Crash Crash Crash !!!!!!!!!!!!!!!!!!!!!!!!!!!

Pyewacket338

Yoshua wrote: »

Just being nosey, can I ask how you support yourself? If you have no job and don't claim benefits? If you have no mortgage do you pay rent?

I've been living the way I do for the past 4 years.
My mortgage is paid off, I have a small(ish) amount stuffed in the bank (less than £50,000) the interest from that covers most of the household bills.
I also do a few "odd jobs" for friends, I reckon my income is around £2,000 per year, my car is paid for, I don't smoke, rarely drink, never gamble, buy what I need when I need it, once lived with a dietician so understand foods my body needs..... not wants.... and that doesn't include take-aways! It may sound like I live a boring lifestyle, but I get up to more than most, I recently went over to Italy for a few days and paid £2 for a return flight, go mountaineering to the Alps utilising cheap flights and camping, I'm also one of those annoyng people that can turn his hand to anything, from fixing my boiler to fixing my car......... and I'm a tight Yorkshireman!!!
I find most people strive for better possesions, but as much as I'd like a new 42" LCD tv or new whistles and bells lap-top, my 28" 40kilo monster Hitachi and battered and bruised USA bought (dirt cheap!!!!) Gateway do what I need them to do, I'm all for the "if it ain't broke.... don't fix it (or replace it in this case) attitude.
I'd also like to add that I'm not some tree hugging enviromentalist hippy, I've just learned to live within my means....... I still salivate over the Aston Martin in the local garage though!!

sabretoothtigger

Deleveraging and forced selling make market unsafe

By Neil Hume FT.com
Published: October 24 2008 23:07 | Last updated: October 24 2008 23:07

City traders did not need to wait for the release of third quarter gross domestic product figures at 9.30am on Friday to get an idea of how quickly the domestic economy was shrinking. A quick look at the performance of the FTSE 250 told them all they needed to know.
Following Friday’s 5.5 per cent slide, the mid-cap index, which is considered a better reflection of the domestic economy than the FTSE 100, has now halved from its May 2007 record high.
Of course, it hardly needs saying that such a decline reflects fears that the UK is heading for an economic recession. But what sort of downturn will it be? A short, sharp recession or a long and painful downturn. And how far will corporate earnings fall?

They are good reasons for thinking the slowdown is going to be much more severe than anything in the past 40 years

Fortunately, there are several rough and ready ways to measure what is being reflected by current share prices. One method is to take the current forward price/earnings ratio of an index such as the FTSE 100 or FTSE 250 and compare it to its average forward p/e over history. The difference between the two, expressed as a percentage, is a calculation of the expected decline in earnings. James Montier, of Soci!t! G!n!rale, undertook this exercise this week and found US market levels were implying a 20 per cent fall in earnings and Europe a 34 per cent drop. He says this decline is in line with the most recent of recessions.

Merrill Lynch has come to a similar conclusion. It has compared the trailing p/e for European equity markets to their 36-year average, adjusted to exclude the dotcom bubble years of 1999 and 2000. The difference between the two implies a 38 per cent drop in earnings, four percentage points more than in the previous four recessions.

However, they are good reasons for thinking the current slowdown is going to be much more severe than anything in the past 40 years. Indeed, history shows that slowdowns that follow periods of financial and banking distress are longer-lasting and deeper than normal.

The International Monetary Fund found that the average recession in developed countries since 1980 had lasted for just longer than three quarters. However, downturns preceded by financial stress have lasted for an average of almost seven quarters.

Robert Buckland, of Citigroup, thinks the current earnings downturn could be among the worst in the past four decades. In his view, global corporate profits will fall by as much as 40-50 per cent over the next two years.

A peak-to-trough fall of that size is by no means outlandish, given the recent credit binge that inflated the sales, earnings profits and earnings of companies.

Mr Buckland thinks this fall is fully discounted by the market. Over the long term, he says the global equity market p/e has been 17. Current valuations are closer to 10, which means investors are discounting a 40 per cent fall in earnings. Add on the 9 per cent fall already seen in this bear market and it means investors are pricing in a peak-to-trough fall of 50 per cent.
So, whichever way one cuts it, a lot of bad news is now “in the price”. But what is not “in the price” is a depression such as that seen in the US in the 1930s or Japan in the 1990s.
During the 1930s, US listed companies’ earnings plummeted by 75 per cent in just over three years, while in Japan they slumped 130 per cent into loss in a downturn that lasted a decade, according to Citigroup.

Of course, there are people, such as Nouriel Roubini, the New York University economics professor, who believe this could happen. He thinks it is possible that the S&P 500 index could fall from its current level of 875 points to 500-600 points.
Clearly, anybody selling at the moment has to believe that such an economic doomsday scenario will come to pass.

Unfortunately for those who do not, this is still not the time to be wading into the market. There is still too much forced selling and deleveraging by hedge funds, banks and other investors for the market to be considered anywhere near safe.
Until that process is complete – and nobody has any idea how long it will take – the only safe place to be is on the sidelines, preferably with a large pile of cash.

moanymoany

Pyewacket338 wrote: »

I've been living the way I do for the past 4 years.
My mortgage is paid off, I have a small(ish) amount stuffed in the bank (less than £50,000) the interest from that covers most of the household bills.
I also do a few "odd jobs" for friends, I reckon my income is around £2,000 per year, my car is paid for, I don't smoke, rarely drink, never gamble, buy what I need when I need it, once lived with a dietician so understand foods my body needs..... not wants.... and that doesn't include take-aways! It may sound like I live a boring lifestyle, but I get up to more than most, I recently went over to Italy for a few days and paid £2 for a return flight, go mountaineering to the Alps utilising cheap flights and camping, I'm also one of those annoyng people that can turn his hand to anything, from fixing my boiler to fixing my car......... and I'm a tight Yorkshireman!!!
I find most people strive for better possesions, but as much as I'd like a new 42" LCD tv or new whistles and bells lap-top, my 28" 40kilo monster Hitachi and battered and bruised USA bought (dirt cheap!!!!) Gateway do what I need them to do, I'm all for the "if it ain't broke.... don't fix it (or replace it in this case) attitude.
I'd also like to add that I'm not some tree hugging enviromentalist hippy, I've just learned to live within my means....... I still salivate over the Aston Martin in the local garage though!!

Salivating's free!

sabretoothtigger

The 2003 low was 3287, which is about 15% off where we are now. If the market reaches this it will complete a massive double top, which is the sign of a big fall - a 'proper' crash

the double top is a "much misunderstood formation." Many investors assume that, because the double top is such a common pattern, it is consistently reliable. This is not the case. Schabacker estimates that probably not more than a third of them signal reversal and that most patterns which an investor might call a double top are not in fact that formation.2 Bulkowski estimates the double top has a failure rate of 65%. If an investor waits for the breakout, however, the failure rate declines to 17%.

http://www.trending123.com/patterns/double_top.html



http://www.thisislondon.co.uk/standard/article-23578466-details/Analysts+predict+%27end+of+world+as+we+knew+it%27+as+shares+plunge/article.do

sabretoothtigger

SPDR S&P 500

(AMEX: SPY)
Last Trade: 86.35

http://uk.finance.yahoo.com/q?s=spy&m=US&d=

peter999

Fantastic graphs.

sabretoothtigger

Thankyou, theres a whole thread of graphs somewhere

The fed is funding gmac debt - this is what b&b in their wisdom was buying. Sounds like bad news to me especially when done through the back door so Im posting it here

http://in.youtube.com/watch?v=aSXFtyrHcHI

GMAC’s long-term debt trades around 45 cents on the dollar.

http://www.ft.com/cms/s/0/de8bc4a0-ac3b-11dd-bf71-000077b07658.html

IveSeenTheLight

peter999 wrote: »

Fantastic graphs.

Yes they are fantastic, but far too wide.
they always mean I have to scroll to the right to see them in full.
this is not good in the web world

sabretoothtigger

If theres an image too big for your screen you can right click on it, select view image and it'll open up just the image by itself and scale it to fit. Firefox does that and I think IE also does similar.
Or if you save it to desktop your computer will scale it also I think

IveSeenTheLight

sabretoothtigger wrote: »

If theres an image too big for your screen you can right click on it, select view image and it'll open up just the image by itself and scale it to fit. Firefox does that and I think IE also does similar.
Or if you save it to desktop your computer will scale it also I think

fair enough, but what about reading everyones texts that are skewed off to the right as well, or I want to thanks you or quote you.

Internet options allow me to change the size of tect I see on screen, but not of images