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Global Economy Bursting?

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Western Leaders Seek to Contain European Debt Crisis, Turmoil in Markets

http://www.bloomberg.com/news/2011-...-european-debt-crisis-turmoil-in-markets.html

President Barack Obama and British Prime Minister David Cameron joined telephone consultations with euro-area counterparts yesterday as investors signaled concern a July 21 agreement to expand the 440 billion-euro ($628 billion) rescue fund would fail to stop the rot.
 
President Barack Obama and British Prime Minister David Cameron joined telephone consultations
with euro-area counterparts yesterday as investors signaled concern a July 21 agreement to expand
the 440 billion-euro ($628 billion) rescue fund would fail to stop the rot.
Click to expand...
Why would they think a bail out would work THIS time?
When it's failed each time before?
Extending the metaphor, the ship has a mortal hole in it,
& is taking on water faster than they can bail-it-out.
Bailing won't help, you have to fix the "rot", rip it out
including new Pols replacing people like Obama, Reed,
Bush, Pelosi, Bohner, etc., ad nauseum.
The only other choice is letting the ship go down;
appears to me that they've chosen that course of inaction.

.
 
Does anyone get the feeling this AAA downgrade is some kind of political payback?
Click to expand...
And if I were Obama, someone at S & P would do the perp walk next week as indictments came down for their incompetent rating of all those CDSs and MBSs from 2003-2008...which frankly should have happened a long time ago...and not just S & P. All the financial biz got a bye from being prosecuted for their incompence. How many appraisers, title insurers, lawyers, and bankers have been indicted and convicted....so how many rating agency employees and investment bankers, stock brokers or traders been convicted...virtually none and the biggest fish were found innocent.
 
This is my problem, all the tecnical indicators are telling of a Key Reversal. This S&P downgrade has been known to be coming a long time ago and it may be some kind a P***ing contest between parties.

This morning when getting my coffee, a gentleman in front was looking at the news paper and it had the S&P downgrade news in front. We began to chat and we exchange comments to were both understood each other. I told him that we had a key reversal signal and he also agreed. I asked him if was worried and he said, "no". "Why is that?", I asked, He answered, " because they are going to fix Europe."

That is when I began to question and do some research on the road. That is when I found out that the G7 was in meetings. some articles began to explain why the outcome from the G7 could benefit this weeks Rally(if any). I also called a good forumite friend and he explained to me the engineering of such condition and why it could benefit if the G7 comes to an agreement.

If they do come in, many retail stocks are at the bottom with many stochastic either at the bottom or near the bottom. If any inkling of an agreement, those will be just of many retail stocks to buy cheap, (WMT, LOW, RL, TIF) for example. If you look at Fridays candle stick you will see the candle stick with a tail. That is the key reversal candle stick. But be cautious, because the stochastic have yet to cross each other to the upside, but is starting to upswing.

Look at the chart and see the last candle with the Tail. Now try to find other retails and you might find many with the same tail, even the SPY, XLF, SMH, IWM. So that is why this S&P downgrade makes no sense.
 
Terrel L. Shields said:
And if I were Obama, someone at S & P would do the perp walk next week as indictments came down for their incompetent rating of all those CDSs and MBSs from 2003-2008...which frankly should have happened a long time ago...and not just S & P. All the financial biz got a bye from being prosecuted for their incompence. How many appraisers, title insurers, lawyers, and bankers have been indicted and convicted....so how many rating agency employees and investment bankers, stock brokers or traders been convicted...virtually none and the biggest fish were found innocent.
Click to expand...

I wonder how many know that Warren Buffet owns Moody's?

Same old mantra....follow the money.
 
When I followed the market everyday, as an investment consultant, the rating agencies appeared rather predictable. First everyone had to know something wasn't so good, and then they would downgrade (I normally took that as a buy signal). When everyone knew something was great, they would give the investment an upgrade (I normally took that as a sell signal).

Our actual rating is "A" in China. The last downgrade on the 3rd was due to an apprarent disfunctional congress but started dropping after the financial crisis.

In the old days, I suppose the function of a rating agency was to actually rate the risk of default or an inability to pay back an investment or to rate future earnings. I can't say that has been their actual function for the past 10 years or more.

During the last decade or more, I have always thought of the rating agencies as enablers for the people with money or cheerleeders for the masses. When the large holders of an investment need to get out, the rating agency increasing the investments ratings, the massses buy more, which allows the big holders to sell their holdings without lowering the price of the investment. The vice-versa happens on the downside. So it would seem they sent a buy signal on US assets - all the other stuff is political theater.

In the market, you always run in the opposite direction that everyone else is, otherwise you will get slaughtered. Although, sometimes it is hard to know in which direction the masses are running.
 
prasercat said:
When I followed the market everyday, as an investment consultant, the rating agencies appeared rather predictable. First everyone had to know something wasn't so good, and then they would downgrade (I normally took that as a buy signal). When everyone knew something was great, they would give the investment an upgrade (I normally took that as a sell signal).

Our actual rating is "A" in China. The last downgrade on the 3rd was due to an apprarent disfunctional congress but started dropping after the financial crisis.

In the old days, I suppose the function of a rating agency was to actually rate the risk of default or an inability to pay back an investment or to rate future earnings. I can't say that has been their actual function for the past 10 years or more.

During the last decade or more, I have always thought of the rating agencies as enablers for the people with money or cheerleeders for the masses. When the large holders of an investment need to get out, the rating agency increasing the investments ratings, the massses buy more, which allows the big holders to sell their holdings without lowering the price of the investment. The vice-versa happens on the downside. So it would seem they sent a buy signal on US assets - all the other stuff is political theater.

In the market, you always run in the opposite direction that everyone else is, otherwise you will get slaughtered. Although, sometimes it is hard to know in which direction the masses are running.
Click to expand...
That is true the vast majority of the time because generally the "herd" is just guessing or following rumors. Rarely does the market move based on established, solid facts because it is moving based on what will happen in the future. History shows that most people get it wrong when predicting the future so doing the opposite of "most people" will be right. (Here is where your mind should be going to the scene from The Princes Bride where Wesley and Vazzini are discussing a poisoned glass of wine. :rof: )

The best market strategy is to do your own analysis of companies and make decisions based on your analysis of that company while disregarding the actions of everyone else. A disregard for the actions of others is the only "immunity" for market swings. Above all never forget value only matters when you buy or sell.

The only time the action of a ratings agency should change your actions is when the requirement is written into your bylaws. :new_all_coholic:
 
G-7 finance officials to discuss co-ordinated central bank action

BRUSSELS - Financial officials from the Group of Seven industrialized nations will discuss how to co-ordinate action among their countries' central banks following several days of market panic and a downgrade of the U.S. credit rating.

Many economists see the world's big central banks as the last line of defense at this moment in the crisis, after policymakers in Europe and the U.S. have failed to agree on the kind of shock-and-awe moves that many investors demand.

Possessing the power to create money, many central banks around the world have intervened in bond and currency markets in recent years in an effort to give their countries' struggling economies a shot in the arm.

The eurozone leaders last month decided to give their bailout fund new pre-emptive powers, such as the ability to buy distressed government bonds on the open market like the ECB, extend short-term credit lines or help re-capitalize struggling banks.

However, those new powers have not been implemented yet — a process that may take until early September unless national parliaments are called back from their summer recess. Analysts also warn that at the moment, the bailout fund is too small to successfully use its new tools.
 
ANALYSTS VIEW- What is needed from U.S., Europe, G20 to settle mkts

http://www.moneycontrol.com/news/wi...eededus-europe-g20-to-settle-mkts_573807.html

MOHAMED EL-ERIAN, PIMCO

"It is hard to imagine that, having downgraded the US, S&P will not follow suit on at least one of the other members of the dwindling club of sovereign AAAs. If this were to materialize and involve a country like France, for example, it could complicate the already fragile efforts by Europe to rescue countries in its periphery."

MIKE LENHOFF, BREWIN DOLPHIN IN LONDON

"The ECB has got to confront the speculators who are out to test the policymakers. There is no reason why the ECB cannot simply go ahead and imply that they are going to support the Italians and the Spanish."

As for Washington: "They displayed a complete lack of leadership. Now America has got what they deserved."

GEOFFREY YU, UBS IN LONDON

"The Fed and Treasury, however, now have plenty of experience dealing with such events, so expect them to take emergency measures to alleviate any sign of stress. There is little reason to doubt they have contingency plans in place."

DAVID BACH, ECONOMIST AT IE BUSINESS SCHOOL IN MADRID

"My concern is that we could end up seeing a Japanese scenario of a lost decade in the U.S. and the euro zone. If you look at Japan it took small and indecisive measures to end the crisis and what was needed was bold economic reforms."

FILIPE GARCIA, HEAD OF INFORMACAO DE MERCADOS FINANCEIROS CONSULTANTS IN PORTO

"It's historic times we live in. The problem has ceased being confined to the European periphery. Now we talk about two countries out of G7 (US and Italy) and soon they may start talking about France."

NICK STADTMILLER, DUBAI-BASED EMIRATES NBD

"The problem is not one of liquidity but of credit worthiness on the part of the sovereigns."
 
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