Quote from Petsamo:
Remember, Google has their car. Da cruise control will be replaced by Google control, so we'll be free to do texting!
Yeah, for doing google searches in your car and google can make more money selling ads.
The Top is Now In...Go to Cash now...right now...
- Thread starter retaildaytrader
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Yeah, for doing google searches in your car and google can make more money selling ads.
I think most of us will agree that Lehman was a big deal to the markets...but Lehman only had 24000 employees. What about a much larger firm that has 240,000 employees? What about two companies that no one suspects will go bad with a combined number of employees exceeding 500,000 employees?
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Can you see what is happening? BAC shares have been sliding while the market surges higher. BAC is a major bank which is ten times the size of Lehman. WFC is about the same size whose shares have been struggling too.
Care to take a guess as to why? First, the mortgage fiasco. Hundreds of thousands of foreclosures will be scrutinized further slowing the process. There might be some homeowners in their homes for 3-4 years without making payments.
Second and most importantly, currency bets. Bank of America is a huge currency trader and I suspect some of those bets are going to blow up. Months ago, Jim Rogers said a major financial institution, which is generally thought of as safe, will come under major pressure because of bad currency bets. I have now come to realize that institution will be Bank of America (closely followed by Wells Fargo).
http://corp.bankofamerica.com/public/public.portal?_pd_page_label=/products/fx
I am just speculating in this post and make no claim of being right.
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Can you see what is happening? BAC shares have been sliding while the market surges higher. BAC is a major bank which is ten times the size of Lehman. WFC is about the same size whose shares have been struggling too.
Care to take a guess as to why? First, the mortgage fiasco. Hundreds of thousands of foreclosures will be scrutinized further slowing the process. There might be some homeowners in their homes for 3-4 years without making payments.
Second and most importantly, currency bets. Bank of America is a huge currency trader and I suspect some of those bets are going to blow up. Months ago, Jim Rogers said a major financial institution, which is generally thought of as safe, will come under major pressure because of bad currency bets. I have now come to realize that institution will be Bank of America (closely followed by Wells Fargo).
http://corp.bankofamerica.com/public/public.portal?_pd_page_label=/products/fx
I am just speculating in this post and make no claim of being right.
Let me expand on my thoughts in regards to Bank of America.
http://www.marketobservation.com/bl...m-rogers-in-india-s-the-economic-times?blog=3
Early May 2008
Interviewer: "You said you are shorting western financial institutions. Now if I am not wrong, you were doing the same thing in the second half of 2008 and we saw what happened back then. Are you concerned or worried that something like that is going to happen again? Do you think another financial crisis is going to be upon us when investors are just going to get scared about banks?"
Jim Rogers: "Well, I was short on major western financial institutions in 2008, I am delighted and surprised you remember but I was. Then there were great excesses in the western financial community. We do not have that kind of excess now. We have excesses but nothing like we did then. I am just shorting this major western financial institution because itâs very highly priced and if the markets are going to consolidate, it will be one of the first to get hit because as there will be consolidation because of currency turmoil and financial market turmoil. I do not see a bubble in finance like we had two or three years ago. I only see two bubbles in the world, one is the Chinese urban to real estate and the other is the United Statesâ government bond market."
"As for the large western bank, it is a bank which people think is extremely sound. If I am right, there are going to be more currency problems and more turmoil in the markets, it will have to come down."
http://www.marketobservation.com/bl...m-rogers-in-india-s-the-economic-times?blog=3
Early May 2008
Interviewer: "You said you are shorting western financial institutions. Now if I am not wrong, you were doing the same thing in the second half of 2008 and we saw what happened back then. Are you concerned or worried that something like that is going to happen again? Do you think another financial crisis is going to be upon us when investors are just going to get scared about banks?"
Jim Rogers: "Well, I was short on major western financial institutions in 2008, I am delighted and surprised you remember but I was. Then there were great excesses in the western financial community. We do not have that kind of excess now. We have excesses but nothing like we did then. I am just shorting this major western financial institution because itâs very highly priced and if the markets are going to consolidate, it will be one of the first to get hit because as there will be consolidation because of currency turmoil and financial market turmoil. I do not see a bubble in finance like we had two or three years ago. I only see two bubbles in the world, one is the Chinese urban to real estate and the other is the United Statesâ government bond market."
"As for the large western bank, it is a bank which people think is extremely sound. If I am right, there are going to be more currency problems and more turmoil in the markets, it will have to come down."
Finally, a look at BAC's assets. If the foreclosure process is delayed by another year or two as a result of this mess, where do you see BAC going?
Take a moment to digest this chart. 1 trillion dollars is about the GDP of Russia or Australia. Imagine what would happen if one day Russia or Australia announced insolvency.
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
Think about the accounting rules. How are those loan's value being determined? Are they really worth 1 trillion? Lets say there was a 15% over-valuation then all of BAC's market cap would be wiped out. BAC is the next Lehman.
Take a moment to digest this chart. 1 trillion dollars is about the GDP of Russia or Australia. Imagine what would happen if one day Russia or Australia announced insolvency.
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
Think about the accounting rules. How are those loan's value being determined? Are they really worth 1 trillion? Lets say there was a 15% over-valuation then all of BAC's market cap would be wiped out. BAC is the next Lehman.
