Market crash: are we there yet ?

[Sapperwhite]

Originally Posted by chucklesR

Or, just answer in the standard liberal way, with a question.

Why don't you answer a question with a question?


Any reports of jumpers yet? I read somewhere that a guy in Ca. shot his whole family and then himself because he lost everything.

[wind_magic]

You know, you have to wonder about things when the entire world essentially cuts interest rates and you get, what, a 50 point bump on the Dow. Remember the days when a quarter point would drive prices up 400 points ? I think we are getting into the end game now.

* Cut rates
* Said they'd buy securities out of the market
* 700b$us bailout
* Fed window lending like crazy
* Etc, etc ..

President has spoke a few times, Paulson, you even had Bernanke come out today and say they've avoided a crash and we won't see Dow 7k until next year.

I mean what do they have left to try besides just letting things play out as they will, lampshade on the head, maybe do a little jig on the coffee table ?


--

Edit, moving this to the bottom.

I'm going to sell here at 1015 spy and see what they do with the close.

Edit - near the close, covering 1015. I have no idea what they are doing.

Edit, positioned into puts near close.

[sailaway21]

The Iraqi stock market is up 25% on the year. Real estate is particularly strong. Heard it on NPR so you know it's true, right? (g) Come to think of it, that's the only good economic news I've ever heard on NPR.

[sailhog]

Here's a contrarian point of view....

This morning it was reported that home prices have fallen an average of 4.8% nationwide. That's aweful, right? Terrible. Absolutely terrible. Really bad. Really really really bad...

This morning it was also reported that one year ago the Dow was at 14,164. Today it's roughly at 9200, down roughly 30%.

Suddenly real estate doesn't look like such a bad investment.

[wind_magic]

Really quiet in the market today, barely anyone doing anything, price has hardly changed since the open relative to the past week's crazy moves.

Oh that's right, it's Yom Kippur, I forgot. Holiday!

[wind_magic]

It really is amazing in the credit markets when you sit and look at it.

One example ...

Right now Ford Motor Company bonds w/ 1k$us face, maturing this coming January, are selling for around 910$us. I mean think about that. Bond holders are so freaked out that they are willing to let go of bonds for Ford that mature in three months for a 9% discount to face value. That's like 3% per month from now until they mature, or about a 40% yield on the year. I mean how crazy is that. These same bonds used to sell for nearly par value and yielded a few percentage points a year, if you were lucky.

I'm not saying Ford bonds are a good buy, by the way, there is a reason they have such a high yield. It is extraordinary though.


Edit - I wanted to add another example ...

General Motors 7.25% bonds with a face of 1k$us maturing in 2025, that's 17 years from now, are selling at about 230$us/per. That means that the yearly return of 72.5$us would pay for that bond in about 3.2 years. So if you believed that General Motors wasn't going to have to declare bankruptcy in the next 4 years, you'd make a profit. If you believed that General Motors wouldn't go bankrupt at all, then in 3.2 years the bond would have paid for itself, and you'd receive 72.5$us a year for the following 14 years AND receive a payment of 1000$us in 2025 for your troubles.

[sailhog]

Originally Posted by wind_magic

Really quiet in the market today, barely anyone doing anything, price has hardly changed since the open relative to the past week's crazy moves.

Oh that's right, it's Yom Kippur, I forgot. Holiday!

And don't forget Ramadan.

[camaraderie]

I must say, I am really glad you brought up soup. This discussion was getting so depressing but the thought of a nice cup of soup really warms me up. My particular favorite is the Oriental Flavor. Do you now what flavor that really is? I mean I know how beef soup gets its flavor from beef and chicken soup gets its' flavor from chickens. But do you really think they dunk Orientals in soup to make that flavor? It sounds pretty disgusting but it certainly tastes good. Must be kind of like hot dogs...If you saw what goes into them you wouldn't......What's that? You said Ramaden not Ramen? Ramaden is a holiday not a soup?
Oh...Nevermind....

[sailhog]

Cam,
I hear what you're saying. Rice-a-Roni, I'm sure you konw, is the San Francisco treat. I have to tell you, that the homosexuals they put in Rice-a-Roni are absolutely delicious.

[wind_magic]

Hog only said Ramadan because it's his favorite, it's the only holiday that he knows he won't end up with an apple in his mouth ...