i’ve just begun to read of some of the mortgage deals that were a part of the sub-prime problem in the US. The mis-selling looks pretty big, brokers operating a production line of ready-made documents, even further falsifying them without their client’s knowledge. One would think that many of punters would have a case against them, rather like they did in the UK with the pensions and utilities mis-sellings of the last decade. It’s that old economic imperative at work again. The brokers got all of the upside and none of the downside. Of course they were going to sell beyond all expectation. And, of course, they were going to over-sell. Bubbles burst. Look at this young day-trader’s blog:
DO you wait it out? Cut your losses like me? Or average in?
Lesson be learned…..you don’t want to make the same mistakes I did.
I got out of my long futures position when YM was down 300pts, it is now down 650pts and still going down and the market hasn’t even opened for US investors!!
I may look stupid for holding my position so long, but I look less stupid now, with the trade down 2x as much from where I sold it.
What do you do today?
Do you short Solars and Financials?
How about shorting NYX and the brokers? Who’s going to be left holding all these worthless stock certificates when the market tanks? JPM, GS, BAC, MS, C, LEH, NDAQ.
Remember BAC earnings tomorrow at the bell…..And never count out the surprise FED cut!
Spreads are going to be huge, and I predict YM to have 10-30pts swings every few seconds. The market is going down.
THIS IS A STOCK MARKET CRASH!!!
Everything looks bad right now. Inflation is going up (chinese rising prices and oil), and the Bank of England is supposed to adjust interest rates on an inflation target only - indicating interest rates go up, trade deficit is at an all-time high, the property market is about to plummet from a cliff. An economy fueled on equity liquidation and debt turns off both taps at once and wills the water level to rise, all the time aware that the plug is not a perfect fit.
As someone who’s been predicting a large crash for ages (and hence wins no kudos - heads have got to come up, right?), i still find myself as bemused as the next guy. Even people whose knowledge/experience/track-record one might respect seem intent on insisting that this one isn’t going to be so hard, that we’ve learned some things, or that other factors are in play. It seems to me to boil down to whether the new economies of China and India, together with the oil states, provide sufficient demand to keep the world economy afloat, or whether they just end picking over the remains of the western economies at their leisure. They might just amount to the same thing.