Wednesday, October 8, 2008

how bad is the current financial mess really?

folks, it's crazy!!! 6 central banks cut its interest rates in an emergency action today! usa, europe, great britain, ... cut the rates by soooo much (0.5 points) at the same time! how bad is the current financial mess really? i expect the markets will sell-off, but i hope i'm wrong as that would probably transfer the current financial crisis into a whole-economy-crisis! well, in few minutes will the u.s. stock exchanges open trading => we will see what happens next ...

... and the stocks did sell-off! but our PPT helped once again as there was some very strange buying after a dangerous -2% loss, then stocks bounced up, but to the end of the trading day they fell to their daily lows again, which is worse than bad for future developments :o(

(following passages are extracted from my posts @ http://www.informedtrades.com/135568-will-fed-lower-its-target-rate.html):

PLAN A.) the gold standard will come back to planet earth! earthlings, how do you feel about that? i mean, when all these folks outside take all their money from all these greedy banks. what about the fractional reserve banking? jaro, what does it mean? just answer 1 simple question: who are the first 10% @ the bank counter? assure you are among them as there are not more reserves there, if any! don't worry, cheers!

PLAN B.) we will get some next monetary reform and all the middle class will be swept away and all folks without gold, silver, land, houses (yes, houses!), oil, factories, van goghs, picassos, warhols etc. anyway. cheers again!


just look at the markets: fear + madness everywhere ...

japan: nikkei225 -9.38%
eurostoxx50 -6.54%
germany: dax30 -6.3% => here are 29 of 30 stocks negative, just volkswagen is not! no, there is no corporate buyback @volkswagen just now, there is just huuuuuge speculation out there. many trading blogs, stock newsletters and even money managers try to short volkswagen. my ex-money manager (i've fired him in the early march 2008) has shorted volkswagen at levels about 180 euros. his put options become worthless long time ago. yesterday quoted volkswagen @452 euros => short-squeeze! [10/28/2008, next short-squeeze, top €635, daily close €520]. well, there are many reasons why should volkswagen fall in price (it is more worth than mercedes, bmw, fiat, pegueot/citroen, GM, ford, nissan + renault + ... COMBINED! it is even more worth than toyota! this could be too much); but there are also some reasons why it could rise further [the 4 major stockholders: porsche (= majority owner) + the state of niedersachsen + porsche family members + piech family members DO NOT SELL any shares, so there is a limited supply, which is not good for the shorties trying to cover their shorts ;o]

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volkswagen (VW) vs. rest of the world ... found today in webspace :o)

Toyota ... = 92 Mrd. Euro
VW ....... = 94 Mrd. Euro (>> 10/28/2008, €277.83 billion, intraday even much higher! VW is now the most 'valuable' company on earth! do you know what is the market capitalization of VW's majority owner porsche? about €8 billion. any additional comments needed?)
---------------------------
BMW ..... = 14,78 Mrd. Euro
Daimler .. = 24,02 Mrd. Euro
Renault .. = 9,59 Mrd. Euro
Peugeot . = 5,07 Mrd. Euro
Fiat ...... = 8,26 Mrd. Euro
GM ....... = 3,22 Mrd. Euro
Ford ...... = 4,84 Mrd. Euro
Mitsubishi = 4,66 Mrd. Euro
Hyundai .. = 8,18 Mrd. Euro
---------------------------
TOTAL ... = 82,62 Mrd. Euro
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well, yesterday were the markets not any better as there was a lot of speculation about the expected emergency cut of rates ... in my opinion would every change of rates (especially a big one) bring additional fear into the current (irrational?) markets and additional sell-offs. just no change could add some stability ...
btw, in germany rallied today the highest capitalized stock (volkswagen) more than 40% from 290 euros to 452 (short-squeeze, see above :-) after that it fell back to 287 (-1.83%). do you call that efficient and/or rational markets? just in case you would think there was some company-related message out there today - there was none!

cheers again and again,
j.


please do not think that the worst was over, we were just in a middle of the crashy-week. if you still can handle our current financial mess, please follow (by a brave mouse click) to my comments on crash-friday: http://jarogruber.blogspot.com/2008/10/few-bucks-arrived-on-my-account-lets.html


2008 financial crisis:
just in case you've forgotten former analysis (+ possible solution :-) of this financial misery, here is the link4u: http://jarogruber.blogspot.com/2008/10/2008-financial-crisis-not-just-subprime.html
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