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TranceAddict Investors Club @ Marketocracy (pg. 115)
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| Krypton |
| quote: | Originally posted by we_R_DNA
Is this still going or did it end?
and is it to late to join? |
Yes, it's going. It will never end. |
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| mndeg |
i dont believe EU guaranteeing intrabank lending is going to make banks lend.
banks aren't lending because they don't have any spare money. a lot of them are hugely upside down. we'll see next week. |
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| Shakka |
| quote: | Originally posted by mndeg
i dont believe EU guaranteeing intrabank lending is going to make banks lend.
banks aren't lending because they don't have any spare money. a lot of them are hugely upside down. we'll see next week. |
I don't agree with that statement. Most banks' capital ratios are still above their statutory minimums meaning that they do still have some spare capital (of course the caveat being the value of any potentially mis-valued illiquid/Level 2 or 3 securities held on their balance sheets). The problem as I've been reading it is that even when banks have been exchanging illiquid securities for treasuries (in the U.S.) they have been hording them because they don't want to lend given the lack of trust. Standing behind interbank loans would go a long way to at least repairing one part of the market. Granted, you said the EU, though the ECB has been pouring so much money on the problem, throwing out near limitless new liquidity that I find it hard to believe that there would be an issue of drumming up new funds in the EU. Leverage is a different issue of course, but I think my basic premise stands.
I did just read a very scary article related to lines of credit not being honored and that being potentially VERY dangerous to global trade and shipping in particular. |
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| spdandpwr |
| :mad: stupid market turnaround kicked my ass!!!! :whip: :whip: :whip: :whip: |
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| Groundhog Boy |
| quote: | Originally posted by spdandpwr
:mad: stupid market turnaround kicked my ass!!!! :whip: :whip: :whip: :whip: |
If you were short after 5 straight down days last week, you deserved it. The two rallies on Friday were fairly clear indicators that things were starting to turn around and the European banks put it way over the top.
I'm not saying that it's all clear skies ahead, but I completely expected today's rally.
Anyone buy MS on Friday? I considered, but wouldn't put the chips on the table for the whole weekend. |
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| spdandpwr |
| quote: | Originally posted by Groundhog Boy
If you were short after 5 straight down days last week, you deserved it. The two rallies on Friday were fairly clear indicators that things were starting to turn around and the European banks put it way over the top.
I'm not saying that it's all clear skies ahead, but I completely expected today's rally.
Anyone buy MS on Friday? I considered, but wouldn't put the chips on the table for the whole weekend. |
haha...yea...i was short for five days...i am just upset that the turnaround was so big that i lost everything i gained plus more. i bought some KO and will start buying more big names before they skyrocket again. |
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| occrider |
Yup so capitalism as we know it is over. I don't like it, because it clashes with the free market economist in me, but I knew that Paulson had to do something really big, and they definitely did. Hopefully once things stabilize they can extricate themselves from bank ownership (of course with a vamped up regulatory framework in place).
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U.S. Treasury Said to Invest in Nine Major U.S. Banks (Update2)
By Robert Schmidt and Peter Cook
More Photos/Details
Oct. 13 (Bloomberg) -- The Bush administration will announce a plan to rescue frozen credit markets that includes spending about half of a total of $250 billion for preferred shares of nine major banks, people briefed on the matter said.
The companies are Citigroup Inc., Wells Fargo & Co., JPMorgan Chase & Co., Bank of America Corp., Goldman Sachs Group Inc., Morgan Stanley, State Street Corp., and Bank of New York Mellon Corp., the people said. One of the people also said Merrill Lynch & Co. will receive an investment.
The injections represent a new approach for Treasury Secretary Henry Paulson's attempts to prevent a financial market meltdown from sending the U.S. economy into a prolonged recession. He's following similar interventions by European leaders and using broad powers Congress gave him earlier this month to save the country's banking system.
``They've decided they need to do something drastic and this is drastic,'' said Gerard Cassidy, a bank analyst at RBC Capital Markets in Portland, Maine.
None of banks getting government money was given a choice about it, said one of the people familiar with the plans. All of the banks involved will have to submit to compensation restrictions, said the person.
The government will also guarantee the banks' newly issued senior unsecured debt, making it easier for them to refinance their liabilities, the person said.
Allocating Money
The Treasury plans to spend $25 billion each for stakes in Citigroup and JPMorgan, people said. Another $25 billion will be divided between Bank of America and Merrill, which agreed last month to be acquired by Bank of America. Goldman and Morgan Stanley will each get $10 billion, while State Street and Bank of New York will get injections of about $3 billion each, people said.
Financial institutions are struggling to regain the confidence of investors, counterparties and clients after bad loans caused more than $635 billion of writedowns across the industry. Falling share prices have made it harder to raise equity while surging borrowing costs have made debt refinancing harder.
Paulson, Federal Reserve Chairman Ben S. Bernanke and FDIC Chairman Sheila Bair scheduled at 8:30 a.m. press conference tomorrow in Washington. Paulson's initiative follows an announcement in Europe that France, Germany, Spain, the Netherlands and Austria committed $1.8 trillion to guarantee bank loans and take stakes in lenders.
The press conference at Treasury will address ``a series of comprehensive actions to strengthen public confidence in our financial institutions and restore functioning of our credit markets,'' the department said in a e-mailed statement.
Chief executive officers of major U.S. banks met with Paulson to discuss the options for helping markets. Stocks in the U.S. earlier today rallied the most in seven decades, pushing the Standard & Poor's 500 Index up 11.6 percent.
To contact the reporter on this story: Robert Schmidt in Washington at [email protected].
http://www.bloomberg.com/apps/news?...u714&refer=home
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| Krypton |
| Wish I had money. |
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| spdandpwr |
| quote: | Originally posted by Krypton
Wish I had money. |
so you can buy the good stocks at firesale prices? |
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| Groundhog Boy |
| quote: | Originally posted by Krypton
Wish I had money. |
+1
I bought in way too early on some things that I thought were too cheap, wash sale rules played in, especially with the heightened volatility, and now I'm trying to dig out of a hole. Today was a good start, but not even close to making it back to even. |
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| mndeg |
| Paulson was forced to guarantee interbank lending because the EU did it. On Friday he was still saying he wasn't going to do it. Many smaller countries are going to default on their debt very soon |
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| verndogs |
| Morgan Stanley made me a happy man :) |
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