Tommorow will be "Bloodly Blackest Monday" you have ever seen
- Thread starter ghemminger
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constitutional
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It's kind of disappointing to open a thread to see "This message is hidden because ghemminger is on your ignore list."
OptionsTrader
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I'm grateful.
grizzums
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A quote from the JP article I referred to earlier...
"Diversification through investment that not only provides better yields, but may offer access to an otherwise inaccessible transaction. According to ISDA, at the end of 2004, the notional amount for the interest rate and currency derivatives market was US$183.6 trillion Credit derivatives comprised 4.4% of the entire derivatives market at US$8.42 trillion The players include insurers, reinsurers, financial guarantors and hedge funds; but the largest players are commercial banks, who are net buyers of protection"
http://www.jpmorgan.com/cm/ContentS...organ/ts/TS_Content/General&cid=1136555202065
Some estimates have the Credit Derivative Mkts nearing $45 trillion USD....from (roughly) $8.42 trillion USD (at the end of 2004)....look at that combined "interest rate and currency derivative" market (at the end of 2004)? $183.6 trillion
Where is that number now? If we see continued pressure on the USD, what happens if some of this enormous amount of currency/ir insurance gets triggered?
If the credit derivatives market gets hammered in this.....watch out for the remainder of currency/ir derives to get hit. "but the largest players are commercial banks, who are net buyers of protection"?
Hate to get doom and gloom.
I think LEH is going to get particularly nailed. Watching mark to market in the financial sector after the market had it so clearly wrong on BSC is not going to be good. I hate seeing any cheer leading of these sorts of economic situations because the idea that this is a hit on the wealthy is a grossly economic ignorant and inaccurate thesis (<-- not referring to anyone here, Ive just seen this around).
"Diversification through investment that not only provides better yields, but may offer access to an otherwise inaccessible transaction. According to ISDA, at the end of 2004, the notional amount for the interest rate and currency derivatives market was US$183.6 trillion Credit derivatives comprised 4.4% of the entire derivatives market at US$8.42 trillion The players include insurers, reinsurers, financial guarantors and hedge funds; but the largest players are commercial banks, who are net buyers of protection"
http://www.jpmorgan.com/cm/ContentS...organ/ts/TS_Content/General&cid=1136555202065
Some estimates have the Credit Derivative Mkts nearing $45 trillion USD....from (roughly) $8.42 trillion USD (at the end of 2004)....look at that combined "interest rate and currency derivative" market (at the end of 2004)? $183.6 trillion
Where is that number now? If we see continued pressure on the USD, what happens if some of this enormous amount of currency/ir insurance gets triggered?
If the credit derivatives market gets hammered in this.....watch out for the remainder of currency/ir derives to get hit. "but the largest players are commercial banks, who are net buyers of protection"?
Hate to get doom and gloom.
I think LEH is going to get particularly nailed. Watching mark to market in the financial sector after the market had it so clearly wrong on BSC is not going to be good. I hate seeing any cheer leading of these sorts of economic situations because the idea that this is a hit on the wealthy is a grossly economic ignorant and inaccurate thesis (<-- not referring to anyone here, Ive just seen this around).
OptionsTrader
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G, if the market closes green tomorrow, will you promise to never return?
Original_Intent
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I see the market taking a half day off for a "cool down" period before that happens. My call is down 600 points before they put a tourniquet on it.
ryanmkeisling
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lol...or at least reveal the entire plan by the Global elite to push forward the Ron Paul presidency that you spoke of earlier.
Financials will be crushed
If Bear is worth 2 what is Merrill or Goldman worth? 12 month high on Bear was 168. These frauds deserve to be crushed. Real businesses should be fine. Wonder if market will even open tomorrow? I'd be looking to scoop up hard assets. Distressed Real estate in particular..
If Bear is worth 2 what is Merrill or Goldman worth? 12 month high on Bear was 168. These frauds deserve to be crushed. Real businesses should be fine. Wonder if market will even open tomorrow? I'd be looking to scoop up hard assets. Distressed Real estate in particular..
OptionsTrader
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Distressed real estate?
Why?
Why?
OptionsTrader
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The thread title pisses me off.
The truth is that the market may go up or down, it can be irrational with funds unloading their shorts due to margin calls on longs and homebuilders can shoot up 30% and kids watching at home will be dumbfounded. No one from the outside without inside information that the greater market does not have can predict what is going to happen on a particular day with very much certainty - there are too many variables. It isn't all about the news. If you really do know, then buy or sell thousands of ES contracts right now and put money on the line, otherwise it is all talk and it will either be followed up with
1) I sold you so. See how smart I am, or
2) Well it didn't tank today, but it will go down soon, you just wait and see.
Put money where your mouth is or shut it.
My $0.02 ($1 in 1913).
The truth is that the market may go up or down, it can be irrational with funds unloading their shorts due to margin calls on longs and homebuilders can shoot up 30% and kids watching at home will be dumbfounded. No one from the outside without inside information that the greater market does not have can predict what is going to happen on a particular day with very much certainty - there are too many variables. It isn't all about the news. If you really do know, then buy or sell thousands of ES contracts right now and put money on the line, otherwise it is all talk and it will either be followed up with
1) I sold you so. See how smart I am, or
2) Well it didn't tank today, but it will go down soon, you just wait and see.
Put money where your mouth is or shut it.
My $0.02 ($1 in 1913).
ghemminger
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Peter mentioned that Monday has a high probability to be the worse day you have ever seen.... That with all the market conditions....
You guys are totally underestimating what happened to Bear Stearns - this is a bailout that was totally unthinkable 2 weeks ago - the Fed is pulling sh#$% out from the Great Depression Playbook
AceNZ
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Just more noise from observers on the sidelines... I try to ignore it.
An upside "surprise" rate cut from the Fed isn't out of the question.
My perspective is that I'll probably be going long tomorrow, in select sectors. Sometime shortly after the initial flurry of public trading finishes in the morning might be a good time.
ghemminger
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ghemminger
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Breaking News - + China will be pulling 6% stake from Bear
U.S. Fed Cuts Discount Rate, Says Dealers May Borrow (Update4)
By Scott Lanman
March 16 (Bloomberg) -- The Federal Reserve, in emergency decisions aimed at containing a crisis of confidence in the U.S. financial system, cut the rate on direct loans to commercial banks and opened up borrowing at the rate to securities firms.
The moves, coming in an announcement timed for the start of trading on the Tokyo Stock Exchange, included commitments to encourage JPMorgan Chase & Co. to buy Bear Stearns Cos. after a run on the firm threatened the stability of global markets. The Fed also extended the maximum term of loans to commercial banks to 90 days from 30 days.
The Fed's first weekend change in borrowing costs since 1979 is Chairman Ben S. Bernanke's latest step to alleviate a credit squeeze that's exacerbating the U.S. economic slowdown. The dollar tumbled to a 12-year low against the yen and Treasury notes rallied as traders increased bets that officials will reduce their main rate by 1 percentage point when they meet on March 18.
``Clearly, the Fed is trying to provide more liquidity to prevent a more vicious cycle and race to the bottom,'' said Gary Schlossberg, senior economist at Wells Capital Management in San Francisco, which oversees $200 billion. ``The problem is there's so much concern about credit quality that now there are solvency issues, and it's something the Fed has a more difficult time dealing with.''
Stocks Weaken
Asian stocks tumbled. The Nikkei 225 Stock Average lost 4.2 percent at 11:40 a.m. in Tokyo, and the Hang Seng Index in Hong Kong retreated 4.7 percent.
``We've got a credit crunch situation in every corner of the market,'' said Tetsuro Sugiura, chief economist at Mizuho Research Institute Ltd. in Tokyo. ``The near collapse of Bear Stearns has shocked the authorities.''
The Fed lowered its so-called discount rate by a quarter of a percentage point to 3.25 percent, reducing the spread with the separate, main federal funds rate to a quarter point. In August, at the onset of financial-market pressures, the Fed narrowed the spread to a half point from 1 percentage point.
Bernanke, 54, is stepping up efforts to keep strains in financial markets from spiraling into a full-blown meltdown. Last week the central bank agreed to emergency loans to a non-bank, Bear Stearns, for the first time since the 1960s. Fed officials also announced a program to swap $200 billion in Treasuries for debt including mortgage-backed securities.
`Extreme Sense of Urgency'
``These moves underscore the extreme sense of urgency at the Fed,'' said David M. Jones, a former New York Fed economist who has written four books on the central bank. ``It seems unlikely the measures taken so far will calm the market down, but eventually they will stabilize the market.''
JPMorgan today agreed to buy Bear Stearns, the second- biggest underwriter of U.S. mortgage securities, for $240 million, less than a 10th of its value last week. In order to strike a deal before the opening of Tokyo trading, the Fed agreed to help JPMorgan finance up to $30 billion of Bear Stearns ``less liquid assets.''
The Fed is in effect assuming responsibility for managing the assets, a Fed official told reporters in a conference call. The central bank will manage the positions to minimize any market strains and maximize long-term value, the official said.
``It is a serious extension of putting the Federal Reserve's balance sheet in harm's way,'' said Vincent Reinhart, former director of the Division of Monetary Affairs at the Fed, and now a scholar at the American Enterprise Institute in Washington. ``That's got to tell you the economy is in a pretty precarious state.''
Primary Dealers
Starting tomorrow, the primary dealers in government securities who trade with the New York Fed bank daily will be able to borrow at the discount rate under a new lending facility, to be in place for at least six months, the Fed said. The Fed will accept a ``broad range'' of investment-grade collateral.
Shifting policy on a weekend is rare, though not unprecedented. About two months after Paul Volcker took office as Fed chief in 1979, he called a Saturday meeting of the Federal Open Market Committee to raise interest rates.
Today's events are ``nothing like the 1970s, which was about fighting inflation,'' said Jones. ``This is fighting a negative, self-reinforcing process'' of sliding collateral values, tighter bank credit and weakening of economic conditions, he said.
``These steps will provide financial institutions with greater assurance of access to funds,'' Bernanke said during a conference call with reporters after the announcement.
Adding to Wagers
Investors expect the Fed to lower its separate benchmark rate by as much as a full percentage point, to 2 percent, when policy makers meet March 18. That would exceed the 0.75-point emergency reduction on Jan. 22, which is the largest since the overnight interbank lending rate became the main tool of monetary policy about two decades ago.
Today's steps indicate the Fed is increasingly concerned about the investor exodus from mortgage debt, which threatens to deepen the housing contraction and overall recession.
New York Fed President Timothy Geithner said on the call that ``this is designed to help get liquidity to where it can help play an appropriate role in helping address the range of challenges facing particularly asset-backed securities markets.''
Fed governors agreed that the ``unusual and exigent circumstances,'' as stated in the Federal Reserve Act, existed for approving the lending to primary dealers, a Fed official said on the conference call. Today's actions were approved by all five members, a Fed official said.
---------------------------------------------------------- Following is a list of primary dealers in governmentsecurities:BNP Paribas Securities Corp.Banc of America Securities LLCBarclays Capital Inc.Bear, Stearns & Co., Inc.Cantor Fitzgerald & Co.Citigroup Global Markets Inc.Countrywide Securities CorporationCredit Suisse Securities (USA) LLCDaiwa Securities America Inc.Deutsche Bank Securities Inc.Dresdner Kleinwort Wasserstein Securities LLC.Goldman, Sachs & Co.Greenwich Capital Markets, Inc.HSBC Securities (USA) Inc.J. P. Morgan Securities Inc.Lehman Brothers Inc.Merrill Lynch Government Securities Inc.Mizuho Securities USA Inc.Morgan Stanley & Co. IncorporatedUBS Securities LLC.Source: Federal Reserve Bank of New York
U.S. Fed Cuts Discount Rate, Says Dealers May Borrow (Update4)
By Scott Lanman
March 16 (Bloomberg) -- The Federal Reserve, in emergency decisions aimed at containing a crisis of confidence in the U.S. financial system, cut the rate on direct loans to commercial banks and opened up borrowing at the rate to securities firms.
The moves, coming in an announcement timed for the start of trading on the Tokyo Stock Exchange, included commitments to encourage JPMorgan Chase & Co. to buy Bear Stearns Cos. after a run on the firm threatened the stability of global markets. The Fed also extended the maximum term of loans to commercial banks to 90 days from 30 days.
The Fed's first weekend change in borrowing costs since 1979 is Chairman Ben S. Bernanke's latest step to alleviate a credit squeeze that's exacerbating the U.S. economic slowdown. The dollar tumbled to a 12-year low against the yen and Treasury notes rallied as traders increased bets that officials will reduce their main rate by 1 percentage point when they meet on March 18.
``Clearly, the Fed is trying to provide more liquidity to prevent a more vicious cycle and race to the bottom,'' said Gary Schlossberg, senior economist at Wells Capital Management in San Francisco, which oversees $200 billion. ``The problem is there's so much concern about credit quality that now there are solvency issues, and it's something the Fed has a more difficult time dealing with.''
Stocks Weaken
Asian stocks tumbled. The Nikkei 225 Stock Average lost 4.2 percent at 11:40 a.m. in Tokyo, and the Hang Seng Index in Hong Kong retreated 4.7 percent.
``We've got a credit crunch situation in every corner of the market,'' said Tetsuro Sugiura, chief economist at Mizuho Research Institute Ltd. in Tokyo. ``The near collapse of Bear Stearns has shocked the authorities.''
The Fed lowered its so-called discount rate by a quarter of a percentage point to 3.25 percent, reducing the spread with the separate, main federal funds rate to a quarter point. In August, at the onset of financial-market pressures, the Fed narrowed the spread to a half point from 1 percentage point.
Bernanke, 54, is stepping up efforts to keep strains in financial markets from spiraling into a full-blown meltdown. Last week the central bank agreed to emergency loans to a non-bank, Bear Stearns, for the first time since the 1960s. Fed officials also announced a program to swap $200 billion in Treasuries for debt including mortgage-backed securities.
`Extreme Sense of Urgency'
``These moves underscore the extreme sense of urgency at the Fed,'' said David M. Jones, a former New York Fed economist who has written four books on the central bank. ``It seems unlikely the measures taken so far will calm the market down, but eventually they will stabilize the market.''
JPMorgan today agreed to buy Bear Stearns, the second- biggest underwriter of U.S. mortgage securities, for $240 million, less than a 10th of its value last week. In order to strike a deal before the opening of Tokyo trading, the Fed agreed to help JPMorgan finance up to $30 billion of Bear Stearns ``less liquid assets.''
The Fed is in effect assuming responsibility for managing the assets, a Fed official told reporters in a conference call. The central bank will manage the positions to minimize any market strains and maximize long-term value, the official said.
``It is a serious extension of putting the Federal Reserve's balance sheet in harm's way,'' said Vincent Reinhart, former director of the Division of Monetary Affairs at the Fed, and now a scholar at the American Enterprise Institute in Washington. ``That's got to tell you the economy is in a pretty precarious state.''
Primary Dealers
Starting tomorrow, the primary dealers in government securities who trade with the New York Fed bank daily will be able to borrow at the discount rate under a new lending facility, to be in place for at least six months, the Fed said. The Fed will accept a ``broad range'' of investment-grade collateral.
Shifting policy on a weekend is rare, though not unprecedented. About two months after Paul Volcker took office as Fed chief in 1979, he called a Saturday meeting of the Federal Open Market Committee to raise interest rates.
Today's events are ``nothing like the 1970s, which was about fighting inflation,'' said Jones. ``This is fighting a negative, self-reinforcing process'' of sliding collateral values, tighter bank credit and weakening of economic conditions, he said.
``These steps will provide financial institutions with greater assurance of access to funds,'' Bernanke said during a conference call with reporters after the announcement.
Adding to Wagers
Investors expect the Fed to lower its separate benchmark rate by as much as a full percentage point, to 2 percent, when policy makers meet March 18. That would exceed the 0.75-point emergency reduction on Jan. 22, which is the largest since the overnight interbank lending rate became the main tool of monetary policy about two decades ago.
Today's steps indicate the Fed is increasingly concerned about the investor exodus from mortgage debt, which threatens to deepen the housing contraction and overall recession.
New York Fed President Timothy Geithner said on the call that ``this is designed to help get liquidity to where it can help play an appropriate role in helping address the range of challenges facing particularly asset-backed securities markets.''
Fed governors agreed that the ``unusual and exigent circumstances,'' as stated in the Federal Reserve Act, existed for approving the lending to primary dealers, a Fed official said on the conference call. Today's actions were approved by all five members, a Fed official said.
---------------------------------------------------------- Following is a list of primary dealers in governmentsecurities:BNP Paribas Securities Corp.Banc of America Securities LLCBarclays Capital Inc.Bear, Stearns & Co., Inc.Cantor Fitzgerald & Co.Citigroup Global Markets Inc.Countrywide Securities CorporationCredit Suisse Securities (USA) LLCDaiwa Securities America Inc.Deutsche Bank Securities Inc.Dresdner Kleinwort Wasserstein Securities LLC.Goldman, Sachs & Co.Greenwich Capital Markets, Inc.HSBC Securities (USA) Inc.J. P. Morgan Securities Inc.Lehman Brothers Inc.Merrill Lynch Government Securities Inc.Mizuho Securities USA Inc.Morgan Stanley & Co. IncorporatedUBS Securities LLC.Source: Federal Reserve Bank of New York
P
PeacePlan
Guest
Don't know if tomorrow will be the day but I think it is coming. Fed is running out of rabbits to pull out of its hat IMO
In 1929 it all started by a failed Austrian bank and if tomorrow something else goes bad like say a big bank in China, Japan or elsewhere has problems it could happen. The thing to remember is they are all tied together with things like Mortgages, Dollar, Stock Market, and the ground they stand on is a massive derivative market.
If the stock market takes a big enough hit it could cause other things to fail in the system and that is what the Fed is attempting to stop.
Question is: Will they do this successfully tomorrow - most likely. One day they will not have enough fingers to stick in all the holes in the paper dam that has been built. Should be an interesting day but most likely not a major crash day as too many people expect it. It will most likely happen when no one is paying attention much?
In 1929 it all started by a failed Austrian bank and if tomorrow something else goes bad like say a big bank in China, Japan or elsewhere has problems it could happen. The thing to remember is they are all tied together with things like Mortgages, Dollar, Stock Market, and the ground they stand on is a massive derivative market.
If the stock market takes a big enough hit it could cause other things to fail in the system and that is what the Fed is attempting to stop.
Question is: Will they do this successfully tomorrow - most likely. One day they will not have enough fingers to stick in all the holes in the paper dam that has been built. Should be an interesting day but most likely not a major crash day as too many people expect it. It will most likely happen when no one is paying attention much?
angelatc
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I'm not underestimating it. JC Morgan just bought Bear Stearns for $2 per share. That's (according to MSNBC) a $236 million dollar deal, a fraction of what the company was supposed to be worth. A week ago it was trading at what - $50 or so?
If nothing else, that should tell us that something is very, very wrong on Wall Street.
Personally, I suspect it's all that fake money.
ghemminger
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PAul Atkins
"nothing to see here" I would discount any domino theories - The US has a stable economy
"nothing to see here" I would discount any domino theories - The US has a stable economy
