US - Subprime

Re: Subprime

Postby Chiron » Wed Nov 19, 2008 10:03 am

I believe for equity market to start the turnaround, the key will be when housing prices will reach botton and stabilise there, not so much of gg up.

Yesterday in his speech, BAC Lewis say price will only stablise after mid 2009.
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Re: Subprime

Postby kennynah » Wed Nov 19, 2008 10:12 am

i concur with your views chiron...

my opinion....a bottomed out housing prices will indeed be a catalyst and setup for equities to bottom out as well.... this should be the precursor of better times to come...but to be sure, housing assets must begin to climb.... a stablisation is merely to prevent further slide to the indexes... this is bcos as long as housing assets do not increase in value, the assets backed by these wasted assets cannot also increase in value and thus banks and entities holding onto them cannot improve their balance sheet assets... this is rather fundamental logic...
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Re: Subprime

Postby Chiron » Wed Nov 19, 2008 10:39 am

Hi K, how are you?

Me just back from my holiday in US. Main street has been affected quite badly, from my obseravtion.

Current market sibei pai tan. I have been on the sideline sine late Oct, after loading some BAC.
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Re: Subprime

Postby millionairemind » Wed Nov 19, 2008 10:55 am

Hello Chiron Bro,

Hope you enjoyed your US trip... where did you go and how long did you spend at each location? F&E?

Current mkt don't lose money oredi happy...

I was flipping thro' The Edge last week and looking at all the unit trusts.. Most of them have lost 40-60%... If you don't lose any money this year, you already ranked No. 1 :)

Huat ar,
mm
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Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
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Re: Subprime

Postby kennynah » Wed Nov 19, 2008 11:05 am

Chiron wrote:Hi K, how are you?

Me just back from my holiday in US. Main street has been affected quite badly, from my obseravtion.

Current market sibei pai tan. I have been on the sideline sine late Oct, after loading some BAC.


thanks chiron for asking...i am ok... hope u r well.... welcome back ...trust u had a great holiday
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Re: Subprime

Postby Chiron » Wed Nov 19, 2008 11:28 am

MM, K, thanxs. Me went to NYC, Toronto, SF, LA and LV, all F&E.

LV quite badly hit, although still hv crowds, but not as crowded as what I heard from my friends when times were good. Esp their casinos, alot of empty slots and tables. Disneyland in LA also less than 50% attendance rate for the day I went.

Yeah this year dun lose money means fantastic performance. Actually if lose within single % digit, also consider excellent already.
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Re: Subprime

Postby kennynah » Thu Nov 20, 2008 2:20 am

so....never kana their jackpot ah ?
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Re: Subprime

Postby Chiron » Thu Nov 20, 2008 8:20 am

No leh, cos me nv make any bets at all during my stay there haha me not into casino stuff
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Re: Subprime

Postby iam802 » Mon Nov 24, 2008 10:27 am

Bernanke Tells New Yorker He Underestimated Housing Meltdown

http://www.bloomberg.com/apps/news?pid= ... refer=home

Nov. 23 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said he underestimated the impact subprime mortgages would have on the economy, according to an interview to appear in the New Yorker magazine’s Dec. 1 edition.

“I and others were mistaken early on in saying that the subprime crisis would be contained,” Bernanke said. “The causal relationship between the housing problem and the broad financial system was very complex and difficult to predict.”

Widespread failures of U.S. subprime mortgages, home loans to borrowers with poor credit records, started in 2007, touching off a financial crisis that has spread to other sectors of the world economy.

The article, entitled “Anatomy of a Meltdown,” said Bernanke and Treasury Secretary Henry Paulson tried what Bernanke and his Fed colleagues called a “finger-in-the-dike” strategy to keep the financial sector operating long enough so that it could repair itself. As recently as this Sept. 1, the article said, Bernanke thought that strategy would work.




So, from this article, it is very clear that they observed for too long. And when they finally figured out, it is no longer a ripple. The crisis that is supposed to be contained has become a Tsunami crisis!
1. Always wait for the setup. NO SETUP; NO TRADE

2. The trend will END but I don't know WHEN.

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Re: Subprime

Postby kennynah » Mon Nov 24, 2008 12:33 pm

subprime borrowings defaults get stronger...is not necessary a bad sign.... becos, eventually, they will end... it is like knifing someone....a stroke at a time until eventually the artery vein gets sliced and the person bleeds to death...but this is a slow and painful process...

BUT, a decisive amputation to the arm, without any supressing knot to stop the bleeding, is a faster and surer way of severing that useless hand...

hence, better to simply allow those who really over leveraged on their borrowings to either default or go bankrupt...then to use up too much money to bail them out... mistakes must be corrected...not pacified...

the politicians can say all they want about helping these americans...but these are politicians words... and we know, how much they can be entrusted.

you will realise that the economic stimulus package was already dished out..some usd1.6k per household some months ago...a program by treasury dept to establish the "helpline" for home owners in trouble, including directions for fnm/fre to mete out affordable mortgage loan rates for new home buyers... and then.....silence after that...

the govt's next efforts then refocused on banks' liquidity with the 700bil tarp program....

subprime issue will die a naturally death over time...this is the way, i see it evolving in the last 10 months...
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