iF WE PUT THINGS INTO PERSPECTIVE

Quote from piezoe:

Though there seems to be universal agreement that the internet bubble saw stocks get wildly overvalued, i think you'll find differences of opinion regarding whether the present market is "way undervalued" It depends really on whether you think that historical P/E ratios should no longer hold and that there is a new paradigm. I for one am a bit old fashioned and view the present market as close to its historical average P/E of 15. The market now is somewhere near there, so from my perspective it is not "way undervalued." In fact it might fairly be said to still be a little overvalued depending on how you want to treat the write-downs in the financial industry. When markets become way over or way undervalued they have a way of letting us know.

It's not clear to me what you mean by "10 year yields". I assume you are referring to the next ten years rather than the 10 years just past. If you know what stocks will yield in the next 10 years, please tell us.
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sorry..... by '10 year yield' I meant the 10-year treasury.
 
Quote from NY_HOOD:

i know you all hate these kinds of posts but what the heck. from 2000-2002 the dow dropped 3,000 points from 11,000 to 8,0000/ in just 2 months,the dow already dropped 2 thousand points. to me,thats pretty darn amazing. sorry for the ramble but i am not trading today and i just thought about this.
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In 2000-2002 we didn't have the entire derivatives market imploding:eek:
 
when citi and merrill and bear sterns have to go panhandling around the globe and whore out their common shareholders for Mafia style convert. agreements....

we are in unmapped ground.....
 
another thing that is a worry. management in the financial sector have absolutely no credibility whatsoever. i think this will continue to weigh on the overall market because the financial's are so important to the overall market. contrary to what the talking heads on wall street say,deep inside they know this credit mess is going to keep getting worse.
 
Quote from piezoe:

Though there seems to be universal agreement that the internet bubble saw stocks get wildly overvalued, i think you'll find differences of opinion regarding whether the present market is "way undervalued" It depends really on whether you think that historical P/E ratios should no longer hold and that there is a new paradigm. I for one am a bit old fashioned and view the present market as close to its historical average P/E of 15. The market now is somewhere near there, so from my perspective it is not "way undervalued." In fact it might fairly be said to still be a little overvalued depending on how you want to treat the write-downs in the financial industry. When markets become way over or way undervalued they have a way of letting us know.

It's not clear to me what you mean by "10 year yields". I assume you are referring to the next ten years rather than the 10 years just past. If you know what stocks will yield in the next 10 years, please tell us.
More...

also, you have to take into context what has been moving the economy -> consumer spending

this bull was based on perhaps the most desparate and stupid fed action, ever, a deliberatly created housing bubble.

There have been other bubbles, but I dont think any have ever been deliberatly engineered

we have also been outsourcing masses of occupations, manufacturing, and now white collar

what was the consumer spending? rising home equity -> OOPS!

dont got that no more, do we

without continuous foreign lending, interest rates can shoot up

whatever a tank of gass cost before, it's twice that now

inflation is soaring

bottom line is, consumer's buying power is tapping out

shut off revenue, and P/E means nothing - it's like the operating figures of a well that's run dry
 
Quote from NY_HOOD:

another thing that is a worry. management in the financial sector have absolutely no credibility whatsoever. i think this will continue to weigh on the overall market because the financial's are so important to the overall market. contrary to what the talking heads on wall street say,deep inside they know this credit mess is going to keep getting worse.
More...

I'll say.

That Pandit can't even appear in public, he looks so wrong for the job. The stock has fallen 5 more dollars since he started.

At least Thain can go on television and get listened to - maybe even inspire you to buy.
 
one thing too, that i dont know the details on, is that basicly junk paper has been floated all over the place, CMOs, colateralized mortgage obligations

supposedly a reasonably conservative instrument, they lo longer are when they're written on a bloated asset value held by someone with an interest only ARM

so, the CMO instrument gets written down to the forclosure liquidation value

balance sheet bombs, all over the place
 
If you read Liar's Poker by Lewis you'll see how the CMO business got started largely by the mortgage department of Salomon Brothers in the eighties. I guess the mess we're in has everything to do with the collapse of global financial institutions who bought into US CMOs.
 
the whole mess is a crisis as long as bankers and politicians cant find a subverted method to shove all of this onto the US taxpayer....

the RTC was floated off balance sheet and was shoveled over 20 years....

now, there are no options which pass the smell test..... ahh the internet is good for something....
 
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