Friday, October 10, 2008

Global Financial Crisis: Further Meltdown today...

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


Estrelita Soliano Grosse said...

I'm a new fan. Found you while following the sedition trial of RPK. Browsed through your site and liked what I saw.

I wish your easy listening was a little higher so it would be faster to choose a song while enjoying your writings. Just a suggestion. :P

I'll be back again!

TheWhisperer said...

I am glad you find my blog of interest to you.

Perhaps Madam would like to suggest some songs for me to add further.

Thank you for dropping by. It's indeed an honour to me.

Welcome to The Whisperer..

Estrelita Soliano Grosse said...

hmmm let me think!

How about
"Lost without you" by Robin Thicke, "I wanna go home" by Michael Buble, "Original people" by John Legend, "Annie's Song" by John Denver, "Finally" by Fergie,
"Tears in Heaven" by Eric Clapton
and lastly,
"I finally found someone" Bryan Adams and Barbara Streisand

Thanks so much! Now I feel so welcome here.

ctchoo said...

Bro Whisperer

I salute you for having taken time out to show moral support for RPK.

On the matter of the Icelandic fiasco I just want to say that "deregulated capitalism" and the push for "open economies" has serious downsides called "abuse" and "greed". We are witnessing both now.

TheWhisperer said...

Mr CTChoo,

I am Useless when it comes to Policies and things like that.

I approached the whole situation from behavioural point of view and some applications of my know-hows with the identification of signs written all over the places.

I don't expect anyone to buy my views as i am no marketeer like those Americans.

On this post, I made my commitment.
S&P500 at 800points while oil should bottomed out at around 77 dollars.

Well, as of Friday's trading, both came close enough and considering the margin of error in such situation, I guessed it was quite close. And at this very moment, oil is up from a low of 77.70 and S&P500 is up from low of 839 points. The futures is indicating a uptrend in Dow tonight.

G7 and all these moves by central banks all over the whole is giving equity markets a stabilizing effect. However, i don't expect it to last...

This problem is too Big to do anything about it. Worse is not over yet. Volatility may fizzle off for the time being.

Estrelita Soliano Grosse said...

Hi, Thanks for putting the easy listening a little higher :)

Thanks also for adding the songs!

Very kind of you.

Check my blog! Surprise for you there!