Economy in death spiral?

[aesir]

Ok, well I just got off my forex trading platform and I'm looking at yen won and renminbi all having spreads of more then 6 to 7 basis points relative to the dollar.

My only question is...

WHAT THE FUCK IS GOING ON?

Dow today nose dived to low 7000's. My calcs are telling me that resistance at this level is beginning to loosen and I won't be surpised if the bleeding won't stop at mid 6000's.

Futures markets for most NYSE stocks are doing this ... (makes giant waving movements with arms) which just means people are seeing far more extrinsic volatity value then people expected six or even two months ago.

Indicators suggest that Employment numbers for Q1 are gonna be a bloodbath.

And to top it all off Bammy is sitting on his hands and doing squat.

These days I'm starting to go to sleep with cold sweats and I'm not eating right.ArGh!?!?!

Anyhow, friends, I think it's all over. Game over man.

[ClydeR]

What are "extrinsic volatility value" and "Bammy"?

[Kranar]

You're a trader, not an investor, correct?

Man, times like these are gold and a one in a life time opportunity. Today, the S&P 500 was some of the easiest trading imaginable, just look at this beauty of a chart, look at the 1 day interval:

http://www.google.com/finance?q=INDEXSP%3A.INX

Very rarely do you get to do an OPG short right off the morning with a trailing stop, and pretty much get to keep that short sell wracking up money for the entire day as the thing just goes down, down, and down.

I never understood how people trade forex since it's a zero sum game, which means ineffective traders will get blown out, resulting in a much more efficient and competitive market. I don't trade forex directly, I use currency mostly because my algos arb markets in different countries, but heck I'm always interested to learn.

As for the the Dow... yeah, I agree this is a disaster. I do have to snicker at the gurus though, like Warren Buffet who tried to be a hero by pumping billions of dollars into GE at $25, trying to reassure investors that now is a great time to buy while things are so cheap...

Yeah... GE is now at $8.

There was also some debate on here where someone was claiming AIG would be a good buy for the government, and that you know... in 12 months AIG would return to a reasonable market cap and the government would profit off of it. I remember having AIG short at 5 bucks back then and laughing at the prospect of AIG returning to anything but the worthless piece of crap it is.

Well it's now at 53 cents. I sold mine at a dollar even. Technically if you did the math at the time, AIG should have only been worth 80 cents, I was actually surprised it took so long to get down to where it currently is.

[Stretch]

I've seen a couple of sources estimate unemployment to peak out at 9% to 10% by end of year before beginning to rebound. Not that projections are worth shit anyway, but it's still scary.

It's not an easy time to be a casual investor. I'm in it for the long haul so I'm still throwing in 11% into my 401(k) and maxing out my Roth in a mix of S&P index funds and some bonds, but it's pretty tough psychologically to see the line keep going down.

Yields with deposits are so low now that I'm seriously debating buying real estate, just to put my money somewhere instead of earning 3.05%. I have some $35k sitting around doing jack shit, and I don't have the time, money, or desire to research to actively trade.

[phantasm]

You should invest in some Section 8 housing.

[Tsa`ah]

You should invest in some Section 8 housing.

Shit that was funny.

[Kembal]

Trading RMB is a terrible terrible idea. You're essentially betting on the attitiude of the Chinese gov't.

As for economic recovery, don't expect one til late 2010 at the earliest. There's just too much debt that needs to be restructured right now, and the banking system is nowhere close to stability. I'll bet that unemployment hits 13% to 15% before its all over. (and that true unemployment reaches 20%+)

[The Ponzzz]

Trading RMB is a terrible terrible idea. You're essentially betting on the attitiude of the Chinese gov't.

As for economic recovery, don't expect one til late 2010 at the earliest. There's just too much debt that needs to be restructured right now, and the banking system is nowhere close to stability. I'll bet that unemployment hits 13% to 15% before its all over. (and that true unemployment reaches 20%+)

Agreed.

[Miscast]

Kranar, can you teach us how to short stuff?

[Gan]

Just wait until the 2nd wave of defaults hit.

Alt+A loans are the next expected wave (for defaults) in 2010/2011. Then the 5/7 year ARM's are due to peak around 2013.

Some areas will feel it way worse than others. But on a whole, dont expect the real estate market to fully recover until 2014.

And Stretch, you'll want more than 35k to invest if you're wanting to go into real estate.

[Kembal]

Just wait until the 2nd wave of defaults hit.

Alt+A loans are the next expected wave (for defaults) in 2010/2011. Then the 5/7 year ARM's are due to peak around 2013.

Some areas will feel it way worse than others. But on a whole, dont expect the real estate market to fully recover until 2014.

And Stretch, you'll want more than 35k to invest if you're wanting to go into real estate.

Damn. That late on the Alt-A default wave? I thought it would happen by the end of this year.

Ok, take what I said and push it out til 2012.

[Gan]

Damn. That late on the Alt-A default wave? I thought it would happen by the end of this year.

That seems to be the thought of the local industry experts here in Houston. I was at a breakfast last Friday that had one as a guest speaker. His presentation was sobering to say the least.

[NocturnalRob]

I have some $35k sitting around doing jack shit
pay off my credit card debt.

[ElanthianSiren]

Kranar, can you teach us how to short stuff?

It's hard to get shares right now. If you want to short over a long period of time, you can just buy puts (options for shorts). Works decently.

[Parkbandit]

You should invest in some Section 8 housing.


It's huge down here currently.

Pros: You don't have to worry about rent since the Government is doling it out like candy at Halloween.

Cons: Your property is going to get trashed. Badly.


I just bought another house on Sunday (Well actually Monday since they accepted the offer on that day) and agreed in principle to rent my current residence out to my neighbor, who has been renting for the past 6 years. I'm saving him $100 a month, I'm paying for landscaping and he gets an upgraded house. He's happy as shit because they are saving money and living in a better house. I'm happy as shit because I don't have to do any work to rent this place out and I'm still making the rent I want.

[Parkbandit]

And Stretch, you'll want more than 35k to invest if you're wanting to go into real estate.

Not true if you have good income and credit. 35K is plenty of money to buy a 300K house or 3 100K houses or 6 50k houses.

[NocturnalRob]

35K is plenty of money to buy a 300K house or 3 100K houses or 6 50k houses.
OR 12 25K HOUSES!!!

[Ignot]

If you want to short over a long period of time, you can just buy puts (options for shorts). Works decently.

I :love: options.

[AnticorRifling]

I'm so financially retarded I don't know what the fuck any of you are saying.... I just pay my bills.

[Ignot]

I just pay my bills.

You are smarter then some.

[NocturnalRob]

You are smarter than some.
point proven

[Ignot]

lol

[Daniel]

Don't worry guys, we're not in a recession.

[Suppa Hobbit Mage]

I'm so financially retarded I don't know what the fuck any of you are saying.... I just pay my bills.


Amen brother. I keep trying to find a woman who's financially intelligent who'll put me on an allowance and invest the rest. I know shit about my money, other than I make enough and suck at investing.

[BriarFox]

Markets rise, markets fall, people do stupid shit, people lose money, people do smart shit, people make money. Bernanke announced today (NYT story on it) that the recession may end this year, too.

[Kranar]

Bernanke announced today (NYT story on it) that the recession may end this year, too.

Hahahaha!

The same Bernanke who said just shortly before this collapse that we live in an era of stability and great moderation.

There is a great quote by Taleb on the absolute stupidity of the so called financial experts and the immense amount of risk they take...

A Turkey is fed for a 1000 days—every days confirms to its statistical department that the human race cares about its welfare "with increased statistical significance". On the 1001st day, the turkey has a surprise.

Take huge risk, make a little money here and there for a long... long time... until of course, on the 1001st day, this happens:

http://www.edge.org/3rd_culture/taleb08/images/image004.png

[Ignot]

I hate how Bernake speaks and he isn't getting any better at it.

[aesir]

No, the recession will not end this year. Bernanke is saying this because he wants to instill confidence in the markets, but most people know better.

The problem right now with the macroeconomy is that none of the fucking damn banks know exactly how much damage they accumulated and whos holding what exactly in the markets and I'm not talking about CDOs but just run of the mill folks holding risky mortgages.

The REAL problem is Bammy and friends (read as Obama administration)
are doing exactly the OPPOSITE of what should be done. He needs to let the homeowners FAIL and I mean hardcore I'm gonna get raped FAIL. Thats the only way he's going to let the smoke clear and so that everyone can figure out where exactly the FUCK everyone stands.

[Stanley Burrell]

I just think there should be a nationwide ban on these mortgage commercials.

[Wesley]

I just think there should be a nationwide ban on these mortgage commercials.

I think you should have to take and score well on a "basic personal economics" IQ test before anyone extends you credit.

[Stanley Burrell]

I think you should have to take and score well on a "basic personal economics" IQ test before anyone extends you credit.

While seated on a pterodactyl :thumbup:

[Wesley]

While seated on a pterodactyl :thumbup:

Negative. Most dinosaurs do not use credit at all.

Some are even made of money.

http://www.pjlighthouse.com/wp-content/uploads/2007/09/money-origami-dinosaur.jpg