a drop in earnings for most stocks and the Price-Earnings ratio to be (about) 10 to 12.5; with the massive drop in stock values over the last few months the S&P had fallen so far that its Price-Earnings ratio was now (roughly) 15.
DMeisterJ said:
What are you some kind of Masochist or something? Sheesh. These dark billowing clouds you're carrying around with you really kill my buzz. |
We're just being realistic. I mean from this time last year the DOW has lost almost 50% (about 40-45% to be specific) of its value.
We had two bags of grass, seventy-five pellets of mescaline, five sheets of high-powered blotter acid, a salt shaker half full of cocaine, a whole galaxy of multi-colored uppers, downers, screamers, laughers…Also a quart of tequila, a quart of rum, a case of beer, a pint of raw ether and two dozen amyls. The only thing that really worried me was the ether. There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge. –Raoul Duke
It is hard to shed anything but crocodile tears over White House speechwriter Patrick Buchanan's tragic analysis of the Nixon debacle. "It's like Sisyphus," he said. "We rolled the rock all the way up the mountain...and it rolled right back down on us...." Neither Sisyphus nor the commander of the Light Brigade nor Pat Buchanan had the time or any real inclination to question what they were doing...a martyr, to the bitter end, to a "flawed" cause and a narrow, atavistic concept of conservative politics that has done more damage to itself and the country in less than six years than its liberal enemies could have done in two or three decades. -Hunter S. Thompson
"Banks Admit Bailout Won't Work"
http://www.clusterstock.com/2008/10/banks-admit-bailout-won-t-work
And after a few days of silence, even the banks are finally admitting that. So it's back to the drawing board for Paulson & Co.
Next steps? Find a way to force the banks to write their assets down to nuclear winter levels, so 1) private investors don't have to worry about getting sandbagged and therefore invest more in the banks, and 2) the banks know they won't be forced to take more multi-billion dollar losses. Only then will the banks begin to lend again. And at that point, the only challenge will be finding people and companies to lend to, in an economy headed straight into the tank.)
NYT: , John Thain, the chief executive of Merrill Lynch, said on Thursday that banks were unlikely to act swiftly. Executives at other banks privately expressed a similar view.
“We will have the opportunity to redeploy that,” Mr. Thain said of the new capital on a telephone call with analysts. “But at least for the next quarter, it’s just going to be a cushion."...
“I don’t think that the market wants to see that capital being put to work to leverage the business up again,” said Roger Freeman, an analyst at Barclays Capital, which acquired parts of the now-bankrupt Lehman Brothers last month. “My expectation is it’s quarters off, not months off, before you see that capital being put to work.”...
Jamie Dimon, the chairman and chief executive of JPMorgan, said his bank was in a stronger position to use the money than some of its competitors.
“It’s clear that the government would like us to use the capital,” Mr. Dimon said on a conference call with analysts on Wednesday. “If you are a bank that is filling a hole, you obviously can’t do that.”
Who is "a bank that is filling a hole"? Seven of the nine that just got taxpayer money.
It breaks my heart to say this, but I think we're in for a world of hurt.
My Mario Kart Wii friend code: 2707-1866-0957
| FishyJoe said: The big problem I see is the people that caused the mess are the same people who are still running the show more or less. |
agreed.
psn- tokila
add me, the more the merrier.
It's fantastic how quickly the media and analysts shift between doom and optimism:
http://biz.yahoo.com/ap/081017/wall_street.html
Obviously these analysts make money by having an opinion, not by having a correct one.
My Mario Kart Wii friend code: 2707-1866-0957
From what I read it appears that Consumer Debt has (finally) reached 20% of GDP this year in the United States. Now, this may not seem (that) bad but Consumer Debt doesn't include Home Mortgages, Home Equity Loans, or Lines of Credit and is debt that is (primarly) held in credit cards and car loans.
| NJ5 said: It's fantastic how quickly the media and analysts shift between doom and optimism: http://biz.yahoo.com/ap/081017/wall_street.html Obviously these analysts make money by having an opinion, not by having a correct one. |
LOL, after the Dow went down 1.41% just before the market closed, they erased the whole article. Should have quoted it.
It was filled with quotes from some analyst saying things like "I think the market has found its bottom", "a few weeks ago everyone thought there would be another Great Depression, stocks were way oversold" and such. I'm guessing they won't be putting those back in.
My Mario Kart Wii friend code: 2707-1866-0957
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