Thursday, March 20, 2008

Crisis Over! – What the hell is going on here?

U.S. Stocks Rally; Fannie Mae, GE Advance on Analyst Upgrades

Other banks and brokerage firms also advanced after Punk Ziegel & Co. analyst Richard Bove wrote in a research note that ``the financial crisis is over'' and it is a ``once in a generation opportunity to buy.'' Citigroup Inc., the largest U.S. lender by assets, climbed $2.09 to $22.50. Bank of America Corp., the second-biggest, increased $3.30 to $41.86. Goldman Sachs Group Inc., the largest U.S. securities firm, rose $13.14 to $179.63. Only a few days ago Bear Stearns collapsed and now apparently the crisis is over!!!

Posted by tyrellcorporation @ 08:47 PM (1525 views)
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12 thoughts on “Crisis Over! – What the hell is going on here?

  • I believe it’s called ‘Ramping’.

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  • Rubbish!

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  • DEAD

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  • CAT

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  • BOUNCE

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  • Landedgentry says:

    Short covering for easter weekend.

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  • General Electric (GE) is a company “whose businesses include turbines, jet engines, medical imaging machines, security and finance”. Sounds like they do some genuinely productive, useful things: the kind of company the the UK and USA needs more of. I am happy to buy the idea that GE may be doing well for itself.

    Fannie Mae and Freddie Mac are somewhat different entities.
    http://en.wikipedia.org/wiki/Federal_National_Mortgage_Association
    http://en.wikipedia.org/wiki/Federal_Home_Loan_Mortgage_Corporation
    In the current financial climate, the idea that these entities are healthy just seems perverse. I suspect that this quote from the article is a clue to why the analysts are praising them:

    “The government-sponsored enterprises had their surplus capital requirement cut to 20 percent from 30 percent by the Office of Federal Housing Enterprise Oversight yesterday, which may help pump $200 billion into the mortgage-backed securities market.”

    I don’t think I want buy shares in Mae or Mac right now, thanks.

    “Other banks and brokerage firms also advanced after Punk Ziegel & Co. analyst Richard Bove wrote in a research note that “the financial crisis is over” and it is a “once in a generation opportunity to buy.” ”

    WTF? If anybody can give me a convincing explanantion of why the crisis is over, I’d be very interested to hear it. I do not believe that America has managed to flush all the toxic debt out of its financial system – in fact nowhere near it.

    ““We’re coming very close to a market bottom,” Peter Sorrentino, who helps manage about $15 billion at Huntington Asset Management in Cincinnati, said in an interview on Bloomberg Radio.”

    Now I have to agree with Plato – that looks like ramping on steroids.

    To me, the article looks like a mix of genuinely good news (GE) followed by some very cynical self promotions.

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  • Shows what a con-game all this financial wizardry really is. Also shows who’s pulling the ‘talking heads’ strings – so blatant. Thing is why? Qui bono (who benefits)?!?

    I also wonder about the little talked about Plunge Protection Team, and the influence they must surely be exerting?

    And remember this whole ‘credit crunch’ came when the music stopped, aka the .05 – 1% Japenese carry trade.
    @Techiman – can you shed any light on the above statement?

    Thing is, though, how many average joe and jane invester will buy this rubbish and jump back in the market? They appear to be desperate at the moment, or maybe there’s a real war going on between the big financial houses for dominance – I mean how on earth was Morgan S allowed to buy BS ( – no pun intended 😉 for 2 cents on the dollar, together with a guarantee from the Fed to not be hit by any further loses. Oh yes that’s right, Dimon (ceo of MS) sits on the board of the Fed – independence anyone!!! In my job I’d be arrested for such vested interest (and as I’ve said before the Fed was created by The Morgan Stanley, The Warburg, and the one and only… Rockerfeller.

    And we have Northern Rock.

    Final thought – I expect this sharrad of financial porno will continue until the US (read BS) election in November. The Obama will inheret the truly poisoned challice, which is when the plug will really be pulled. Also the people are wising up fast that they’ve conned for generations and there’s nothing they can do about it.

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  • Quiet Guy: “To me, the article looks like a mix of genuinely good news (GE) followed by some very cynical self promotions.”

    Sort of agree with the above, but I think it’s designed to put back to sleep – sort of well, I’ll move my money to GE and it’ll be OK. And doesn’t GE Finance look extremely doggy at the moment? Not sure, but just a thought – also don’t know if that would affect GE stock overall.

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  • I think there is an argument to be made that markets bottom when the intensity of bad news is at its greatest.

    Markets seem to be taking the bet that Bear going under is as bad as it can get. I would buy into that if the economy wasn’t slipping and the incident was contained.

    It clearly is not and I fully expect the markets to be lower in the near future.

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  • Layers – thanks for asking. All i can say is this, if you look at charts for AMBAC , MBIA http://finance.yahoo.com/q/bc?s=MBI and Freddie Mac http://finance.yahoo.com/q/bc?s=FRE you will see that they have plunged. Now as has been said on here before markets generally overcook the upside and the downside. If you look at homebuilders you will see the same sort of pattern. Now they are 2 reasons why there will be a DCB – per Paul. one is the markets were (temporarily) oversold, and two is the shorts took some profits and / or there was a squeeze. Now alternatively if we have found a genuine bottom, then it could be that the bad news is just over-discounted. What will happen is that bad news will be shrugged off and good news will be celebrated with bullish moves up. Dont get me wrong we still have event risk (eg another bank toppling over) which could create new lows.

    IT looks like the market wants to move higher to me – for how long and how much higher, well if i could tell you that I wouldnt both playing the lottery. Personally i am long cheap out of the money calls, but really these are not agressive long positions and im not exactly a staming bull. Im sorry if that hasnt helped much!

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  • Get used to this guys!

    There will be poeople saying “The Crisis is over!” on every bounce up in shares. Remember share prices never rise or fall in a systematic way, there are ups and downs all the way!

    Just like we would say “thats it! game over, were on our way down” for every major downtik, on the way up!

    The Crisis will be over when most people believe it will never end!

    Think about it, how many of us were beginning to think that maybe prices would never come down this time last year!

    HPC needs its own confidence meter! When the bearish stance gets low, then the end is nigh. Only now of course it will be when the bearish stance gets high, we will be near the bottom!!

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