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Growing Evidence That The Upturn Is Upon Us

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Growing Evidence That The Upturn Is Upon Us

Old 30th Sep 2008, 04:41
  #661 (permalink)  
 
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$1trn wiped of the value of US stock markets yesterday alone.... hate those kind of stats but its puts the $700bn in context.... a lot of that has come off the value of US pension funds (401Ks) belonging to the "man on the street". It won't be long before they credit card limits are cut and many lose their jobs.

This comment sums up why we got the no vote... it is from Republican Congressman Paul Ryan....

"We're all worried about losing our jobs," Rep. Paul Ryan, R-Wis., declared in an impassioned speech in support of the bill before the vote. "Most of us say, 'I want this thing to pass, but I want you to vote for itónot me.' "

Well thats the sort of backbone that the great nation of the US of A is built upon... too afraid to do what you know is right because you are worried about your own skin.

This seems an appropriate quote... from a US politician with some backbone... little would appear has changed over the years....

"The credit and fate of the nation seem to hang on the desperate throws and plunges of gambling scoundrels." Thomas Jefferson 1790
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Old 30th Sep 2008, 07:32
  #662 (permalink)  
 
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It's WWII all over gain, they wont do anything until they are shocked into realising it's they that are being effected, this time though they wont be able to come in and claim all the glory.
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Old 30th Sep 2008, 08:08
  #663 (permalink)  
 
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For me the $700bn package is analoguous to topping up the oil on an engine thats on fire. You can oil it as much as you want but it's not going to make it run any better. In fact it may just burn into nothing before it even makes it into the engine...

It will be interesting to see how the government treats B&B. I know someone who had a Northern Rock mortgage and lost his job shortly after the takeover. Jobs in his sector are rarer than the proverbial rocking horse droppings at the moment so he's working as a postman, a pizza delivery boy and a barman. He wouldn't need three jobs if the Government hadn't jacked up NR's variable mortgage rate to try and force people to move their mortgages elsewhere. The idea is all well and good in principle but it's not particularly realistic in this climate. Banks aren't exactly falling over themselves to hand out mortgages at the moment.

For what it's worth, I don't think the $700bn bill passing will make much difference. It might starve off the breakdown for a couple of months but when you consider that the Treasury added $650bn of liquidity to the market yesterday and it made next to no difference, what chance does this initial $250bn tranche have?

Last thing, when the shorting rule ends on Thursday, there will be more pressure on Congress to pass the bill. Shorting will have an amplifying effect on the existing instability and could really make things "interesting". I just wish I had two ha'pennys to rub together as it will soon be a very good time to buy into the equity market...
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Old 30th Sep 2008, 08:13
  #664 (permalink)  
 
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EGHH I think you are right the deleveraging of bank and household balance sheets has to take place. The $700bn is not mean to prevent this just try and let it happen in an orderly fashion to limit the fall out. That is sound logic as far as I am concerned.

European markets surprisingly rational and calm this morning. FTSEUROFIRST 300 just turned slightly positive.... would have got very good odds on that last night. US futures indicating slight recovery as well.
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Old 30th Sep 2008, 08:25
  #665 (permalink)  
 
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Sign that the airlines are worried?

Ok, this is something I have never seen in 10yrs of paid for flying (including post 9/11)...

"British Airways would like to offer XXX travellers a oneway upgrade from Club World to First
for travel from Hong Kong to London between 01 October and 31 December 2008 in conjunction with use
of your corporate fares.

Your travellers will be able to book your discounted fares in J/C/D/R class, and book a confirmed
upgrade to First on one leg of the journey in either direction."

And bearing in mind the rate at which banks are disappearing, this will have a big knock effect in terms of business class fares. Flying from HKG to HRW, Virgin is the cheapest for my company, but thought this was a rather stark reminder just how pain the big carriers will have to endure for the next few yrs.

However I flew back last week & the cabin was packed, so what do i know....
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Old 30th Sep 2008, 08:26
  #666 (permalink)  
 
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Warren Buffet seems to think the bail out is the right thing to do and i'd imagine he knows a thing or two.

He seems to think that TARP is a good deal for the government and therefore the taxpayer and he seems to think that the package will go through in one form or another.
CNBC INTERVIEW TRANSCRIPT & VIDEO, Part 1: Warren Buffett Explains His $5B Goldman Investment - Warren Buffett Watch - CNBC.com
As i've said before I also don't think the bail out is going to solve the problems that we are facing, it's more handing the markets a silk parachute rather than a concrete one.
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Old 30th Sep 2008, 08:37
  #667 (permalink)  
 
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Originally Posted by ChrisLKKB
For those who think the $700B is a bad idea...

(excerpts from The Bailout: Myths, Half-Truths, and Inconsistencies ).......etc.
Some of the biggest myths floating around is that its all to save the markets. That isn't strictly true, its more about saving the monetary system, that is why the stakes are so high. You could arguably say that the markets are the monetary system but that is only partially true. The markets are the visible elements of the monetary system and they are responding to parts of the system that are largely invisible but are the backbone of every financial transaction that takes place. At the heart of all of this is trust, and that is what is in short supply. Banks do not trust each other, and with good reason. We see an ever increasing number of banks fail, and now banks that have rescued other banks fail, the monetary system slowly, but surely breaks down. Would I want someone to pay of a debt with me with a fistful of derivatives? NO. Would I want them to pay cash? that's better. What I really want, is my debt to be settled in gold or some other commodity. I have lost confidence in money, that's what's going on right now. Oil prices and other commodities will see saw in apparent disorder against world demand because they are seen as a refuge protected from some of the current dangers. We have already seen this with oil prices. $120 down to $90 a barrel, all in a heart beat. Did the world demand for oil change that much? No.

No politician ever explains any of this, probably because they don't understand it themselves, or they think we are too dumb to understand. What the feds are trying to do is restore confidence, or trust, back into the system. They want to do that by taking out the bits that scare the money men.

WWW said, (I think) that $700 billion would not be enough and the bailout should not go ahead. I feel he is partially correct. $700 billion is a fraction of the bad debt (btw we are not talking ALL debt, just the rancid bits). To sanitize the full extent, $5 trillion? The feds feel that the lower $700 figure is enough to restore enough confidence and get the system to sort the rest under its own steam. I feel they are right to try this, it may work, although its effectiveness diminishes as the delays continue.
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Old 30th Sep 2008, 08:42
  #668 (permalink)  
 
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Originally Posted by ChrisLKKB
....handing the markets a silk parachute rather than a concrete one.
Cotton maybe?
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Old 30th Sep 2008, 08:51
  #669 (permalink)  
 
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It sounds like the moths will have chewed great holes in the cotton by the time it deploys

John Authers at the FT has pointed out in his 'Short View' video diary that because of congress trying to protect $700bn of tax payers money it has already cost them $1.1tr yesterday, alone
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Old 30th Sep 2008, 08:51
  #670 (permalink)  
 
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daviojk.... that one-way upgrade is a scheme they regularly use for business travellers to the US... and very nice it is too. Not sure if it has been use on HK routes before.
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Old 30th Sep 2008, 09:09
  #671 (permalink)  
 
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ChrisLKKB

Because Congress voted no, they also show a damaging lack of confidence of their own system.
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Old 30th Sep 2008, 09:27
  #672 (permalink)  
 
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How many genuinely lack confidence though and how many were voting to save their jobs ? There have been several quotes thrown up already where it is simply the latter.

Some think by voting against the bill it will punish the 'fat cat's and that's what the voters want... I think this sums the reality up though Stop Playing Politics With Our Futures - 30/09/2008

But at least the Wall Street executives will pay the price for their excesses, except many of them are already multi-millionaires, and that money canít be taken away from them. Still, at least they wonít be able to earn more millions, and their multi-million dollar stock option packages will be worth only a few million now.
Phew. Thanks Congress.
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Old 30th Sep 2008, 10:14
  #673 (permalink)  
 
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many were voting to save their jobs
Hopefully, the Americans will see the self interest element and they will loose their jobs anyway. Some thing tells me that I'm dreaming.

As for punishing the fat cats, I wonder how that works. Destroying their own investments and pensions more like.
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Old 30th Sep 2008, 10:34
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Bizarre and worrying times indeed, and most interstingly the FTSE is everso slightly up at the moment but the December Index futures are still about 40 clicks down.

The dow is currently being priced at about +80 points on opening and I wonder whether the majority of the fair weather investors have jumped ship now and we're left with the more serious funds only.

Still I definietely think that the next two weeks are gonna be real make or break ones and if it ends up being break it will be the likes of nothing else, the collapse of banking infrastructure in the western world aka capitalism would have the hugest of impacts.... Funnily 15 years ago I would have found all of this extremely exciting but now with 2 mortgages, a 9yr old, a pregnant wife and working as a contractor it all seems extremely foreboding...... Ho hum, better look at pausing my PPL, stocking up on tinned food and maybe find a place where money isn't that important... any one know where they still use sea shells as currency???
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Old 30th Sep 2008, 10:52
  #675 (permalink)  
 
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Originally Posted by hot_stepper
....any one know where they still use sea shells as currency???
Not quite, but I swapped 8 weeks grazing for 40 head of cattle for a ton of wheat. I get my grass topped for 30 doz eggs, I swap 100 sq meters of my barn storage for 6 months for 200 hens and Gordon McGoon has to go and whistle.
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Old 30th Sep 2008, 11:11
  #676 (permalink)  
 
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Angel

At least its shut them about bloody Global Warming.
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Old 30th Sep 2008, 11:13
  #677 (permalink)  
 
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get that wheat malted an I can turn it into beer
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Old 30th Sep 2008, 11:20
  #678 (permalink)  
 
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I haven't mentioned the two ton of barley that I got from swapping one tup and three gimmers. That is being malted right now, and I have 50 gallon of beer fermenting right now.
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Old 30th Sep 2008, 11:37
  #679 (permalink)  
 
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That's a nice chunk of tax money legaly kept from away Gordons greedy little mitts.

(btw gallons or litres?)
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Old 30th Sep 2008, 12:24
  #680 (permalink)  
 
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The weather isn't so good today!!!
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