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The bad gamblers of Wall Street; they loose money and say anything is ok. They want more money…

Posted by Adrian on April 17, 2008

I wouldn’t give them a $1dollar (or maybe a EUR) to invest. The appalling risk taking, greed and generally arrogance of their businesses model is almost unreal, hard to believe. Anyone can see the mess that was created form Wall Street, you don’t have to understand the overly technical debt markets to know what a loss is; and those flunkies have lost a ton of money, and there is more to come.

Merrill Lynch, Citigroup will be post more losses soon, Fannie Mae (mortgage bank) could sink, with deficits in accounts yet to be revealed. Any Wall Street investment bank that marks down values on it’s investments is trying to offload toxic junk on it’s books. The banking contraction and credit squeeze will reach new highs as soon as the bond insurers start to look nervous, especially when the losses in the Credit Default Swap markets have yet to reveal it’s ugly head. If the IMF and other monetary committees think the credit markets losses could go into the $900 billion plus, it’s the Trillion plus figure which is more of a realistic forecast. Especially when the CDS market officially starts to collapse.

Even with the US protracting into a deeper recession, the fear is Europe that is so vulnerable to credit markets (externally and internally) could collectively head into a recession independent to the US current recession. The European banks are a mess, Swiss bank UBS and UK banks like HSBC, HBOS, Northern Rock, not to forget German banks including State owned banks – have all written down and reported massive losses connected with the US subprime mortagage collapse. In which they (Euro banks) also have to manage local populous panics and possible credit defaults within their own markets.

So caution is the only way the markets should be approached, most investors know this and hence the markets still looking at risk aversion. All interbank rates remain high. Commodities are booming.

The rude awaking from the credit markets collapse, inflation and defaults on personal assets. Gives the consumer enough sense to know that the guys at the top in someways are responsible for all this mess; and haven’t got a clue about anything.

from bloomberg 16th April 2008

“The credibility of some of these people that are making these quotes is pretty lacking,” said Jon Fisher, a Minneapolis- based portfolio manager at Fifth Third Asset Management which oversees $22 billion in assets including JPMorgan shares. “I don’t pay any attention to them. They don’t have any credibility to be calling a bottom here.”

He is right.


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