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.

Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: SouthFloridaGuy who wrote (6849)	5/4/2008 11:34:29 AM
From: Real Man	Read Replies (1) \| Respond to of 71446

Yep, Last year the market discovered 50bp. spread for subprime bonds was a bit too low for the credit risk involved. Prior to that point subprime - backed bonds were virtually risk free securities -g- Then the market might discover that the Fed's abilities are limited by their balance sheet, and they actually have to print in order to expand it. The dollar will discover new lows, as folks find out it's cheaper to borrow the buck and invest it elsewhere at higher returns, and foreigners might discover it's beneficial to exchange certain worthless pieces of paper for valuable commodities.

To: SouthFloridaGuy who wrote (6849)	5/4/2008 11:48:55 AM
From: RockyBalboa	Respond to of 71446

People on Silicon investor evidently represent the average market participant (more or less). To demonstrate how slow those events unfolded, just start reading here. We have been in a state of maximum complacency and an utter state of denial. Weak NEW reporting: Message 23083676 Subprime D Day: Message 23263944 Even CFC took a long time to crash (it traded at $40) Message 23363506 etc... Chronology of events: Message 24039987

To: SouthFloridaGuy who wrote (6849)	5/4/2008 4:55:27 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 71446

Once discovered? Hmm. When shorting stocks was hardest, circa May 2007 and merger activity at the maximum level many wondered where all this money is coming from: Message 23558509 Note that in May, spreads were tight and rating agencies "accomodative". No one could imagine that it took less than three months to put an end to this... in short, impossible to time, true after the fact. One month later, none the wiser: Message 23607508 It is entirely possible that there is no difference in herd mentality and hubris beween fund managers and the general investor.