Re: Why will the dollar rally?
 

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The financial stocks are getting slaughtered. CFC is going bankrupt and WM to single digits, maybe even extinction. These financial institutions are marking to myth and hiding their derivate exposure. They are finally starting to leak out one by one how bad of shape they are in. Citi dumps their CEO, MER dumps their CEO. Morgan Stanley just announced a 2.5B write-down. You guys are kidding yourselves if you think Goldman is immune. They are going to get slaughtered. [img]/images/graemlins/grin.gif[/img]

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You do realize these "derivatives" are zero-sum and don't need to be accounted for in calculating net losses, right? It affects liquidity, for sure, but it has no relevance in determining solvency of the financial sector as a whole. If someone's sitting on a big loss on their derivatives position, someone else is sitting on a gain. Now, in a real liquidity crisis, things could change (you could have a scenario where losses are real but gains aren't due to counterparty's liquidity issues) but the fed isn't going to let fundamentally solvent entities go down due to things like that.

What's really great about this credit crisis is that it allows all these people who have no idea what ABS, MBS and CDO are, who have no idea what subprime actually means, who couldn't price bonds or model credit risk if their life depended on it, to suddenly decide that they can calculate what the totality of the losses for the financial sector will be and that certain financial institutions will go down, without having seen the actual positions of any of those firms or having any idea of what the universe of those "bad" bonds looks like.

Re: Why will the dollar rally?
 

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goldman may have alot of exposure in terms of level 3 assets but they hedged that with bets against subprime. Equity drop,s profit increase to be put right back into equity. Smart people always step out of the way to avoid the falling safe.

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so only one company out of the group has smart people? if they are smart, they should short their own stock. they are going to get smashed.

Re: Why will the dollar rally?
 

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Because it is the mighty, mighty dollar!

Seriously though, the dollar is not going to become worthless. It might continue to slide a bit more but I think most of you are severly understimating the strength of the U.S. Economy and the strength of the country in general, long-term.

Get greedy when others are fearful.

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It is not going to become worthless. Just worth about 40-50% less than current values on the USDX. A short lived dollar rally is probably around the corner, but I am not changing my positions. Short CFC, WM, puts on GS and long on gold and silver related assets. Liquid cash currently in Canadian Dollars ETF (+20% on the year) and might be moved to Swiss Franc ETF.

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The financial stocks are getting slaughtered. CFC is going bankrupt and WM to single digits, maybe even extinction. These financial institutions are marking to myth and hiding their derivate exposure. They are finally starting to leak out one by one how bad of shape they are in. Citi dumps their CEO, MER dumps their CEO. Morgan Stanley just announced a 2.5B write-down. You guys are kidding yourselves if you think Goldman is immune. They are going to get slaughtered. [img]/images/graemlins/grin.gif[/img]

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One dumb post too many, bye bye: IGNORE ON!

Jimbo

Re: Why will the dollar rally?
 

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goldman may have alot of exposure in terms of level 3 assets but they hedged that with bets against subprime. Equity drop,s profit increase to be put right back into equity. Smart people always step out of the way to avoid the falling safe.

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so only one company out of the group has smart people? if they are smart, they should short their own stock. they are going to get smashed.

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you completely ignored my point, or purposely avoided it.

Re: Why will the dollar rally?
 

[ QUOTE ]
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goldman may have alot of exposure in terms of level 3 assets but they hedged that with bets against subprime. Equity drop,s profit increase to be put right back into equity. Smart people always step out of the way to avoid the falling safe.

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so only one company out of the group has smart people? if they are smart, they should short their own stock. they are going to get smashed.

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it may be that only goldman was quick enough to jump in, or had risk managers that saw it coming, or it could be that other firms have done similar things and only goldman's is reported.

but overall, goldman is very safe. i do think it hilarious that the "level III asset" thing is spoken as if goldman is in danger of bankruptcy lol. oh noes, they has 2:1 level III asset exposure : equity base. they be in the toilet haha.

even if the value of the level III assets fell towards 0, goldman has so many hedges in place that they'd likely only net lose a few billion.

and goldman also recently got the fees as the main underwriter for alibaba. yea, goldman is in serious trouble.

note that shorting the stock may not be a bad play. but betting against goldman's ability to produce positive earnings in this environment is [img]/images/graemlins/wink.gif[/img]

Barron

Re: Why will the dollar rally?
 

[ QUOTE ]
[ QUOTE ]
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[ QUOTE ]
Because it is the mighty, mighty dollar!

Seriously though, the dollar is not going to become worthless. It might continue to slide a bit more but I think most of you are severly understimating the strength of the U.S. Economy and the strength of the country in general, long-term.

Get greedy when others are fearful.

[/ QUOTE ]

It is not going to become worthless. Just worth about 40-50% less than current values on the USDX. A short lived dollar rally is probably around the corner, but I am not changing my positions. Short CFC, WM, puts on GS and long on gold and silver related assets. Liquid cash currently in Canadian Dollars ETF (+20% on the year) and might be moved to Swiss Franc ETF.

[/ QUOTE ]

The financial stocks are getting slaughtered. CFC is going bankrupt and WM to single digits, maybe even extinction. These financial institutions are marking to myth and hiding their derivate exposure. They are finally starting to leak out one by one how bad of shape they are in. Citi dumps their CEO, MER dumps their CEO. Morgan Stanley just announced a 2.5B write-down. You guys are kidding yourselves if you think Goldman is immune. They are going to get slaughtered. [img]/images/graemlins/grin.gif[/img]

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One dumb post too many, bye bye: IGNORE ON!

Jimbo

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Putting me on ignore is not going to fix the problem. The financial stocks are in huge trouble. There is no liquid market for their derivatives. They are priced using fantasy models. Counterparty risk is also a major concern. Who cares if you are up huge on your derivative when the guy you are supposed to collect from is broke. They halted Barclays briefly this morning, now you got Wachovia issuing a write-down, Fannie Mae took a massive loss and warned too. We haven't even started. I anticipate the FED coming in and injecting massive amounts of liquidity into the system causing further downward pressure on the dollar and a massive uptick on gold. Gold is going to $2000 boys. Take that to the bank.

Re: Why will the dollar rally?
 

gold, dow, sp500 YTD returns:
http://finance.yahoo.com/charts#chart9:s...ource=undefined

Re: Why will the dollar rally?
 

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gold, dow, sp500 YTD returns:
http://finance.yahoo.com/charts#chart9:s...ource=undefined

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one more thing. account for the depreciation of the dollar and those in the DOW & SP500 index funds have lost money YTD.

Re: Why will the dollar rally?
 

well then gold hasnt gone up nearly as much if you account for the dollar either.

Re: Why will the dollar rally?
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Because it is the mighty, mighty dollar!

Seriously though, the dollar is not going to become worthless. It might continue to slide a bit more but I think most of you are severly understimating the strength of the U.S. Economy and the strength of the country in general, long-term.

Get greedy when others are fearful.

[/ QUOTE ]

It is not going to become worthless. Just worth about 40-50% less than current values on the USDX. A short lived dollar rally is probably around the corner, but I am not changing my positions. Short CFC, WM, puts on GS and long on gold and silver related assets. Liquid cash currently in Canadian Dollars ETF (+20% on the year) and might be moved to Swiss Franc ETF.

[/ QUOTE ]

The financial stocks are getting slaughtered. CFC is going bankrupt and WM to single digits, maybe even extinction. These financial institutions are marking to myth and hiding their derivate exposure. They are finally starting to leak out one by one how bad of shape they are in. Citi dumps their CEO, MER dumps their CEO. Morgan Stanley just announced a 2.5B write-down. You guys are kidding yourselves if you think Goldman is immune. They are going to get slaughtered. [img]/images/graemlins/grin.gif[/img]

[/ QUOTE ]

One dumb post too many, bye bye: IGNORE ON!

Jimbo

[/ QUOTE ]

Putting me on ignore is not going to fix the problem. The financial stocks are in huge trouble. There is no liquid market for their derivatives. They are priced using fantasy models. Counterparty risk is also a major concern. Who cares if you are up huge on your derivative when the guy you are supposed to collect from is broke. They halted Barclays briefly this morning, now you got Wachovia issuing a write-down, Fannie Mae took a massive loss and warned too. We haven't even started. I anticipate the FED coming in and injecting massive amounts of liquidity into the system causing further downward pressure on the dollar and a massive uptick on gold. Gold is going to $2000 boys. Take that to the bank.

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if there was one area that would be least likely to spill over into the real economy it would be the performance of financial services stock, whereas the reverse is totally untrue (real economic problems readily spill over to fin.services).

thus i don't think the fed will jump in and risk inflationary pressures with a rate cut if only the financial sector is performing very poorly.

i will gladly bet $1000 that we don't see gold hit $2000 by the same date as our previous goldb et. let me know if you're interested.

Barron