Iceland went bust and slipped into abyss.. Who is next? I am not joking here. We are talking to a tune of US 360 trillion of subprime mortgages at its peak. Easy loan through inflation of assets value. In this particular case, housing asset. And all these mortgages turned into financial papers which became tradable and spread across the global financial system.
Originated from the US and found it's way to Europe and some parts of Asia. Now, US is having big problem trying to withstand this destructive force, what more can we expect from Europe? From my stand, European countries are going to be the biggest loser of this subprime turmoil. While its impact on Asia remained manageable. Perhaps, South Korea would be the hardest hit. Other than that, the exposure can be considered within safety limit. The questions now are: When will all these be over? Where is the bottom? Is all the recent rescue packages enough? What about the synchronized interest rate cut? And we even get controversial views arguing over the state of US economy: Whether they are already in recession or going into one?
I find all these jerks disgusting. Look at the bigger picture, all of you hypocritical jerks!! Keep yourselves abreast with Reality and stop living in your enclosed world of technical analysis filled with false hopes. And then came one jerk from Merill Lynch trying to be smart. He presented the dividend yield watchamacallit and claimed that the market remained bullish as the dividend yield in US is still above the 3% level. See what i mean? Pathetic!! Humbugs all of them.
Finally get to release my disgusts here.. Allow this layman to answer some of the questions above. Is all the rescue packages enough? If we look at the size of this subprime, we easily need at least US 80 trillion just to fix this problem worldwide. Consider what they have proposed recently, it's just chickenfeed as Alan Greenspan has put it. Interest rate cut came a tad too late. In fact, they reacted too slow in addressing this problem. Damage has already been done. Not much of hope now. We could be staring at the door of depression now.
McCain claimed that he knows how to get US out of this financial crisis during his 2nd debate with Obama. He shot himself in his balls. If he really does know, why the need to wait till he get elected as president? If he is true to the people and the country, he should be doing it right now. Isn't this a threat or a blackmail? Obama remained realistic. He told the people he would try to make everyone keep their home if elected. Here's the hint to the two aspiring Presidential elect.. Keep to basics and don't attempt to touch on this financial crisis. There is no way to get out of this now. Just face this hurtful fact!! Pit-less bottom and may take years to recover. This ain't over yet for sure.
For traders, I would suggest all of you to take a look at the S&P 500. You may consider taking a calculated risk to call for a buy when S&P 500 hit 800 and below. Why the 800 level? Layman instinct. But the truth is... remember last year when someone took a US1B bet on S&P 500 futures to hit 800 points by a certain period? See, so simple from layman. I just take that as a guide. Crude may bottom out after hitting around the US77 mark. Just my layman prediction. I got the top right. Well, almost right. Missed by a mere 73 cents.
Don't trust jerks with your money, especially in times like this.
- Parting words of wisdom