Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: jim_p who wrote (6069)	8/19/2007 2:45:28 PM
From: Travis_Bickle	Respond to of 50531

I have read in a couple of places that a lot of the hedge funds probably won't survive, when they close their positions it creates counter-intuitive volatility (what should be going up goes down, and vice-versa). Makes it hard for anyone to make money. This is related to the carry trade but extends well beyond it, just look at what a heavily shorted stock like PHM has done the past two sessions.

To: jim_p who wrote (6069)	8/19/2007 3:43:30 PM
From: crdesign	Read Replies (1) \| Respond to of 50531

Anyone think of any others? 8. The rolling over of past car loan debt into the new car purchases. My brother in law works for Citizens Bank approving new car loans. He is allowed to approve loans on new auto purchases up to 125% over the sticker value of the new car?!?!? How crazy is that? Tim

To: jim_p who wrote (6069)	8/19/2007 5:55:06 PM
From: rich evans	Read Replies (1) \| Respond to of 50531

Two sides to any story. 1. Carry trade unwinding about done. Yen went down Friday. 2. Credit curve has steepened. That is true. So an A rated finance company pays more interest for it CP then in the past versus AA or AAA. But it can still borrow and pass the interest to it corporate borrowers keeping spreads the same. This seems to be what is happening. Plenty of cash around . The problem was freeze up- not being loaned. Commercial loans being funded. 3. Subprime is the problem. 15-20 % of mortgage market. With defaults over 60 days at most 15-20%. Many mortgage companys reporting much less 6-7%. No reason to freeze up the whole home mortgage market or commercial lending market. Check out Countrywide Financials report for business in July just released. 4.This is temporary. Banks still doing CP. They have plenty of cash and did not want more from Feds per news reports. Fed got less then its fund rate when it tried to give them more cash with RPOs. 5. Country wide did draw down. CIT did not. Depends. Countrywide is being prudent but I doubt whether they will need the cash based on July report. Can everything go south in 3 weeks? 6. Corporate balance sheets are very strong historically. Leverage was only with the investment /financial types -hedge funds. They will take the losses. Others like banks , insurance investments, pension funds were not overleveraged and can wait for times. 7.Has been unwinding by the hedge and other leverged investors causing selling in anything that could raise money whether stocks or oil, or futures or whatever. But looks about done. Great buying opportunity presented since overal global economy and US economy doing well. What is Buffett doing? I have been buying. Differences in opinion is why we have buyers and sellers. Ricb

To: jim_p who wrote (6069)	8/20/2007 5:26:42 AM
From: paul ross	Respond to of 50531

"Inflation is still heating up across the globe..." and "Going forward liquidity will decrease for a number of reasons..." seem at first glance to be mutually exclusive concepts. If their is world wide inflation going forward, there'll be massive amounts of money going somewhere,into something. Is the bubble economy really dead over the next several years or is it we just may see bubbles where we haven't seen bubbles before. Thanks for yours and Sliders insightful,thought provoking posts.