How Were You Affected By The Market Turmoil?

[goose]

read Roubini's 12 steps to financial armageddon. we've hit step 9.

[cochise]

Yeah...I have read excerpts of it. It's worrying. 9 it is. And no one seems to be paying heed or remedying the situation. In fact, the opposite seems to be happening. The cutting of interest rates appears to be inflating another bubble...which is likely to burst with more catastrophic consequences. Currenty the market is being buoyed by trading of covering on shorts...once their liabilities are covered, expect the activity to die down and the market to start falling again. In addition, the weakening dollar is being further weakened by interest rate cuts (which will happen again soon...inflation is going up..) and is going to cause currency diversification amongst it's biggest holders...which will cause it to fall even more....dangerously poised...

[Lurker]

So none of you modafokas have been affected by the financial crisis' date=' I take it?[/quote'] It has affected me a bit yes(specially 401 K) but not so much as it has affected most other people. I have been "saved" for two reasons: 1) I have no desire to spend the rest of my life, or atleast a large part of it, in the West. This means that I dont exactly buy into this whole theory of "the market will pay itself in the long run". My investments are more into areas where I can quickly take them out if needed and hence such long term investment philosphy dont affect me. 2) Generally speaking I am not a big proponent of share market economics. In the end it makes us all greedy and thats the nutshell. You will hate Oil companies for high oil prices but given half a chance you will buy a Exxon share. You will hate getting the pink slip but you would be most happy when the companies in which you have stakes does a cost-cutting and lay off people. There is also the reason that I acted conservatively when speculation was on. In Northern California, for example, the median price of a house last year was in low 400s(425,000 $), today it is in low 300s(325,000 $) and falling down as we speak. No the price of the land didnt go down by 25% in 1 year but the speculation has died down. I have been more affected by rising gas prices as I am unable to make a trip to Vegas every month, drive down to California every two weeks and so on. Plus the cost of food has gone up and I have switched from organics to regular now. xxx

[cochise]

I have never invested myself. Always had sh*it luck as a gambler and doubt if I would do any better with an educated risk. But I have started to study it's machinations, as an amateur, due to it's wider ramifications...as we are now beginning to experience.

[Mandrake]

I think the hyper growth in many world economies in the last couple of years was due to overspending by the Americans. As they spent more, the US had to import even more. This positively cranked up economies of China,India and many other countries. However, a market boom based on over consumption can't sustain for long which is I think why we are headed downhill now. The US is hit hard due to job losses and foreclosures. Personally, I think the weakening dollar has eaten into our savings quite a bit. On the other hand you got to work harder in your job to justify the pay you are getting. Maybe that's a good thing in hindsight. This is true even for relatively lesser hit economies like India. Companies are lot cautious now and hiring has dropped dramatically this quarter. Recession is painful for everyone but its part of the economic cycle,no economy is immune to it. This too shall pass.

[retterimp]

i dont trade... way to expensive, but i manage my aunt, mine and my dad's retirement funds in my spare time. usuall do a rebalancing every few weeks, but then again the portfolio is quite diverse and in one particular case, has a minimum growth guarantee, so i am rather relaxed in my approach. if you are intending on investing and trading full time, i would seriously discourage it unless you have considerable knowledge of forecasting mathematics and years of experience, and means to do terrific research. nonetheless, investing in a bloomberg machine might be a step in the right direction (if you choose to persist inspite of my warning). costs about 1100 a month for the service, but it is quite thorough, albeit at times a bit cluttered.

but i am a full-time trader :), yes u need to do tonnes of research and be quick at basic math...but i love it...best job ever....it's a sport...just like cricket...except it's the highest stakes game in the world

[goose]

i've been a professional trader for 11 years.

[The Outsider]

Disagree with Bumper here. The current economic crisis is much more serious than the 2000-2001 which was in the end limited to the technology sector and even there mainly to the Silicon Valley companies. The Blue Chips came out of if largely unscathed. The current crisis is hitting the very basics of a developed nation - housing and is getting worse with every passing day. Goldman Sachs published some numbers at the start of the month estimating losses to be more than $1 Trillion as of today - that's almost 10% of America's GDP. Independent estimates suggest these losses might go as high as $3 Trillion with house prices coming down 30% from their peak before things stabilize. All the above is without even accounting for the trickle down effect all this is going to have in other sectors. Next in line will be auto loans, student loans etc. followed by commercial property losses. The crisis is no longer limited to sub prime buyers but is spreading to marginal and prime buyers as well. Those are huge sums of money even for an economy as large as America's. Moreover, this is hitting some of the companies which were considered untouchables. Bear Sterns is already down and out. Citi and Lehmann are thought to be walking on very thin ice by some analysts given their exposure to bad loans. Morgan Stanley has suffered some serious losses. These are companies which were the Blue Chip stocks, the untouchables not some startups in the Silicon Valley. As for the future, there are conflicting reports and solutions being projected by many researchers but there is no clear answer. What a lot of them are clear about is that the Feds indiscriminately shoring up these companies is at best delaying the inevitable and is not a long term solution. What might ultimately end up happening is a pseudo nationalization of a lot of these banks, which will be quite a drastic change for an economic model which is the beacon of the free market economy.

[The Outsider]

Just went through the posts on this thread in a bit more detail and this sentence caught my eye,

Gold crosses $1000, oil hitting the roof

This has been a historical trend and one pretty much in line with economic history. Oil and gold have tracked each other for the last 50 years. In fact, Gold-Oil ratio is considered one of the trading fundamentals of recent years, hovering between 8-12 for many years now.

[Rajiv]

It's like living in a jungle which has caught fire, even though you might be in safe spot there is no guarantee that you will escape it Till now, I don't even know what the hell is going on. I play with safe with Canadian Bonds and RRSP's, no mortgage issue and never issue credit cards or have any car leases etc I have no major investments and just do a bit of currency trading on the side My job deals with realtor's from US/Canada/Australia. I have noticed that realtor's from the west coast are more relaxed compared to the east coast one's. I am not sure how it all plays out but I have seen many of our clients quit their business but we keep getting new ones the same day.

[Lurker]

This has been a historical trend and one pretty much in line with economic history. Oil and gold have tracked each other for the last 50 years. In fact, Gold-Oil ratio is considered one of the trading fundamentals of recent years, hovering between 8-12 for many years now.

That has been the case for the past 5-10 years, specially with metals. Metal industry - specially Copper, Silver and Gold - were largely saved in late 90s due to resurgence of India and China(more so China). China single-handedly saved this industray from recession. A few years back I was working for a big Copper company, 2nd in the world, and their stock changed from 32 to 75 in 1 year, and this after the split so effectively it went from 32 to 150 in 1 year. All of this because China is rebuilding massively and there was not enough Copper(or Iron and Steel for that matter). This has pushed the price around the world. Same with Gold, only this time culprit is India. Indian consumption has gone way up. Oil is no different with heavy consumption in these two countries again. The uncertainty in Middle East, South America has also beefed up the price. I had a friend who used to trade in Precious commodity and metal markets and it was never considered lucrative. Sort of how Dental Doctors are percieved in India vis a vis Regular Doctors. Today he is making a killing. xxx

[veer]

apni 401K ki vaat lagi hui he.. most of the stocks, even international stocks, are showing negatives.. family was thinking of buying new house but only if we can sell the current one for good money.. and that is not possible at this time..

[THX_1138]

apni 401K ki vaat lagi hui he.. most of the stocks, even international stocks, are showing negatives.. family was thinking of buying new house but only if we can sell the current one for good money.. and that is not possible at this time..

join me at this crossroad junction... gets good traffic. bring a ragged t shirt, pants and a metal cup.

[goose]

load up on precious metals now - this sell off is a wonderful opportunity. all the consensus trades in recent months are suffering because the largest positions are concentrated with the hedge funds which are in deleveraging mode just now. sell equities, buy bonds, buy commodities.

[fineleg]

I had a friend who used to trade in Precious commodity and metal markets and it was never considered lucrative. Sort of how Dental Doctors are percieved in India vis a vis Regular Doctors. Today he is making a killing. xxx

Lurker /other posters, @highlighted above: I've noticed and wondered about it too. Yes, why is that? Do doctors make a lot more Rs in India than dentists? Or is it not abt money, just "more prestige"? In US, dentists make a lot of $$$ and have good respect too.

[vadodaravictor]

i've been a professional trader for 11 years.

I am passive investor. Just buy diversified, broad equity index funds and forget about it..enjoy life.:yay:

[cochise]

enjoy life

Totally agree! However, if things go down the tube...investor or no investor...we all might be enjoying poverty soon...still enjoyable...for enjoyment is not money...so again, we totally agree. Cheers!

[vadodaravictor]

Totally agree! However, if things go down the tube...investor or no investor...we all might be enjoying poverty soon...still enjoyable...for enjoyment is not money...so again, we totally agree. Cheers!

Well, that's why I only have disposable money in market.:D

[Dhondy]

Two months on. The housing market in the USA is dead, with prices forecast to fall by 50% over the next few years in previous hot spots such as California, Florida and Nevada. The property bubble has well & truly burst in places such as UK, Spain and Ireland which had seen triple digit growth over the last decade. Many of these nations now fear a recession. Yet, there's one country where growth is exceeding long term trends, unemployment is falling, and exports are booming. While the Anglo-Saxon nations flouted the virtues of their service industry, their banking sector, Germany stood resolutely by its manufacturing industry, refusing to let short term gains cloud cherished goals such as thrift and hard work. Across the English Channel, the UK had 10 consecutive years of growth, fuelled by a credit and property boom, its GDP per capita overtaking Germany's on the back of consumerism unleashed by a society that prided itself on getting what it wanted, so what if they would pay for it later? In the same period that houses in the UK appreciated by 200%, Germany's property market rose by 20%. German citizens saved hard, cut out the frills, took less holidays, eschewed sickness and made sure that they got to work on time. We are just beginning to see the results. In the last quarter, Germany grew by an astonishing 1.6%, exports are still booming, consolidating the nation's place as the largest exporter in the world, and unemployment has just fallen below 8%, the lowest in two decades. There's a lesson somewhere in there for us all.

[Bumper]

I dont know about UK. US is all about hyperbole. Booms and recessions are so common that they are merely considered parts of the economic cycle. If you get to its root cause, booms are driven by greed -- plain and simple. And US, perhaps has the maximum no. of opportunists in the world. Be it citizens, businesses or government, US tries to exploit every short term variable or trend, to get the max bang for the buck. You could say, thats true everywhere, but I dont reckon its in the same scale as the US. When you have booms of the proportions that we witness here, recessions are inevitable. Be it dot-coms or people investing on worthless stocks or on second & third homes on sub prime loans or the financial institutions that lent money to poor creditors or our honorable President waging war on Iraq -- US is a land of opportunists. In some sense, its all understandable. US is a land of immigrants, who by nature are opportunistic.