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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (15319)	3/13/2007 9:59:22 PM
From: TobagoJack	Respond to of 217868

the inertia will be overcome because Congress and the USA electorates want to boot out the companies

To: Moominoid who wrote (15319)	3/14/2007 2:25:30 AM
From: TobagoJack	Read Replies (2) \| Respond to of 217868

Got cryptic message via e-mail, and I quote, QUOTE 1) Prices are always set at the margin. If 6% of people sell, they set the price, not the other 94% unless they buy out the other 6%. 2) Rising npl rates increase reluctance to lend from banks. This is what causes the crunch. Credit officers view each borrower as a new npl. This is not the way to get promoted. So lending ie credit hence money growth slows. 3) This leads to a consumption slowdown and this hurts asia. I fear it hurts us more than we would like to admit. One because operational leverage (ie fixed to variable cost) is higher today than 10 yrs ago. This is what happens when you are a manufacturing hub. Secondly, ebit margins are at a 16 year low but asset turn is at a 16 year high. So volume has driven roe not prices. As volume falls, margins tend to follow, sadly. So what will happen next. First we go back to trend for the market, on mxfej this is some 13% below last nights close. If trend holds as it did in 04 and 06 the bull market is still intact. If trend fails, houston we have a problem. I see no need to worry about this until we get to trend. I am very confident we are going to get to trend. Once there let is see if houston picks up the phone. Until then, shorts are preferable to pantaloons! UNQUOTE What could it mean? The e-mail was in response to, and I quote again, QUOTE 'risks to other than sub-prime are low...' has been common wisdom until recently.... The other truism has been that consumer will not be affected if sub-prime is only 6% of market... But what if we get: {sub-prime+ Alt-A + CMOs backed by these} ... Is this going to get to $1trn in value at risk??? UNQUOTE