Ready for a market correction?

[Freak Out]

Have you thought about Sirius? Currently at $2.84. It's not a recommend over at fool because they lose more money than they make and have yet to make a profit, but I think it might be worth the risk. Dump 20k into it and hopefully watch it grow to $15 a share in 5 years. A while back I saw it around $1 a share. I don't think the company is going to go away and it could eventually be bought out by some media or internet company.

When I first heard of merger talks with XM I thought about buying a bit but have not done so. I'm still just a bit leery of it. I do own a little XM after buying some cheap a few years ago. I sold most when it hit like $36 but it has tanked since then.

Anyone get any Blackstone today? It's up 18 percent already.

[Freak Out]

Damn chicken littles anyway..........


BIS warns of Great Depression dangers from credit spree

By Ambrose Evans-Pritchard
Last Updated: 9:02am BST 25/06/2007

The Bank for International Settlements, the world's most prestigious financial body, has warned that years of loose monetary policy has fuelled a dangerous credit bubble, leaving the global economy more vulnerable to another 1930s-style slump than generally understood.

Construction in Shanghai: BIS warns of Great Depression dangers from credit spree
The BIS said China may have repeated the disastrous errors made by Japan in the 1980s

"Virtually nobody foresaw the Great Depression of the 1930s, or the crises which affected Japan and southeast Asia in the early and late 1990s. In fact, each downturn was preceded by a period of non-inflationary growth exuberant enough to lead many commentators to suggest that a 'new era' had arrived", said the bank.

The BIS, the ultimate bank of central bankers, pointed to a confluence a worrying signs, citing mass issuance of new-fangled credit instruments, soaring levels of household debt, extreme appetite for risk shown by investors, and entrenched imbalances in the world currency system.

"Behind each set of concerns lurks the common factor of highly accommodating financial conditions. Tail events affecting the global economy might at some point have much higher costs than is commonly supposed," it said.

The BIS said China may have repeated the disastrous errors made by Japan in the 1980s when Tokyo let rip with excess liquidity.
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"The Chinese economy seems to be demonstrating very similar, disquieting symptoms," it said, citing ballooning credit, an asset boom, and "massive investments" in heavy industry.

Some 40pc of China's state-owned enterprises are loss-making, exposing the banking system to likely stress in a downturn.

It said China's growth was "unstable, unbalanced, uncoordinated and unsustainable", borrowing a line from Chinese premier Wen Jiabao

In a thinly-veiled rebuke to the US Federal Reserve, the BIS said central banks were starting to doubt the wisdom of letting asset bubbles build up on the assumption that they could safely be "cleaned up" afterwards - which was more or less the strategy pursued by former Fed chief Alan Greenspan after the dotcom bust.

It said this approach had failed in the US in 1930 and in Japan in 1991 because excess debt and investment built up in the boom years had suffocating effects.

While cutting interest rates in such a crisis may help, it has the effect of transferring wealth from creditors to debtors and "sowing the seeds for more serious problems further ahead."

The bank said it was far from clear whether the US would be able to shrug off the consequences of its latest imbalances, citing a current account deficit running at 6.5pc of GDP, a rise in US external liabilities by over $4 trillion from 2001 to 2005, and an unpredented drop in the savings rate. "The dollar clearly remains vulnerable to a sudden loss of private sector confidence," it said.

The BIS said last year's record issuance of $470bn in collateralized debt obligations (CDO), and a further $524bn in "synthetic" CDOs had effectively opened the lending taps even further. "Mortgage credit has become more available and on easier terms to borrowers almost everywhere. Only in recent months has the downside become more apparent," it said.

CDO's are bond-like packages of mortgages and other forms of debt. The BIS said banks transfer the exposure to buyers of the securities, giving them little incentive to assess risk or carry out due diligence.

Mergers and takeovers reached $4.1 trillion worldwide last year.

Leveraged buy-outs touched $753bn, with an average debt/cash flow ratio hitting a record 5:4.

"Sooner or later the credit cycle will turn and default rates will begin to rise," said the bank.

"The levels of leverage employed in private equity transactions have raised questions about their longer-term sustainability. The strategy depends on the availability of cheap funding," it said.

That may not last much longer.

Information appearing on telegraph.co.uk is the copyright of Telegraph Media Group Limited and must not be reproduced in any medium without licence. For the full copyright statement see Copyright

[Merlin]

If you really want a market downturn, keep letting Greenspan shoot off his mouth, pass universal healthcare and the imigration reform bill.

[Tyrone Bigguns]

If you really want a market downturn, keep letting Greenspan shoot off his mouth, pass universal healthcare and the imigration reform bill.

What does greenspan have to do with the market?

[Freak Out]

If you really want a market downturn, keep letting Greenspan shoot off his mouth.

That is what gets me, the old fuck scratching his balls the wrong way sends the market down 200 pts.

[LL2]

I was young in the 80’s and don’t know the history behind the collapse of the Japanese economy, but I doubt China’s situation is similar. China has a cash reserve of 1 trillion dollars, whereas the US gov’t has a debt more than that. I’m not an economics expert but don’t think China will experience a 1929 type crash, but maybe a 1987 type crash as their market is a little overheated.

[Scott Campbell]

Yo, so what can I do to be a high powered stock owning Nabisco?

I always read this threads when you guys talk about $$$ but don't post in them cuz I don't have any info to contribute. What would be a good starting point?

Charging a subscription for ParkerRats.

[GrnBay007]

Yo, so what can I do to be a high powered stock owning Nabisco?

I always read this threads when you guys talk about $$$ but don't post in them cuz I don't have any info to contribute. What would be a good starting point?

Charging a subscription for ParkerRats.

I contribute my 2 cents every now and then. :P

[GrnBay007]

Yo, so what can I do to be a high powered stock owning Nabisco?

I always read this threads when you guys talk about $$$ but don't post in them cuz I don't have any info to contribute. What would be a good starting point?

I prefer stock owning Cracker...but, oh well. :P

EVERYONE advises a starting point is investing if your employer/company contributes or matches your contribution in a deferred comp....or whatever it may be called where you work. I have been doing that at the minimum amount for years....but this year took the plunge and tripled my contribution to get the max from the Department.

[LL2]

Yo, so what can I do to be a high powered stock owning Nabisco?

I always read this threads when you guys talk about $$$ but don't post in them cuz I don't have any info to contribute. What would be a good starting point?

I prefer stock owning Cracker...but, oh well. :P

EVERYONE advises a starting point is investing if your employer/company contributes or matches your contribution in a deferred comp....or whatever it may be called where you work. I have been doing that at the minimum amount for years....but this year took the plunge and tripled my contribution to get the max from the Department.

Your a smart cookie! Increase it 1% every year until you reach 10% of your salary. You'll be on your way to a nice retirement.

[BallHawk]

I contribute my 2 cents every now and then. :P

Clever!

[Merlin]

If you really want a market downturn, keep letting Greenspan shoot off his mouth, pass universal healthcare and the imigration reform bill.

What does greenspan have to do with the market?

Every time he opens his mouth publically, the market goes down. The problem is that he has been saying that we are headed for a recession for 3 years now and some people actually believe him! Economists are basically glorified statisticians. Everything they say is based off of a certain set of numbers and even if those numbers are inaccurate, it doesn't interfere with their logic.

The Truth:
Inflation - Directly affected by two factors: Price of Gas (not oil) and Minimum Wage hikes. When the price of gas is high, everything is affected because the cost of transportation rises. When minimum wage increases, most everything is affected because a majority of Union Wages are based off of the minimum wage so those wages go up, the hospitality business raises their prices because the minimum wage goes up. So now everything produced with union labor goes up and the price of a Big Mac, a hotel room and a pizza goes up. So in essence, everything the middle consumes goes up in price. The exception is the wages that non-union middle class workers get. Very few non-union and non hospitality jobs out there adjust their wages based on the minimum wage. Agricultural jobs are also affected by minimum wage. Minimum wage hikes are usually gradual increases so the average consumer does not realize that by the time the full minimum wage increase gets here that they are now paying more for products and also paying more in taxes for those products. It's a good scam and people fall for it every time. The rate of inflation doesn't appear to go up much because it was a "gradual" increase. If the price of your Big Mac goes from $1.99 to $2.25 over the course of a year, you don't even think about it. BUT, that is a 12.5% increase in price and much higher then the normal rate of inflation. The tax goes from (5.5% where I live in WI) $.11 to $.13 or an 18% increase in tax. Now apply that to most products out there. Hopefully you get the picture, congress bets you won't.

Recession - When you don't have any money or are do not feel confident in spending money, the economy tanks and our whole economic system tumbles. Some ways to tumble the economy: Raise taxes, higher interest rates, stagnant wages, job losses. Ways to prevent this: Tax Cuts (the government is taking in record amounts of money since the Bush tax cuts because the people & businesses are spending money), Allow the market to determine the rates, Allow the free market to determine the wages and not the government, Job losses are usually the last thing to go in a recession and shipping jobs overseas is a falacy. If as consumers we did not demand lower prices for goods, there would be no reason to purchase items from say, China. The fact is, we thrive on low price goods and most of us could not afford buying everything from American Made Union products.

Unemployment in this country has been in the low 4% range for years now, lower then when Clinton was in office. Our GDP is up, Government Revenues are up, health care costs are stabilizing and our economy has been solid. This has all transpired since the Bush tax cuts of 2002-2003. Yet, a moron like Greenspan opens his mouth and it all falls apart. Yet, we have a congress and in a lot of cases state governments that are clamoring for more money, universal health care and taxing the evil rich who are already paying half the tax burden as it is in this country.

And yet, people still vote for them.

[Scott Campbell]

If you really want a market downturn, keep letting Greenspan shoot off his mouth, pass universal healthcare and the imigration reform bill.

What does greenspan have to do with the market?

Every time he opens his mouth publically, the market goes down.

I remember Greenspan telling congress about "irrational exuberance" just ahead of the dot.bomb debacle. Nostradamus could learn a thing or two from Alan.

[Scott Campbell]

If you really want a market downturn, keep letting Greenspan shoot off his mouth, pass universal healthcare and the imigration reform bill.

What does greenspan have to do with the market?

Every time he opens his mouth publically, the market goes down.

I remember Greenspan telling congress about "irrational exuberance" just ahead of the dot.bomb debacle. Nostradamus could learn a thing or two from Alan.

[Scott Campbell]

Yo, so what can I do to be a high powered stock owning Nabisco?

I always read this threads when you guys talk about $$$ but don't post in them cuz I don't have any info to contribute. What would be a good starting point?

I prefer stock owning Cracker...but, oh well. :P

EVERYONE advises a starting point is investing if your employer/company contributes or matches your contribution in a deferred comp....or whatever it may be called where you work. I have been doing that at the minimum amount for years....but this year took the plunge and tripled my contribution to get the max from the Department.

Your a smart cookie! Increase it 1% every year until you reach 10% of your salary. You'll be on your way to a nice retirement.

I also really applaud this. Payroll witholding automates savings discipline.

So 007, did the impact to your cash flow hurt? Or has it been relatively painless?