i called it first! GFC Mk2.

bluestorm said:
Greece was first. I think Portugal or Ireland will be next, then Spain and Italy. The problem is that as the dominos fall, it makes things harder for other European contries (as they all contribute to rescue packages).
.
Click to expand...

But no dominos will be allowed to fall.

As soon as Portugal gets in trouble the ECB will step in and will buy their bonds.
IMO the fire will be put out more quickly than people think.
Don't forget that the EU and the US are not happy with the credit rating agencies so they'll do something about it.
Tim Geithner, US Treasury secretary, and Hank Paulson, his predecessor, joined the attack of the ratings agencies, telling a US inquiry into the causes of the financial crisis that ratings agencies were part of the problem and that their influence should be clipped. They were a “dangerous crutch” for markets, said Mr Paulson.

“I don’t want the ratings agencies to be held up as the font of all truth and have the ratings be part of our securities laws,” he told the inquiry.
Click to expand...

http://www.ft.com/cms/s/0/a47745ec-5959-11df-99ba-00144feab49a.html
 
rambada said:
So lots of grim scenarios, but where are the money making opportunities?

But where are the opportunities people?
Click to expand...

Look for shares in companies that have minimal exposure to all this.

Then do you own research as to whether any declines in the shares represent good opportunites (baby getting swept out with the bathwater or whater the saying is).

I LOVE periods of fear, why because the efficiency of the market to price things decreases.

I know some people say dont move there is too much uncertainty.
But its EXACTLY at such times of uncertainty that the greatest long term returns are generated.

Let me also be clear about one thing, under no circumstances do i suggest buying something just because it has had a price decline.

Failure to do adequate research leaves 'dollar averagers' open to value traps during times like these (hey it was $20 last week, its $15 this week thus MUST BE GOOD VALUE, if someone was willing to pay $20 last week, this type of thinking is a schmucks game and cannon fodder for the professionals).
 
BV said:
As soon as Portugal gets in trouble the ECB will step in and will buy their bonds.
IMO the fire will be put out more quickly than people think.
Don't forget that the EU and the US are not happy with the credit rating agencies so they'll do something about it.
Click to expand...

Haha, I love it BV. Funny how Geithner and Paulson didn't have a problem with the ratings agencies all the time when they were rating junk as top class investment (under pressure from these guys, and the investment banks no doubt). Now that the ratings agencies are starting to do their job (Greece as junks, etc), Geithner and Paulson suddenly see a problem.
The ECB can only keep bailingout countries for so long. Eventually something will give.
 
Fat Fingers?

How's the fat fingers theory going?

A Citigroup trader hit the B for Billion button in a sell order instead of the M for Million (crazy system if true)

I wonder what the fundamental traders make of this when fear takes over and the actual true worth of a company takes a back seat to the madness of markets?

I woke to see the DJI down 3.2% Friday morning then another 1.3% Saturday

Things are getting interesting on the world stage

Thursday, the European Central Bank kept its benchmark interest rate unchanged at 1%.
Last week, the US Federal Reserve stood pat, leaving the Fed Funds rate at 0% to 0.25%.
Last month, Russia slashed interest rates, setting a new historic low at 8%.
Last month, Japan kept its interest rates at 0.1%.
Click to expand...
 

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redwing said:
How's the fat fingers theory going?

A Citigroup trader hit the B for Billion button in a sell order instead of the M for Million (crazy system if true)
Click to expand...

IF it happened it was incidental. These things happen and can be taken care of in the normal course of business.

We are told that 60% of all trades are High Frequency Trades (Quants) and that it is good for the market by providing liquidity. Well for one minute the Market Makers weren't where they should have been and the market failed. To admit this would be to welcome change and regulation so they don't admit it. As it is they have such fast computers that they can "front run" orders and pinch pennies from millions of trades a day. Why would they want someone looking at them?

The market is super nervous. That's the truth. :D
 
Fat Finger theory doesn't explain why some shares traded at 0.01 in that period. In fact, the NASDAQ has decided to cancel ALL of the trades that traded at prices >60% from the 2:40pm price:

http://money.cnn.com/2010/05/07/markets/explaining_wall_street_turmoil/index.htm

Trader error does happen, as is the often cited Japanese case a few years ago where volume and price were accidentally switched. Japanese shares often trade at prices that read like volumes.

Another theory sounds more plausable in terms of explaining those 1 cent trades. As the market circuit breakers were triggered, trading in those shares stopped, which is supposed to allow the market to calm down. Some automatic trading systems that tried to sell shares weren't programmed for this, so the systems assumed the shares were trading at zero, adding 1c as a margin for brokerage. That would explain why some trades went through at 1c but when the shares resumed trading, everything snapped back.
 
BV said:
Hi Willair

Yes I know....:eek:
That's what the speculators believe as well, but it's hard to know what the Germans will do.

Last night Merkel was warning the markets saying that they will be prepared to let a problem child leave the Euro. The Greeks lost public opinion support in Germany because in the early stages of the crisis when they were critisised of their high spending and relaxed attitude to work some Greek people & media called the Germans Nazi's and asked for compensation for war attrocities during WW2.

Germany lost the war but the Germans managed to take over Europe without guns so they won't let this remarkable achievement go to waste.
The Greeks are only a tiny % of the Eurozone so I wouldn't be surprised if Merkel was willing to cut them off if she had to, in order to win German public opinion and at the same time to stop speculators and to force the rest of the Eurozone team stay focused.

Yes, German & French banks will lose money but Eurozone countries could lose even more due to speculation and higher interest rates.
On the other hand, turbulance and a lower Euro means cheaper European products ( and property :D ) and more jobs for everyone so maybe that's what they need atm. IMO they should stop speculators by letting the ECB buy bonds of any Eurozone member regardless of their credit rating and they should get on with the job of reducing debt.
Click to expand...
BV,,
I still have a few family in Germany,they tell me a different story on what may happen,not that it will worry Australian in the big scale of things the German mindset is very different to anyone else in the Europe
i know because everytime i go back they ask the same question to me each time, at the Airport--why did you give up your German passport to become a Australian..willair..
 
willair said:
BV,,
I still have a few family in Germany,they tell me a different story on what may happen, not that it will worry Australian in the big scale of things the German mindset is very different to anyone else in the Europe.
Click to expand...

So what are they saying?
That they'll be willing to leave the Eurozone?

I know that the Germans have a different mindset and in general they don't think of themselves as Europeans but their government knows better.
They are in control of a big ship and it's in their interest to be there to steer it in the direction they want it to go so they won't let go easily.

This crisis is temporary, the Euro IMO has been very successful and if they integrated further and put in some extra mechanisms to protect their interests from outsiders it could even become the world currency.
 
Probably the same economists who said that everything was ok and greece was not a problem a few months ago. The media is about selling stories. Look at the property stories. One day rises, the next day falls. One day doom and gloom and the next rosy skies. I've given up reading anything that has an opinion in the news. Only read for stories such as the volcano which we all know has happened. Anything else reported in the media is pure speculation and hardly worth reading. Thank God i've never made decisions based on the media as I would be a very poor person. Probably why the majority are poor because they listen to the media.
 
bluestorm said:
I find it amusing that the uneducated masses who voted the socialist governments in (in Greece, etc), and here in Aust (Rudd), are the ones who are going to feel the pain the most.
Click to expand...

Are you suggesting the whole issue started in Greece when PASOK govt voted in October 2009 ? How is it solely this government's fault ?

Why would people's pain amuse you ?
 
wow - 3 pages already.

John, my stance changed when i saw the huge problem that arises very quickly with funds already freezing between france, uk and germany. frozen funds equals fear, and while it could be an absolute storm in a teacup, it'll take the good part of a year for everyone to shut up and realise what it really is.

when the banks stop lending o each other, we get govt "stimulus" as in intermediate. govt don't generate their own cash anymore, they borrow it. only a fool would think that germany hasn't noticed and my opinion (as i see has alrady been raised) is that germany *could* bail from the eurozone if they're asked to stump up more cash for another round of PIIGS trough-feeding.

they may not, or have any intention to, but just he NOTION of the CONCEPT could start a HUGE downward spiral.
 
coastymike said:
This chart shows that Greece is only the beginning of the problems. Look at the other PIGS
Click to expand...

Mike
Debt is no problem, here is how it works:

It's a slow day in a dusty little Australian town. The sun is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit.

On this particular day a rich tourist from down south is driving through town, stops at the local motel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs in order to pick one to spend the night.

He gives him keys to a few rooms and as soon as the man walks upstairs, the owner grabs the $100 bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to repay his debt to the pig farmer.

The pig farmer takes the $100 and heads off to pay his bill at the supplier of feed and fuel.

The guy at the Farmer's Co-op takes the $100 and runs to pay his drinks bill at the local pub.

The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit.

The hooker rushes to the motel and pays off her room bill to the motel owner with the $100 .

The motel proprietor then places the $100 back on the counter so the rich traveller will not suspect anything.

At that moment the traveller comes down the stairs, picks up the $100 bill, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything.
However, the whole town is now out of debt and looking to the future with a lot more optimism.
 
BV said:
Mike
Debt is no problem, here is how it works:

It's a slow day in a dusty little Australian town. The sun is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit.

On this particular day a rich tourist from down south is driving through town, stops at the local motel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs in order to pick one to spend the night.

He gives him keys to a few rooms and as soon as the man walks upstairs, the owner grabs the $100 bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to repay his debt to the pig farmer.

The pig farmer takes the $100 and heads off to pay his bill at the supplier of feed and fuel.

The guy at the Farmer's Co-op takes the $100 and runs to pay his drinks bill at the local pub.

The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit.

The hooker rushes to the motel and pays off her room bill to the motel owner with the $100 .

The motel proprietor then places the $100 back on the counter so the rich traveller will not suspect anything.

At that moment the traveller comes down the stairs, picks up the $100 bill, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything.
However, the whole town is now out of debt and looking to the future with a lot more optimism.
Click to expand...

I know the answer answer to the riddle! Thats because no one in the town had a net debt in the first place. :D LOL

Anyway, EU - 'the wolfpack' just approved 500 billion Euro as 'stabilization fund'. Would this be enough? Or they are trying to putting out fire by throwing more money in - i.e. leading to a larger fire.

Warrenkh.2010
 
Last edited:
stabilisation fund = future potential stimulus fund = cash reserve = what australia used to have 20bil of.

some commie pollie will want to distribute it for no real reason. and in the EU - they're all socialists.
 
BV said:
No one produced anything. No one earned anything.
However, the whole town is now out of debt and looking to the future with a lot more optimism.
Click to expand...

Except providers of credit attach time value to money, and accordingly charge interest.....which means debtors are out of pocket moreso than if they used cash.....hence how credit based consumption causes inflation.
 
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