Tuesday, January 22, 2008

Let the pants wetting continue.

So other markets around the world responded to Wall Street's power dive by tanking themselves. It was quaint watching folks try to preserve an air of salesmanship in the midst of it:
"A gloomy U.S. climate has affected the global markets. Even if those markets recover, it will take some time for the recovery to reach India because today's fall has been so drastic," said Jayant Pai, of the Mumbai investment company IL&FS Ltd.

Still, Pai and others suggested that the declines could lead to a buying opportunity.

"The sell-off today takes us close to the bottom," she said.


Do you like that part I put in bold? I think they get fired if they don't say that. "Well, yes ma'am, the ship does appear to have struck an iceberg and broken in half, but don't worry! This as bad as it's going to get. Can I interest you in a Daquiri?" Meanwhile, NYC road crews have been erecting yellow "Danger! Falling Brokers!" signs up along Wall Street.

The top three headlines on CNN.com this morning?

10 comments:

Anonymous said...

History shows that once nominal growth slows in a heavily indebted economy, there can be no recovery until the excess debt is eliminated. Political efforts to expand debt do nothing to lift the burden of debt service, which is the cause of slow growth and faltering incomes in the first place.

Too many people have become complacent about deflation. But watch out. Debt has grown too large to be sustained out of cash flow. As soon as the balance sheet is depleted, a deeper crisis of asset liquidation will catch the world by surprise.
Its not yet time to start catching falling knives.

Divemedic said...

We have to do something immediately- don't you realize that this is an election year? Do you have any idea how many incumbents are relying on you?

OA said...

Oh come on, Tam, it's not like there's a downside to the new "world economy". Everybody benefits. Everybody.

Ancillary: My boxers used to be made in the US. Then they're were made in Mexico. Now they're made in China. Can you imagine making it past the rape/murder gangs (everybody benefits. everybody) and showing up to your shanty plant in Juárez, just to find the gate locked and your job outsourced to China's (even cheaper) slave labor? Damn at the irony...


Anonymous said...
Debt has grown too large to be sustained out of cash flow.
9:11 AM, January 22, 2008

Nonsense. They'll just print even more money. No problems there...

OA said...

"Then they're"

Well, hell. I need a Red Bull...and to proofread.

B&N said...

"a deeper crisis of asset liquidation will catch the world by surprise."

So, when is the time for the whole knife catching thing?

Really, I'm quite interested.

Sailorcurt said...

I'm with the "salesman."

As far as I'm concerned, stocks are on sale.

Yipee! It's better than the Sales after Thanksgiving.

Tam said...

The 50% Off Sale the week after Christmas is nowhere near as good as the 75% Off Sale the week after that. ;)

Anonymous said...

If you are a bank or regulated entity, and you have mortgage-backed securities that have been written by a AAA monocline company, you can carry that debt on your books as AAA. But as the companies get downgraded, you have to write down the potential loss.

If you have Ambac or MBIA insurance, as a bank you have not yet written down any debt they insured. They are still rated AAA. But that re-rating is coming. And what about the monster CDS business in the hedge fund world? There are going to be more losses in the biggest banks, and even bigger investments by Sovereign Wealth Funds. Count on it.Is that blood....looks like you just got stabbed in the head with a falling knive.

Tam said...

...or the "Going Out Of Business Sale" the week after that.

Curtis Lowe said...

Thanks for that last bit, Tamara, my computer screen needed to be sprayed with Ginger Ale...