Black Friday?

[solve_et_coagula]

Black Friday?

Could be an interesting day on Wall street today.

Nikkei down over -850 pts (5%)

Hang Sang Down over -650 pts (3%)

Strait Times -150 pts (5%)

[Anders Lindman]

Or a Pitch-Black Monday? :eek:

I wrote about last monday as a potential black monday. That was not entirely correct. But the stock markets certainly look shaky at the moment.

[lightbeing]

Black Friday?

Could be an interesting day on Wall street today.

Nikkei down over -850 pts (5%)

Hang Sang Down over -650 pts (3%)

Strait Times -150 pts (5%)

When I first read that, I thought, what the fook are you on about!;):D Oh yeah, the stock market, it's all just numbers on a screen, nothing else!.......;)

[cheesedanish]

Rand plunges, hits R7.60/$

Aug 17 2007 09:32 AM



Finance24 / Currencies
Johannesburg - South Africa's rand weakened sharply against the dollar on Friday, just off a 9½-month low, as volatility prevailed on international markets, and traders said on Friday there was probably no respite for the unit on the horizon.


The local currency was trading at R7.58/US$ at 09:10, about 1.9% weaker than its New York close. It reached R7.60/$ overnight, its weakest level since early November last year.

The rand staged a mild recovery in New York, closing at R7.44/$. After the Asian markets opened, weaker stocks prompted investors to go back to the yen in earnest, further unwinding their carry trade positions.


It was also near a multi-year low against the euro, the currency of its main trading partner. It was last at R10.14/€ after hitting R10.1943 late on Thursday, its weakest level in nearly five years.


http://www.fin24.co.za/articles/default/display_article.aspx?ArticleId=1518-1791_2166500

[solve_et_coagula]

Bloody and Bloodier

The subprime-lending crisis is worse than you think, and could crush financial and real-estate markets for years.
By James J. Cramer

(Photo: Illustration by Brett Ryder)
You’re losing money right now. This very minute. You’re losing money if you own an apartment. You’re losing money if you own a country home. You’re losing money if you own a stock or bond mutual fund. You’re losing money if you have a pension plan. You’re probably losing money here or there, you’re probably losing money everywhere (except maybe from your savings account and wallet). But this is no Dr. Seuss story. It’s more of a John Steinbeck tale, and we are the victims, a new generation of Tom Joads, and it’s the damn bankermen who broke us. No, there won’t be a police officer to investigate, and the government, at least this federal government, won’t save us.

Our tale of woe starts not in New York but in flashy places like Las Vegas and South Beach and faraway onetime Okie haunts like Riverside, San Bernardino, and Ontario, California. In these towns, and dozens more like them, housing companies erected colossal communities of homes. Eager homebuyers and speculators fought each other for these properties, armed with cheap financing, courtesy of Alan Greenspan, who wanted to boost an economy reeling from 9/11 and create a legacy of homeownership for all, including those who could not document steady income or, for that matter, citizenship.

We think of him as Saint Alan now, but in a few years he will be known as the reckless Fed chairman who encouraged the creation and use of exotic mortgages that required you to put down very little money, odd creations like the “2 and 28,” an adjustable mortgage with low interest payments the first two years that explode into gargantuan fees for the next 28. Don’t have the money to pay for the 2 before the 28? Go “piggybacking”: Take out a home-equity loan against your new house to meet those minimal payments.

Where did the money come from? Banks lent it, mortgage brokers lent it, and even home builders themselves got into the act. The housing markets were so hot the lenders barely had time to check if their buyers were deadbeats, cheats, speculators, or actual honest-to-Betsy hardworking people who wanted nothing more than what Tom Joad wanted 70 years ago. Oh, and the buyers didn’t have time to check out the terms, either; the value of the houses was going up too fast. Gotta close now! Nor did the regulators tap the brakes—whoops, there were no regulators. If something went wrong, who cares? The buyers could always sell their ever-appreciating home to the next guy on the reservation list or the ten after him. The builders, brokers, and bankers then shipped these mortgages east to the big Wall Street firms, which bundled them together and merchandised them as high-yielding bonds often backed up by nothing more than the full faith and credit of, well, no one.

Over and over, Greenspan hailed these fabulous financial breakthroughs that gave everyone a chance at the American Dream (or multiple dreams, in the case of speculators who took down homes and flipped them). And why not? Don’t homes always increase in value? Won’t there always be willing buyers armed with ARMs?

Except that wasn’t how it went down. The same guy who prescribed the mortgage elixir for all Americans then laced it with seventeen straight interest-rate increases, increases that brought rates to levels so high that legions of people who bought a home with a teaser rate couldn’t afford the payments. Between 2004 and 2006, just as interest rates started spiking and homes kept being churned out in these saturated areas, 14 million families purchased houses, many taking advantage of teasers and piggybacks. Given that the average home went for about $250,000, that’s hundreds of billions in loans that cost a lot more per month than when they were taken. Now these people are stuck. They can’t refinance because the rates are too high, and they can’t sell their homes to repay their mortgage, either. In every area of this country—and in particular, in the once-hot markets like the ones I mentioned earlier—there are just too many other homes for sale and too many new homes still being pumped out.

What do the woes of these folks have to do with you? Can a housing fire sale in Phoenix or Fort Myers really affect your Hamptons beach house or your newly purchased Upper West Side classic six? Well, yes, and in even bigger ways than you might think. That’s because the people who ultimately bought the bonds backed by what now look to be billions in bogus mortgages are those who run most of the big pension-, hedge-, and stock-and-bond-market mutual funds in this country. These suckers bought such bonds because bonds backed by mortgage-payment streams paid a tiny bit more than United States Treasuries, a comparable low-risk, if low-return, vehicle, and were supposed to have very little or no risk themselves. Some managers, however, borrowed huge sums to buy tons of these mortgages to turbocharge their results. And the most aggressive managers bought billions in mortgages given to less creditworthy individuals, the so-called subprime loans you keep hearing about.

Continue to read:
http://nymag.com/news/businessfinance/bottomline/35813/

[Anders Lindman]

The only thing that keeps the stock markets floating is the overly excessive amount of day trading going on. If the day traders suddenly wouldn't be backed up and followed by long-term traders, the stock markets would directly sink like a rock in the ocean.