By the way, isn’t it amazing how soiled…how filthy dirty is the laundry of the bankers and brokers? Are they incontinent?

My guess is the Fed is prepared to ACT either preemptorily or sometime later in the week as the bank and brokerage casualities increase. Let’s face it. If the Fed is going to ACT at all before its normal meeting, it’s most likely to be this week in which the piggy banks are cracked open.

An interesting observation from Berkshire Hathaway’s 2005 report:

“A business in which huge amounts of compensation flow from assumed numbers is obviously fraught with danger. When two traders execute a transaction that has several, sometimes esoteric, variables and a far-off settlement date, their respective firms must subsequently value these contracts whenever they calculate their earnings. A given contract may be valued at one price by Firm A and at another by Firm B. You can bet that the valuation differences – and I’m personally familiar with several that were huge – tend to be tilted in a direction favoring higher earnings at each firm. It’s a strange world in which two parties can carry out a paper transaction that each can promptly report as profitable.”

With over $2 trillion as the estimated derivitives exposure, how much will the losses be and who will be the losers?

Everyone in the whole world cannot be on the right side of these trades – where are the losses?

No wonder they went under

The consumer is very much human and can sometimes…no….many times… over exaggerate his or her state of wellness and many times his or her state of sickness… (Cause of the housing bubble, rampant spending, and debt || The coming recession). That being said, I have read that there is a feeling as though the ‘hype’ regarding the coming recession is largely irrational fear…There are many data points that show that it is not due in large part to ‘irrational fear’… But lets go with that thinking… Given the evidence that people often over exaggerate their state of ‘wellness’, the corollary which is often demonstrated is that they will often do so in times of ‘sickness’. The same way people were cheering on the housing boom they are fleeing and flipping out in equal number and measure…For the Fed, if they were doing their jobs, the question and focus would be to find out how these irrational states and thinking are induced, as they have a great effect on consumption and the economy, and how to promote a better state and mode of operation…. But this wouldn’t be good for business I guess…

The evidence is very clear as to who and what is causing these unstable states amongst the populous and it is sad that they got soo greedy and carried away that they put their cash cow in the emergency ward and put the whole ‘system’ at risk. Now they come running in w/ an adrenaline shot as if that is going to make things better in the long run….

Those very far and disconnected from the middle and lower rungs of a society are often out of skew in terms of their measure of ‘wellness’ and ‘sickness’ of this group. So, I subscribe to no opinions from this ‘group’ unless it is backed by hard data. Also, I don’t subscribe to the opinions of this ‘group’ due to the fact that they have consistently been wrong about things in terms of down-turns time and time again. After all, it pays for them to be wrong ;) … $$$ & Self-serving bias.

http://www.reuters.com/article/ousiv/idUSN1336265420080113?pageNumber=2&virtualBrandChannel=10003

I guess there is a silver lining in everything -> From the article : “Yet retailers with exposure to emerging markets such as China and India may be able to offset the weakness in the United States, according to a report by Deloitte Research.” or maybe not…..

It’s hilarious because many of these seasoned executives don’t understand the culture of these regions nor have they changed the culture enough, in numbers, in these regions to spawn the type of consumption that is necessary to ‘prop’ things up.

The logic and the thinking behind ‘everything will be alright’ and that this is only a U.S problem in scope are baseless and at some points irrational…. The logic is so self-serving that it is borderline ridiculous….

As a whole… Looking at the big picture.. I see an economy and a society (the U.S) that has been in large part built and centered around mindless consumption and credit for way too long. Combine this with ‘capitalism’ and you have a system that will trend towards the mindless promotion of ‘consumption’ and spending beyond one’s means (you always can achieve more). Money being the mechanism by which this system functions, you will have people seeking ‘mindless’ and an ‘anything goes’ means to seek it (money) out… Anyone felt uneasy about the last 10 years as this system has basically ran a muck in these areas?

During down times, people often reflect on ‘what went wrong’ and reflect on their decisions…. Sadly, most Americans have their head in the dirt and they aren’t going to see this ‘down turn’ until it smacks them in the face…
If a widespread societal aspiration of : ‘mindless consumption’ and ‘debt+credit’ caused this mess and the down-turn hits people hard, expect people to come out of the ‘R’ (emergency ward) with a very different ‘outlook’. If everyone’s ‘out’ is the global (non-U.S) growth then where do you think the U.S is going to be? So what then is the strategy, suck one society dry and move to the next?

And no… There is no bailout for this one… You better believe the fed is having a tough time right now trying to decide what to do… The curtains have been pulled away and everyone sees what is going on behind the scenes…. Cut rates and face an equal huge decline in dollar value and an equal rise in inflation… The credit engine is dead….

It’s time to get healthy and do the right thing. Banks and creditors aren’t really looking to do the right thing and are on to their tricks yet again… They are playing around the world begging for money in exchange for a ‘cut’ (diluting shares), sell-off (get the fed and thus me and you to finance their recovery through the tax breaks and #’s game they play..). This is not the right or healthy thing to do but I guess it looks real good on paper…. Time will tell :)

So, measuring things in terms of health… What these banks are doing is not healthy….. You wouldn’t cheer on your neighbor who is selling his soul and your property value to make his/her monthly financial obligations so why do you do this for these corporations?

You wouldn’t be disillusioned that someone who pumps themselves more and more with steroids before a game is going to be healthy in the long term so why do you think employment #’s are any different?

I see the numbers both here and there but the extrapolation for the argument against a coming down turn just seem a bit off….

And yes…Some will do well and prosper during this time.. But only those who were prepared and played it ‘healthy’ from the start….

Those who didn’t will ‘fail’ and if the fed/govt. tries to prop these clowns up they better be prepared for the fallout that will come because of it ..

In either case, it is apparent that those companies that are ‘healthy’ are in small supply with those being ‘sick’ in large numbers. It is also apparent that the fed and international investors will do whatever they have to in order to keep the party going… So, it should come to no surprise that when those ‘sick’ ones leave the party and miraculously end up home the next day that you wakeup to a foul smell of puke in your family car in the morning followed by “I’m sorry dear… But someone had to take them home right?” ;)

It’s time for some stocks picks for the week !!!

The way I see it in Wikipedia our current situation, mortgages used to finance purchases of other items, is much closer to what happened during The Great Depression than in the Savings and Loan where many bad mortgages were issued when interest rates were very high.