oil is rising, good for oil and marine stocks
Got shares, stuck on my portfiolio and am stuck with a lot of paper value loss
Cut loss and now waiting to stay invested
Sold everything on the high and out
oil is rising, good for oil and marine stocks
Eh why the poll don't have "still have paper gains and holding for long term"?
Fed may not rush to the rescue
Bernanke wants to break assumption that central bank will cut rates whenever there is turmoil in financial markets, according to WSJ.
August 30 2007: 5:01 AM EDT
FRANKFURT (Reuters) -- The U.S. Federal Reserve is not rushing to cut benchmark interest rates because it wants to break investors of the view that the central bank is there to bail them out, an article in the Wall Street Journal said on Thursday.
Fed watcher Greg Ip, without quoting specific sources, said Fed Chairman Ben Bernanke was keen to draw a distinction between keeping financial markets ticking over and ensuring a sound economy.
The article said there was a perception, while Alan Greenspan was chairman of the Fed, that the Fed would react to problems of financial stability by cutting rates but that Bernanke was keen to break the automatic assumption that market convulsions lead to interest rate cuts.
The Fed cut the rate it charges banks for direct loans earlier this month amid financial market turbulence but has made no change to the benchmark Fed funds rate of 5.25 percent.
"Officials acknowledge the perception of bailing out investors exists and if allowed to grow, could erode the credibility they need for keeping inflation low and encourage lax attitudes toward risk," the article said.
"They hope that taking time to weigh the economy's need for rate cuts will help discourage investors from thinking Fed officials are overly concerned with falling asset prices," it added
Never trust Fed.
You might get Fedup with their reasonings.
So talk about the downturn.
Those who defy the order are making big bucks now....... STI continue to shoot up.
Never believe in analysts, etc. Do your own homework and u will be rewarded.
Bernanke: Fed ready to act
In eagerly awaited speech, the Fed chairman says the housing market could weaken further and that the Fed is following the mortgage meltdown 'closely.'
18th Sept is the day of final decision...
Last edited by raincool2005; 31st August 2007 at 10:51 PM.
The thing about analysts is that there are so many around, some appear only when the financial markets are on the upside while others appear only when the financial markets are in turmoil. Whatever these analysts say, it is always a wise thing to read and understand those that offer proper economic analysis on downside risks.
Here is an extract from Bloomberg news to show why it pays not to always believe in the 'good' stuff. I have deleted some stuff about the new replacement which were not relevant. Read the news then see the link to the S&P website.
Aug. 31 (Bloomberg) - Standard & Poor's named Deven Sharma to replace Kathleen Corbet as president after lawmakers and investors criticized the credit rating company for failing to judge the risks of securities backed by subprime mortgages.
McGraw-Hill Cos., the parent of Standard & Poor's, said in a statement yesterday that Corbet, 47, resigned to spend more time with her family. Her exit isn't related to the current credit-market turmoil, Steven Weiss, a New York-based spokesman for the company, said in an interview. Sharma, 51, is executive vice president of investment services and global sales.
(some stuff deleted here)
Credit-rating companies may be successfully sued by investors who have lost money on subprime-mortgage securities and other similar bonds, according to a May study by Rosner and Joseph Mason, an associate finance professor at Drexel University in Philadelphia.
S&P and Moody's Investors Service failed to downgrade bonds backed by loans to borrowers with poor credit until July, when some had already lost more than 50 cents on the dollar. McGraw- Hill shares have dropped 26 percent this year on concern that the rout in the credit markets may crimp new debt sales, and U.S. Senate Banking Committee Chairman Christopher Dodd said yesterday credit rating companies must explain why they assigned "AAA ratings to securities that never deserved them.''
"We may see more management shuffles in the coming months amid charges the ratings agencies have been asleep at the switch,'' said Tim Condon, head of research at ING Groep NV in Singapore.
S&P's credibility was eroded last week when it slashed the ratings on two mortgage-backed securities funds to junk from AAA in one day. Some of the ratings on $3.2 billion of debt issued by funds set up by Solent Capital Partners LLP in London and Avendis Group in Geneva were cut by as much as 17 levels to CCC. By S&P's own definitions, the ratings firm's assessment went from "extremely strong'' to "currently vulnerable to nonpayment.''
The slump in the value of mortgage-backed securities has threatened hedge funds that borrowed from international money markets to invest in the instruments.
Basis Capital Fund Management Ltd., the Australian investment company that hired Blackstone Group LP to sell assets, this week sought bankruptcy protection for its second-biggest hedge fund, which held high-yield corporate and structured credit securities, including mortgage-backed bonds and collateralized- debt obligations.
Short interest in shares of Moody's and McGraw-Hill has soared this year, a sign investors are betting their earnings will suffer. Short interest in McGraw-Hill has tripled since February to about 6.1 million shares. The short interest on Moody's has increased about ninefold in the same period to 31 million shares, data compiled by Bloomberg show. McGraw-Hill and Moody's have declined partly on concern that subprime mortgage defaults will slow demand for ratings of collateralized debt obligations.
S&P earns fees for rating so-called structured notes, helping borrowers put together debt securities in a way that will get the highest possible credit rankings while allowing managers of the securities the most profit, according to Charles Calomiris, the Henry Kaufman professor of financial institutions at New York's Columbia University.
McGraw Hill in its accounts doesn't break out the revenue generated by S&P's different areas of activity. Moody's Corp., the parent of S&P's largest rival, does and last year made 43 percent of total revenue, or $884 million, from rating structured notes, according to Neil Godsey, an equity analyst at Friedman, Billings, Ramsey Group Inc. in Arlington, Virginia. In 2001, the business made less than a third of that figure, or $274 million. Growth at S&P, McGraw-Hill's most profitable unit, will slow in the second half from the "very, very hot'' first half, Chief Executive Officer Terry McGraw said July 24 on a conference call.
"The business is at a critical juncture, a turning point,'' said Joshua Rosner, a managing director at investment research firm Graham Fisher & Co. in New York and co-author of a study that found rating companies understated the risks of subprime mortgage bonds. "Perhaps this is a sign of further personnel and business changes to come.''
Those who believe in the rumours about subprime problems and sold their shares low are sucking their thumbs now. STI continues to power.
Thanks to the media that protraited a very glommy picture on subprime issues. Some people lost but another group of people will make huge profits. Every crisis is an apportunity.
Last month, hedge fund managers were all 'killed' when they tried to short Hang Seng Index. They failed to realise that HK is backed up by China now. China has so much money to wipe out anyone who try to be funny.
Even if I do, whether you buy or not is insignificant because we are all small timers, not unless you are institutional.
The morale of the story - do your homework, don't believe too much in analysts' comments, etc. Grap the opportunity in every crisis.
Look at recent years crisis such as Gulf War, Asian Financial Crisis, Tech Bubble, 911, Oil Shock, Subprime. Many poor and rich men are created.
also make some kopi money today... oil stocks rallied !
btw, there is a possibility of recession in USA at year end. Trade with care..
Last edited by raincool2005; 6th September 2007 at 08:46 PM.