Market Crash? 1987 or 1929? Bank Run?

[HerefordSire]

Greetings--

Bear Strearns failed...sold to JP Morgan Chase?

Lehman Brothers failed...sold to Barclays?

AIG failed...Feds bailed them out with bridge loan?

Merryl Lynch., sold, etc?

Money market fund NAV drops below $1.00?

Lets connect the dots and then see how we can make money. At least we want to preserve money.

Cash is being sucked out of the system. Move all cash in accounts over $100K to a new account so the account is FDIC backed. I am considering selling my entire Angus herd to access cash. I will shove it into an online brokerage firm set up with ACH finding with my local regional bank. I am expecting an October correction of at least 10% (DJIA), or more, in one day (maybe a black Tuesday). This is when I want to enter the market. As soon as I rip a return, I am out. I want to make about $100K in one month.

I am looking at AAPL and POT. This is one of those times to be offensive when most are defensive.

 

[kerley]

I don't know about the rest of you, we are down $15K from second quarter report. It's time to do something. Tom

 

[bigbull338]

personally id hang on to my cows.thats the only sure money right now.if you got cows land an equipment you got money.

 

[backhoeboogie]

I don't know about the rest of you, we are down $15K from second quarter report. It's time to do something. Tom

I rolled mine out long ago. Mostly because of election concerns and what could happen. It isn't losing but it isn't making much either. I am with Herefordsire's thoughts. If there is another black Tuesday, I'll be feeling mighty froggy.

 

[Brandonm22]

If you have got money too invest, the stock market is looking increasingly attractive. If you are a real gambler, Goldman Sachs COULD be a strong play here. I wish the govt would get the heck out of the way though. Their bailouts of Bear, Freddie, Fannie, AIG, who is next? GM? Ford? Dodge? Citi? probably has dragged this thing out further and longer than it would have otherwise and delayed the bottom that is probably still 2 to 6 months out.

 

[HerefordSire]

personally id hang on to my cows.thats the only sure money right now.if you got cows land an equipment you got money.

As long as you have the cash flow to cover your overhead (as in you could be very fortunate), the bid prices for cattle and farm equipment should stabilize if we were to have a nasty sell-off. The bid prices for the items you mentioned depend upon others like yourself that may be liquidating the same items to access cash. That is what happens in history.

 

[HerefordSire]

If you have got money too invest, the stock market is looking increasingly attractive. If you are a real gambler, Goldman Sachs COULD be a strong play here. I wish the govt would get the heck out of the way though. Their bailouts of Bear, Freddie, Fannie, AIG, who is next? GM? Ford? Dodge? Citi? probably has dragged this thing out further and longer than it would have otherwise and delayed the bottom that is probably still 2 to 6 months out.

Goldman (GS) would be my third pick but there is much more risk than Apple or Potash because their sky high $99.00 book value is not defined. If traded below $130 the other day when their decent numbers came out. The pattern of weakness so far appears to be independent investment banks. There are two left in the US. Morgan Stanley and Goldman Sachs. GS appears to have a bullish upside down head and shoulders, but I would wait. I made about $5K trading it from $155 to $165 range, in and out with naked calls this spring.

 

[HerefordSire]

If you have got money too invest, the stock market is looking increasingly attractive. If you are a real gambler, Goldman Sachs COULD be a strong play here. I wish the govt would get the heck out of the way though. Their bailouts of Bear, Freddie, Fannie, AIG, who is next? GM? Ford? Dodge? Citi? probably has dragged this thing out further and longer than it would have otherwise and delayed the bottom that is probably still 2 to 6 months out.

Goldman (GS) would be my third pick but there is much more risk than Apple or Potash because their sky high $99.00 book value is not defined. If traded below $130 the other day when their decent numbers came out. The pattern of weakness so far appears to be independent investment banks. There are two left in the US. Morgan Stanley and Goldman Sachs. GS appears to have a bullish upside down head and shoulders, but I would wait. I made about $5K trading it from $155 to $165 range, in and out with naked calls this spring.

Morgan Stanley off 24% today so far.
http://finance.yahoo.com/losers?e=us

 

[bandit80]

Cash is being sucked out of the system. Move all cash in accounts over $100K to a new account so the account is FDIC backed.

There are many ways to have much, much more than $100,000 in one bank and still be insured by the FDIC. I would be happy to explain.

There have been banks fail recently because their is a "panic" in the media about bank failures and people pull their money out. What the average consumer doesn't know, is that pulling you money out of banks can directly lead to bank failures. Banks have to fund loans, securities with deposits, and if those deposits leave, they must borrow the money to make up for it. The problem is, banks can only borrow so much based on a variety of things.

A little fact. Not one person has ever lost a dime when their money has been in an FDIC insured bank. Stay calm everyone, your money is safe. Only situation where it might not be is if you are over insurance limits, but as I said before, there are ways to go above and beyond the $100,000 mark in one bank.

 

[HerefordSire]

Cash is being sucked out of the system. Move all cash in accounts over $100K to a new account so the account is FDIC backed.

There are many ways to have much, much more than $100,000 in one bank and still be insured by the FDIC. I would be happy to explain.

There have been banks fail recently because their is a "panic" in the media about bank failures and people pull their money out. What the average consumer doesn't know, is that pulling you money out of banks can directly lead to bank failures. Banks have to fund loans, securities with deposits, and if those deposits leave, they must borrow the money to make up for it. The problem is, banks can only borrow so much based on a variety of things.

A little fact. Not one person has ever lost a dime when their money has been in an FDIC insured bank. Stay calm everyone, your money is safe. Only situation where it might not be is if you are over insurance limits, but as I said before, there are ways to go above and beyond the $100,000 mark in one bank.

Lets play musical chairs. Line some chairs up in a circle. Put Led Zepplin's "Stairway to Heaven" song on. When I stop the song, everyone race for a chair to sit on. If you don't have a chair, don't worry......down the road....and she's...the...stairway to heavonnnnn.

 

[bandit80]

Cash is being sucked out of the system. Move all cash in accounts over $100K to a new account so the account is FDIC backed.

There are many ways to have much, much more than $100,000 in one bank and still be insured by the FDIC. I would be happy to explain.

There have been banks fail recently because their is a "panic" in the media about bank failures and people pull their money out. What the average consumer doesn't know, is that pulling you money out of banks can directly lead to bank failures. Banks have to fund loans, securities with deposits, and if those deposits leave, they must borrow the money to make up for it. The problem is, banks can only borrow so much based on a variety of things.

A little fact. Not one person has ever lost a dime when their money has been in an FDIC insured bank. Stay calm everyone, your money is safe. Only situation where it might not be is if you are over insurance limits, but as I said before, there are ways to go above and beyond the $100,000 mark in one bank.

Lets play musical chairs. Line some chairs up in a circle. Put Led Zepplin's "Stairway to Heaven" song on. When I stop the song, everyone race for a chair to sit on. If you don't have a chair, don't worry......down the road....and she's...the...stairway to heavonnnnn.

I'm sorry, but could you speak in English?!?

 

[backhoeboogie]

I'm sorry, but could you speak in English?!?

I think he is telling you the bank doesn't have enough nickels to pay everyone for what's deposited. First ones to withdraw get their nickels out. The rest are SOL - for a while.

Say you have $1500 deposited in your checking account but no savings. You need to pay the light bill. The bank can't cover your $1500 deposit. What happens to your lights? You will get your $1500 eventually. At the moment, you need electricity.

 

[HerefordSire]

I'm sorry, but could you speak in English?!?

I think he is telling you the bank doesn't have enough nickels to pay everyone for what's deposited. First ones to withdraw get their nickels out. The rest are SOL - for a while.

Say you have $1500 deposited in your checking account but no savings. You need to pay the light bill. The bank can't cover your $1500 deposit. What happens to your lights? You will get your $1500 eventually. At the moment, you need electricity.

That is a good explanation. I might add....Fed is injecting liquidity so there is enough cash to access because the assets being held on many company's books, although most are of good quality, cannot be sold without losing a bundle of money because the bid value for these assets are "fire sale" bids and the spreads are very wide which implies weakness.

 

[HerefordSire]

Gold up $60 per ounce today. Safety......may run back to $1,000 per ounce in a very short time frame.
http://biz.yahoo.com/ap/080917/sector_snap_gold.html

 

[bandit80]

I'm sorry, but could you speak in English?!?

I think he is telling you the bank doesn't have enough nickels to pay everyone for what's deposited. First ones to withdraw get their nickels out. The rest are SOL - for a while.

Say you have $1500 deposited in your checking account but no savings. You need to pay the light bill. The bank can't cover your $1500 deposit. What happens to your lights? You will get your $1500 eventually. At the moment, you need electricity.

That is a good explanation. I might add....Fed is injecting liquidity so there is enough cash to access because the assets being held on many company's books, although most are of good quality, cannot be sold without losing a bundle of money because the bid value for these assets are "fire sale" bids and the spreads are very wide which implies weakness.

OK, thank you backhoe and HS. I sometimes have trouble with them dollar words or phrases, I was only raised a quarter horse.

 

[redfornow]

personally id hang on to my cows.thats the only sure money right now.if you got cows land an equipment you got money.

Right now if you got all those things (cow, land and equipment)
All you have is bills.
I hope there is money down the road. But time will tell that tale also.

More cull cows go this week, with more to follow. I am sure.
Just cant put a pencil to it right now.

 

[Frankie]

That is a good explanation. I might add....Fed is injecting liquidity so there is enough cash to access because the assets being held on many company's books, although most are of good quality, cannot be sold without losing a bundle of money because the bid value for these assets are "fire sale" bids and the spreads are very wide which implies weakness.

I'd disagree quite strongly that "most are of good quality" statement. That's what's driving this uproar: loans made for more than the true value of the asset. Or "Liar Loans." Just because a 2,000 square foot house originally sold for $250,000 and is only valued at $100,000 today doesn't mean the house was EVER worth $250,000.

http://www.investopedia.com/terms/l/liar_loan.asp

 

[HerefordSire]

That is a good explanation. I might add....Fed is injecting liquidity so there is enough cash to access because the assets being held on many company's books, although most are of good quality, cannot be sold without losing a bundle of money because the bid value for these assets are "fire sale" bids and the spreads are very wide which implies weakness.

I'd disagree quite strongly that "most are of good quality" statement. That's what's driving this uproar: loans made for more than the true value of the asset. Or "Liar Loans." Just because a 2,000 square foot house originally sold for $250,000 and is only valued at $100,000 today doesn't mean the house was EVER worth $250,000.

http://www.investopedia.com/terms/l/liar_loan.asp

If you notice I didn't mention Freddie or Fannie or Country Wide credit, or all the others that bit the dust, sold, or bailed out. They are the ones that held the garbage. Some have been transferred and garbage still exists on company's books. However, quality assets are involved now...that is the main difference from now and before. The reality is...none of us know, except the Fed and insiders, the quality of the assets on the books of companies dropping like flies...for example AIG....about $1T worth of assets on the books (?) and the largest insurance company in the world and the govertnment loaned them $80B?

 

[TexasBred]

Gold up $60 per ounce today. Safety......may run back to $1,000 per ounce in a very short time frame.
http://biz.yahoo.com/ap/080917/sector_snap_gold.html

Herf...relative to your comment on POT...what is your opinion on Mosaic?

 

[Frankie]

That is a good explanation. I might add....Fed is injecting liquidity so there is enough cash to access because the assets being held on many company's books, although most are of good quality, cannot be sold without losing a bundle of money because the bid value for these assets are "fire sale" bids and the spreads are very wide which implies weakness.

I'd disagree quite strongly that "most are of good quality" statement. That's what's driving this uproar: loans made for more than the true value of the asset. Or "Liar Loans." Just because a 2,000 square foot house originally sold for $250,000 and is only valued at $100,000 today doesn't mean the house was EVER worth $250,000.

http://www.investopedia.com/terms/l/liar_loan.asp

If you notice I didn't mention Freddie or Fannie or Country Wide credit, or all the others that bit the dust, sold, or bailed out. They are the ones that held the garbage. Some have been transferred and garbage still exists on company's books. However, quality assets are involved now...that is the main difference from now and before. The reality is...none of us know, except the Fed and insiders, the quality of the assets on the books of companies dropping like flies...for example AIG....about $1T worth of assets on the books (?) and the largest insurance company in the world and the govertnment loaned them $80B?

Of course there are "quality assets" involved. There always were "quality assets" mixed in with the junk. "The reality is...none of us know" My point exactly. I don't believe we're anywhere near over the hump in the financial turmoil. People are still losing jobs, mortgages are still being foreclosed. The price of gasoline is up .30 a gallon here. Locally, if oil continues to drop, it's going to hurt our biggest employer: Halliburton...and all the sub contractors for Halliburton. I don't doubt there are bargains to be had somewhere, but I'm not putting any more money out there.