TheByte

Rob

he he, well I just took that picture from Luxury Homes for Sale - Luxury Real Estate

I agree with you Ray.

450SEL6.9

I have been browsing that site for eight, nine-years. It organizes listings, but I think all properties link to the website of the property brokerage that has the listing. I was hoping that you knew which brokerage that picture came from.

I think there is much more pain in property that analysts and the markets have not yet acknowledged. The Case-Shiller Index that has tracked U.S. property prices since '87 came out today. Prices fell 11.4% year-over-year.

Still, analysts are only forecasting a 15-20% drop in property prices. That would be a mild drop, considering the run-up from 2000 to 2005.

As you pointed out during the Asian Crisis, Rob, many property fortunes were wiped out because property prices plunged 50% and erased virtually all the price gains since the end of the first Gulf War. I don't see many forecasting that level of price drop for the U.S. and U.K.

450SEL6.9

I'm sort of reviving this thread for another few days. It has always surprised me that there is not more interest in economic and finance issues on GCF and CZ. Is everyone so rich that they can afford exotic cars even if the stock market tanks?

Looking at the stock market today gives me the jitters. The markets are a scant 10-12% from their all-time highs. Experts keep predicting this credit crisis is over and the recession is over before it has started. One analyst even said that recessions and bear markets are a thing of the past because economic theory and intervention are so advanced that nothing severely bad can happen again!

For all those invested in the market today, are you worried about a sudden, massive crash could seriously ruin your day?

I think the sharp recovery from March 17 to now is really concerning. The sheer number of people telling us the problems are over is even more alarming. It seems to be the stock market is trying to dig itself out of hole by digging down. Eventually it'll make itself a deeper crater. Personally, I think the odds of a 1929, 1987-style bloodbath on Wall Street has increased in the past month.

Harry Plopper

Repost from GCF ...


So, the collapse - not the economic - but the collapse of global financial market is here. There were many signs that was unavoidable, and many have warned about the coming crisis - but most of the people ignored the warnings, and thought "If I ignore it, all the bad will be gone."

So, here we are ...

OK, National Central Banks have lowered the interests, giving a positive signal to the economies. Many European countries started to give unlimited guaranties on deposits. Positive moves. But will this be enough? IMHO definitely not. Stock markets are still heading into the red numbers nevertheless.

Financial system is deeply wounded. All the trust has diminished. Many banks are heading into crisis & threatened by a bankruptcy. Stock values plunged, recession is around the corner. Hopefully stagflation won't be the problem - due lower demand the prices of oil, food etc are dropping.

The crisis is deep. Trust is a problem. And it will take time - several years - the trust will be fully restored again. New regulation acts will be needed, and I guess the era of turbo-capitalism is finally over.

Btw, not only banks are at risk ... even some countries are in deep problem. Eg. Iceland is on the edge of bankruptcy. Ouch.

So ... I guess what is needed now is a strong signal from US there is a determination to finally make some order. I guess when Obama is elected in November, and inaugurated in January, a strong signal will be sent. And then the situation will start to stabilize. Until than (eg. early Spring 2009) turbulent times are ahead of us. And in the late 2009, or early 2010 will be able to breathe easily. While the consequences of the crisis will be present for quite some future years.


***

Who is to be blamed for this? IMO definitely the US regulators, who were not able / willing to regulate financial markets. A complete indiscipline & decadence infected the financial markets. We saw financial orgies going on in the markets. The greed was out of control, and so was the risk. I guess many brokers & the financial bosses were on speed or cocaine when they agreed to participate in that dangerous game. Not to mention the consumers - getting loans to big for their own (paying off) capability. Complete decadence, full of orgies. I can't say anything else.

And when people are out of control, government / legislators / regulators are obligated to act / react - and put the situation under control. Yet they failed. Since US is a role model for all the other markets, the blame lies there. IMO the 8-years of GWB & his administration (incl the Republican control of the Congress) will be written in the history as one of the worst mistakes in US history, and the begning of the end of an empire.

Unless ... Unless US start a new technological revolution, based on green tech & clean energy. If this opportunity is lost, US will starting to lose its dominant position in the world.

Dear American friends, your (and our) faith is in your hands, and have that in mind on November 4th.



PS:

Are the blue chips safe?

According to the latest reports they are certainly not.
As the crisis deepens financing will be really hard, and the demand will slow down drastically. And that will hit the blue chips hard.
But that's not the hardest hit. Even harder one is the fact many companies have been financing their investments & expansions (not to mention marketing & finance tools to boost the sales) with loans. And they have been constantly refinancing old loans with new ones. Now the problem starts. New loans will be hard if not impossible to get. Especially with the poor forecast for the future performance of a certain company.

In the not so distant future - if the crisis continues - we'll see the fall-down of some very prominent & important blue chips. Yes, today some of them look steady & crisis-proof, but that's not a true story.

D/E index will become important more then ever before. IMO highly geared companies are very much at stake.

Mind that modern financial markets are not based on real (material) base but on pure trust. Now all the trust is gone. Nobody wants to loan since the info who is healthy & who is not (who's to be trusted & who not) is impossible to obtain. The old criteria usued till today is no longer usable. Now a new criteria has to be found.

Also: in the crisis period some fatal mistakes will be certainly made by some CEOs ... And we'll see some spectacular turnovers - falls of the mighty, and emerging of new "superstars".

And even more important: it's about time a crisis conference (eg. by G8) is called, and a deal is made how to fight this crisis on global level. Yet only I'm afraid such meeting will be possible after Nov 4th.

To use pilot's words: Laddies & gentlemen, we're entering into very turbulent space, so please fasten your seat belts tightly. And do it immediately, please." Just adding: And start to pray to Mercurius & Hermes.

Btw, if this crisis deepens even further we're in a deep sh!t. Not that everything will collapse but the new era is about to come. New rules, new values, new tech, new start. I just hope we'll be able to make a peaceful transition. Yet that's not 100%-ly guaranteed.

What is happeneing these daysis a down of the new era. Or better: a twilight before a dark foggy & creepy night which always comes before the dawn emerges.

Gullwing