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UGLY out there right now. Dow down 2%, SPX down more than 2%, Nasdaq Comp down 2.7%, and Russell 2000 down over 3%.After ignoring a lot of bad news over the past month or so, the equity market is making up for lost time today.The real question is whether this is just a garden variety liquidity crisis driven by sudden risk aversion (these happen semi-regularly and are probably healthy, if unpleasant...like wheatgrass or soy milk) or whether it is the tip of a more sinister iceberg.

Global Stocks Drop; Investors Shun Risk as Credit Woes Worsen By Eric MartinJuly 26 (Bloomberg) -- Stocks tumbled around the world and U.S. Treasuries rallied on concern higher borrowing costs will slow takeovers, spur debt defaults and curb earnings, prompting investors to flee riskier assets. The Standard & Poor's 500 Index fell to its lowest in almost three months, while Europe's Dow Jones Stoxx 600 Index dropped 2.7 percent, its biggest retreat since March. Benchmark stock indexes in Brazil, Mexico, Argentina, Korea, Poland, Russia and Turkey slid more than 2 percent. ``We're seeing a global repricing of risk as the cost of capital ratchets up,'' said Joseph Quinlan, chief market strategist at Bank of America's investment strategy group in New York. Bank of America's investment-management unit oversees about $566 billion. ``We're working our way through a period of angst and anxiety.'' Treasuries rallied as investors sought the relative safety of government debt, pushing the yield on the 10-year note to the lowest since May. Citigroup Inc., the biggest financial company, fell 3.3 percent and is poised for its steepest weekly retreat in four months. Deutsche Bank AG, Germany's largest bank, slid for a third day and reached the lowest since March. Exxon Mobil Corp., the biggest energy company, tumbled 4.5 percent after profit fell for the first time in more than three years. The S&P 500 Financials Index in the U.S. tumbled to a 10- month low on concern defaults will curb earnings and reduce this year's record pace of takeovers. About $3.07 trillion in global mergers and acquisitions helped send the S&P 500 and the MSCI Asia-Pacific Index to records this month. Investors Balk Chrysler and Alliance Boots Plc failed yesterday to find buyers for $20 billion of loans to pay for their buyouts, leaving banks holding the debt. Cadbury Schweppes Plc, the London-based maker of Dairy Milk chocolate, may get less than the $15 billion sought for its U.S. beverage unit as two buyout groups bidding for the division struggle to arrange funding, people with knowledge of the talks said. The risk of owning corporate bonds was also driven higher after a hedge fund co-owned by ABN Amro Holding NV's Australian unit suspended withdrawals, adding to concern that fallout from bad home loans to risky borrowers will worsen. The cost of the credit-default swaps, used to bet on the ability of companies to repay debt, is the highest in more than two years. The U.S. benchmark CDX Investment Grade Index jumped $6,000 to $62,750, Deutsche Bank AG said. In the U.S., homebuilders plunged to a four-year low after D.R. Horton Inc. and Beazer Homes USA Inc. reported losses. A government report showed purchases of new homes in the U.S. dropped more than forecast in June. D.R. Horton, Exxon D.R. Horton fell 5 percent to $16.60 after reporting its first quarterly loss in at least a decade. Beazer dropped 6.6 percent to $15.91. Exxon Mobil slid $4.20 to $88.59. The company said second- quarter earnings fell 1 percent after production and crude prices retreated. Per-share profit, which rose to $1.83 from $1.72 as buybacks reduced the amount of stock outstanding, was 13 cents below the average of 17 analyst estimates compiled by Bloomberg. Deutsche Bank, which along with JPMorgan led the banks forced to keep $20 billion of loans financing Kohlberg Kravis Roberts & Co.'s takeover of Alliance Boots, slid 2.4 percent to 98.70 euros. Asian Stocks Asian stocks dropped the most in a month after Nippon Electric Glass Co. and Advantest Corp. reported lower earnings and metals prices slumped. Nippon Electric plunged 17 percent to 1,905, while Advantest retreated 5.2 percent to 4,920 yen. BHP Billiton Ltd., the world's biggest mining company, declined 2 percent to A$37.30, adding to yesterday's 1.9 percent loss. The MSCIA Asia Pacific Index lost 0.8 percent. South Korea's Kospi index tumbled 40.68, or 2 percent, to 1,963.54. Brazil's Bovespa Index lost 2.9 percent, while Turkey's ISE National 100 Index fell 3.1 percent, the biggest move among equity markets included in global benchmarks. Emerging-market bonds tumbled, pushing yields over U.S. Treasuries to the widest since September, as investors reduced their holdings of riskier securities. The spread, or extra yield, on emerging-market bonds over U.S. Treasuries widened 15 basis point to 2.1 percentage points at 11:37 a.m. in New York, according to JPMorgan Chase & Co.'s EMBI Plus index. A basis point is 0.01 percentage point. The risk premium is the widest since Sept. 26. Argentina led declines in emerging-market bonds. The spread on all of Argentina's dollar bonds surged 36 basis points to 4.37 percentage points more than U.S. Treasuries, the biggest gap since Jan. 26, 2006. To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net .

Merrill Lynch's Bernstein Says Takeover Odds Are `Plummeting' By Nick BakerJuly 26 (Bloomberg) -- Investors should stop speculating that takeovers will send shares higher because credit markets are signaling that the buyout boom is ending, Merrill Lynch & Co. Chief Investment Strategist Richard Bernstein said. Announced acquisitions have surged to $3.07 trillion globally this year, or 56 percent ahead of 2006's record pace, sending stock markets higher and pushing the Standard & Poor's 500 Index in the U.S. to a record. Investors are now balking at financing takeovers. Yesterday, Chrysler and Alliance Boots Plc failed to find buyers for $20 billion of loans to pay for their buyouts. Ten banks, including Deutsche Bank AG and JPMorgan Chase & Co., were stuck holding the debt. Also, the extra yield investors demand to own the riskiest debt yesterday increased to 371 basis points, or 3.71 percentage points, the highest since January 2006, according to Merrill Lynch index data. ``With the debt markets quickly moving to ration credit, the probability of companies being `taken out' is plummeting, in our judgment,'' New York-based Bernstein wrote in a note. ``Equity investors should discontinue their speculation regarding takeovers.'' The S&P 500, which set a record high on July 19, lost as much as 1.9 percent today amid concern about loan defaults and the freeze in takeover financing. The measure tumbled 2 percent on July 24, the most in more than four months. To contact the reporter on this story: Nick Baker in New York at nbaker7@bloomberg.net .

New home sales fall, durable goods orders weakBy Joanne MorrisonWASHINGTON (Reuters) - Sales of new homes dropped more than expected in June, while orders for long-lasting U.S.-made goods were weaker than analysts thought, according to reports on Thursday that raised fresh concerns about economy.Major U.S. stock indexes slid more than 1.5 percent by late morning, causing the New York Stock Exchange to impose curbs on computer program trading. U.S. government debt prices rose in a flight to quality, as investors continued to be worried about riskier assets, such as securities backed by subprime mortgages and stocks."The U.S. business sector may not be providing as much of a sturdy offset to the weak housing sector as expected," said Sherry Cooper, chief economist at BMO Capital Markets.Orders for U.S.-made durable goods rose in 1.4 percent June, the Commerce Department reported, but they were below Wall Street expectations of a 1.8 percent gain, and a measure of business spending in the data fell unexpectedly.Separate Commerce Department data showed continued weakness in the housing sector, with new single-family homes sales falling 6.6 percent in June to a lower-than-expected level leaving a bloated inventory of unsold homes.Analysts were expecting to see a rise in economic output during the second quarter, primarily as businesses rebuilt inventories, but going forward growth is likely to moderate.The Labor Department reported that U.S. unemployment benefits fell unexpectedly by 2,000 last week to the lowest level since May.But that employment figure did little to sooth investors considering the disappointing durable goods data in a climate of fear that credit could be drying up.DURABLE GOODS ORDERS DOWNThe rise in new orders for goods meant to last at least was boosted by an increase in nondefense aircraft. A 43 percent surge in new orders at Boeing was what helped boost overall durable goods orders, economists said.But within that Commerce report, nondefense capital goods orders excluding aircraft -- seen as a good gauge of business spending -- fell 0.7 percent, well below economists' expectations for an 0.8 percent gain."The demand for big-ticket items was a mixed bad, which reflects the state of the economy," said Joel Naroff, president and chief economist at Naroff Economic Advisors in Holland, Pa.Investors found some minimal solace in the Labor Department report showing initial jobless claims for state unemployment benefits fell for the third week to 301,000 in the week ended July 21 from an upwardly revised 303,000 the prior week.That marked the lowest level of weekly initial jobless claims since May 12, and was below expectations for a reading of 310,000.NEW HOME SALES DOWNThe government's latest data pointed to continued troubles in the housing sector as new single-family home sales in June fell to an annual rate of 834,000, well below the 895,000 sales rate Wall Street analysts were expecting.The median sales price of a new home fell 1.3 percent to $237,900 from $241,000 in May.There were 537,000 new homes for sale in June, holding the same level reported in May. It would take 7.8 months to clear that inventory at the current sales pace.(Additional reporting by Doug Palmer and Patrick Rucker in Washington)

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Buyout boom shouls be interesting to watch. Some of the leverage levels on those deals were extremely high. Also, just a ton of supply out there that the market can't seem to eat up.

The Private Equity funds have a ton of cash they have raised in the last year or so. With funds like KKR and Blackstone raising 20 billion dollars each. With Leverage Loan and HY bond market pushing back that money won't go far but KKR is not going to let that cash sit in a bank account and will want to put it to work so deals will still happen. Don't think you will see the huge deals like TXU, BCE and Chrysler but deals will happen.

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Buyout boom shouls be interesting to watch. Some of the leverage levels on those deals were extremely high. Also, just a ton of supply out there that the market can't seem to eat up. The Private Equity funds have a ton of cash they have raised in the last year or so. With funds like KKR and Blackstone raising 20 billion dollars each. With Leverage Loan and HY bond market pushing back that money won't go far but KKR is not going to let that cash sit in a bank account and will want to put it to work so deals will still happen. Don't think you will see the huge deals like TXU, BCE and Chrysler but deals will happen.

Sure, there will still be deals. But tighter credit means higher interest costs (as spreads widen) and lower LTV ratios. These things hurt the return expecations on LBOs, so the private equity players can't afford to pay the kind of premiums they have been throwing around recently.Also, most private equity shops get their management fee on the money they raise whether it has been deployed or not, so they can certainly afford to sit around and wait for prices on potential targets to come in a little. Which could very well happen.
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Buyout boom shouls be interesting to watch. Some of the leverage levels on those deals were extremely high. Also, just a ton of supply out there that the market can't seem to eat up. The Private Equity funds have a ton of cash they have raised in the last year or so. With funds like KKR and Blackstone raising 20 billion dollars each. With Leverage Loan and HY bond market pushing back that money won't go far but KKR is not going to let that cash sit in a bank account and will want to put it to work so deals will still happen. Don't think you will see the huge deals like TXU, BCE and Chrysler but deals will happen.

Sure, there will still be deals. But tighter credit means higher interest costs (as spreads widen) and lower LTV ratios. These things hurt the return expecations on LBOs, so the private equity players can't afford to pay the kind of premiums they have been throwing around recently.Also, most private equity shops get their management fee on the money they raise whether it has been deployed or not, so they can certainly afford to sit around and wait for prices on potential targets to come in a little. Which could very well happen.
Definitely will hurt size of deals and premuims paid. I don't disagree. But it won't stop funds looking for returns. If premuims are less to correspond with higher borrowing costs it all even outs. What is going on now is the banks are getting killed. They don't want to hold these loans they have committed to. The Private Equity Funds are sitting pretty right now on deals they have signed up as Banks have committed financing at rates that they can't sell them to investors. PE Funds get the terms of old deals signed up in the old environment rather than what has changed in the last month. What this will all impact is the new deals. On the fees issue they do get fees based on money managed but also get returns based on returns. Siting in a bank account is not the type of returns they are looking for.
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Good summary.

U.S. Stocks Decline on Credit Concerns; Exxon, Builders FallJuly 26 (Bloomberg) -- U.S. stocks plunged the most in five months after Exxon Mobil Corp. reported earnings that missed analysts' estimates and higher financing costs threatened to spur debt defaults and slow takeovers. Exxon Mobil, the world's biggest company by market value, declined the most since February after it said production decreased, while homebuilders D.R. Horton Inc. and Beazer Homes USA Inc. retreated after reporting losses. Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., the largest U.S. banks, dragged a gauge of financial shares to a 10-month low. ``People are panicking,'' said Rick Campagna, who helps manage $3 billion at Provident Investment Counsel in Pasadena, California. ``Everyone's concerned about credit and that access to capital will be severely restricted. If that happens, nothing gets done.'' A larger-than-forecast drop in new home sales and the rise in oil prices to the highest in almost a year also weighed on stocks. The cost of credit-default swaps to insure corporate debt climbed to the highest in more than two years after a hedge fund in Australia said it won't honor requests for withdrawals and financing for two of this year's biggest leveraged buyouts was delayed. The Standard & Poor's 500 Index decreased 35.57, or 2.3 percent, to 1482.52, as of 12:53 p.m. in New York. The Dow Jones Industrial Average tumbled 287.76, or 2.1 percent, to 13,497.31. The Nasdaq Composite Index lost 60.48, or 2.3 percent, to 2587.69. All three indexes posted their steepest tumbles since the global sell-off on February 27. Government bonds rallied as investors retreated from risky assets. The yield on the 10-year Treasury note fell 12 basis points, or 0.12 percentage point, to 4.78 percent. Exxon Mobil Exxon Mobil lost $4.29 to $88.50. The company said second- quarter earnings slipped 1 percent after production and crude prices dropped. Per-share profit, which rose to $1.83 from $1.72 as buybacks reduced the amount of stock outstanding, was 13 cents below the average of 17 analyst estimates compiled by Bloomberg. D.R. Horton slid 70 cents to $16.78 after reporting its first quarterly net loss in at least a decade. The second- largest U.S. homebuilder said its loss was $2.62 a share, compared with net income of 93 cents a year earlier. Revenue fell 29 percent to $2.55 billion. Beazer dropped $1.98 to $15.06. The ninth-largest U.S. homebuilder by revenue said its third-quarter loss was $123 million, or $3.20 a share, compared with net income of $102.6 million, or $2.37, a year earlier. Revenue declined 37 percent to $761 million. Home Sales Purchases of new homes in the U.S. dropped 6.6 percent in June, the most since January, to an annual pace of 834,000 from a revised 893,000 rate the prior month that was less than previously estimated, the Commerce Department said. Economists forecast new home sales would decline to an 890,000 annual pace, according to a Bloomberg survey. D.R. Horton and Beazer collectively took $1.47 billion in charges to write down land as demand for new houses deteriorated. Six U.S. builders have reported losses of $1.74 billion this week and taken charges of $2.7 billion to write down land values as demand for new houses deteriorated. As of yesterday, earnings beat analysts' estimates at 65 percent of the 249 S&P 500 members that had reported second- quarter results. Sixteen percent have met estimates and 19 percent have missed, according to Bloomberg data. Ripple Effects The ripple effects from the housing slump cut profits at other companies. Office Depot Inc. fell $2.03 to $26.92. The world's second-largest office-supplies retailer reported a decrease in second-quarter profit as the housing slowdown and higher fuel costs caused customers to visit stores less and buy fewer items. Staples Inc., the world's largest office-supplies retailer, fell for a fifth day, losing 88 cents to $23.21. Concern takeovers are costing more to finance also pushed down stocks. About $3.07 trillion in global mergers and acquisitions helped send the S&P 500 and Dow average to records earlier this month. ``With the debt markets quickly moving to ration credit, the probability of companies being `taken out' is plummeting, in our judgment,'' wrote Merrill Lynch & Co. Chief Investment Strategist Richard Bernstein in a note. ``Equity investors should discontinue their speculation regarding takeovers.'' Buyout Loans Chrysler and Alliance Boots Plc failed yesterday to find buyers for $20 billion of loans to pay for their buyouts, leaving banks holding the debt. Cadbury Schweppes Plc, the London-based maker of Dairy Milk chocolate, may get less than the $15 billion sought for its U.S. beverage unit as two buyout groups bidding for the division struggle to arrange funding, people with knowledge of the talks said. Citigroup fell $2.41 to $46.80. Bank of America slipped 79 cents to $47.14. JPMorgan lost $1.67 to $43.60. The S&P 500 Financials Index dropped 2.9 percent to its lowest level since September 2006 as all 92 members retreated. Concerns about losses in credit markets also grew after Absolute Capital Group Ltd., an Australian hedge fund that invests in collateralized debt obligations, suspended withdrawals from two of its funds that together have about $200 million ($177 million) under management amid a rout in U.S. subprime mortgages. The Chicago Board Options Exchange Volatility Index surged 21 percent to 21.81, the highest since June 2006. Higher readings in the so-called VIX, derived from the prices paid for options on the Standard & Poor's 500 Index, indicate traders expect bigger stock-market swings in the next 30 days. Economy Watch In other economic reports, orders for U.S. durable goods excluding transportation unexpectedly fell 0.5 percent in June, after a revised 0.2 percent decrease in May, the Commerce Department said. Total bookings rose 1.4 percent, led by a jump in orders for commercial aircraft. Economists in a Bloomberg survey expected orders excluding transportation to gain 0.6 percent and total orders to climb 1.9 percent. Akamai Technologies Inc. tumbled $10.53, or 22 percent, to $36.65. The largest provider of software and services companies use to deliver Web content maintained its 2007 sales and profit forecasts, disappointing investors who expected an increase, said Kaufman Bros. analyst Sameet Sinha. Akamai's 74 new customers in the quarter fell short of Sinha's forecast of 120. Apple Inc. gained $7.74 to $145. The maker of the iPhone said sales rose 24 percent to $5.41 billion in the quarter, topping analysts' estimates of $5.32 billion. The company sold 270,000 iPhones after the device went on sale June 29, 30 hours before the quarter ended, easing concerns that it might be a disappointment. Ford Motor Co. rose 26 cents to $8.23. The second-biggest U.S. automaker posted its first quarterly profit in two years. Profit excluding some costs was 13 cents a share. Ford was expected to report a 37-cent loss, the average estimate of 13 analysts surveyed by Bloomberg. To contact the reporter on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net . Last Updated: July 26, 2007 12:56 EDT

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2Q GDP release comes tomorrow. If it comes in strong (expectation is for +3.2%) with tepid inflation, then I think the market will rebound and dismiss the sell-off this week as a temporary blip. If GDP comes in weak or inflation is hot, then we can look forward to yet more selling.

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Housing worries causing a rippling effect throughout the economy. Why is this surprising? Housing's bull run carried the US economy for the past few years, making American consumers paper wealthy and thus inducing spending both in consumer confidence and with equity withdrawals.

With RE now going in the opposite direction, and most analysts predicting it will be down through at least 2009, is it any wonder that the market is retreating?

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Housing worries causing a rippling effect throughout the economy. Why is this surprising? Housing's bull run carried the US economy for the past few years, making American consumers paper wealthy and thus inducing spending both in consumer confidence and with equity withdrawals.With RE now going in the opposite direction, and most analysts predicting it will be down through at least 2009, is it any wonder that the market is retreating?

It was more surprising to me that the market (outside of the homebuilders and few other industries) shrugged it off for so long. Strong growth outside of the US (China, India, other emerging markets, even Europe...to an extent) helped mask or mitigate the effects of the popped housing bubble.
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Housing worries causing a rippling effect throughout the economy. Why is this surprising? Housing's bull run carried the US economy for the past few years, making American consumers paper wealthy and thus inducing spending both in consumer confidence and with equity withdrawals.With RE now going in the opposite direction, and most analysts predicting it will be down through at least 2009, is it any wonder that the market is retreating?

I have said this to you before that the Housing worries are not going to put us into a recession alone. Right now they are expecting growth of 2% this year and up to 3% next year. I don't think this alone has had impact you want to think it does. Here is an article from today's WSJ journal that points out there are still shortages of contrsuction workers even with problems in housing market and that impact has not been high outside a few areas.As Guederin said tomorrow's GDP report will be interesting.Fed Survey Sees Moderate GrowthHousing Softness Spreads,But It's Offset by StrengthIn Commercial BuildingBy KELLY EVANSJuly 26, 2007; Page A2Softness in the nation's housing market is seeping into adjacent sectors of the economy, but the ill effects have been partly offset by strength in commercial construction, according to the Federal Reserve's latest survey of regional economic conditions. Many regions indicated retail sales were below expectations.The overall economy continued to expand at a moderate pace in the past six weeks, say reports compiled by the 12 regional Fed banks. The Fed typically releases the anecdotal reports, known as its "beige book," two weeks before its policy makers meet to consider interest rates.In an apparent reaction to the housing slump and rising energy prices, consumer spending rose at only a moderate pace in June and July. Many regions indicated retail sales were below expectations. Five of the 12 said sales of housing-related items, such as furniture or home-repair supplies, were weak or declining.The Richmond, Va., Fed, for instance, said furniture retailers reported slower sales, and "an executive for a home-building-supply chain [said] that weak housing-market conditions continued to damp sales and customer traffic at his stores."Manufacturing continued to expand in most regions, except for housing-related products. But producers of lumber, stone, glass, cement, appliances and furniture had particularly slow sales. Several regions reported decreased demand for mortgages and higher delinquency rates. Lenders in the Philadelphia Fed's territory said they were "unlikely" to meet their targets for the year. The National Association of Realtors, separately, said sales of existing homes in June fell 3.8%, the fourth consecutive monthly decline. Sales are at the lowest level since November 2002.But commercial and industrial lending expanded. Three of the 12 Fed districts, including the sprawling San Francisco Fed, which covers much of the West, cited strength in commercial real-estate lending. Commercial construction overall was described as "strong," "firm," "solid" and "robust." Demand for industrial space increased in four regions. Office vacancy rates and rental rates rose.The pickup in commercial construction is blamed for a shortage of skilled construction workers reported across the country. Retail, manufacturing, accounting and engineering also cited shortages, and several regions noted "significant" upward pressure on wages for high-skilled workers.Separately, the Labor Department's Quarterly Census of Employment and Wages suggested that -- contrary to some analysts' expectation -- the department's monthly job tally probably won't be revised significantly. Some analysts have suggested the labor market is weaker than the monthly figures suggest.But figures for the fourth quarter of 2006 showed a 1.6% increase from a year earlier in jobs under the more comprehensive quarterly data, which include all jobs covered by the unemployment-insurance systems. That's not much different than the 1.7% growth in monthly payroll numbers for the same period.
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Housing worries causing a rippling effect throughout the economy. Why is this surprising? Housing's bull run carried the US economy for the past few years, making American consumers paper wealthy and thus inducing spending both in consumer confidence and with equity withdrawals.

With RE now going in the opposite direction, and most analysts predicting it will be down through at least 2009, is it any wonder that the market is retreating?

I have said this to you before that the Housing worries are not going to put us into a recession alone. Right now they are expecting growth of 2% this year and up to 3% next year. I don't think this alone has had impact you want to think it does. Here is an article from today's WSJ journal that points out there are still shortages of contrsuction workers even with problems in housing market and that impact has not been high outside a few areas.
I agree that "alone", the housing worries won't put the US economy in a recession. But seeing as how housing was a leading (if not "the" leading) driver of the US economy the past 3-5 years, it's impossible to shrug off housing woes as insignificant, IMO.
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*buying opportunities ahead*CB dollar cost averaging. :lmao:

dollar cost averaging is just a way of telling you nicely you bought too soon or lost money(if it never comes around).
That's why I only buy when a stock is at its exact bottom.
I do this too. What a lot of people don't realize, though, is that you should also sell your stocks when they hit their exact peaks. You might consider adding this strategy to your own playbook. HTH.
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Wasn't there a similar thread a few months back? Didn't the Dow recoup those losses by the end of the month?There will be enough buyers in the coming weeks to erase this "market correction" by September. :lmao: Based on??

Those gains are being erased.
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*buying opportunities ahead*CB dollar cost averaging. :thumbdown:

dollar cost averaging is just a way of telling you nicely you bought too soon or lost money(if it never comes around).
That's why I only buy when a stock is at its exact bottom.
I do this too. What a lot of people don't realize, though, is that you should also sell your stocks when they hit their exact peaks. You might consider adding this strategy to your own playbook. HTH.
thx, ivan; i'll look into that. :wall:
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Wasn't there a similar thread a few months back? Didn't the Dow recoup those losses by the end of the month?There will be enough buyers in the coming weeks to erase this "market correction" by September. :thumbdown: Based on??

Those gains are being erased.
Since your market knowledge is so ###-toot, please tell us where the correction/doom and gloom low point will be. TIA.
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Wasn't there a similar thread a few months back? Didn't the Dow recoup those losses by the end of the month?There will be enough buyers in the coming weeks to erase this "market correction" by September. :shrug: Based on??

Those gains are being erased.
Since your market knowledge is so ###-toot, please tell us where the correction/doom and gloom low point will be. TIA.
No idea but the fact is that the housing bubble popped in 2005. As it slowly started deflating, money shifted to the markets. Now that the realization that the market is overvalued based on fundamentals and that the housing market is worse that origianlly thought (for those that are clueless) - (it's is even worse than they can imagine), the market will take a beating. What are you going to buy when you are in danger of losing the home you over paid for and purchased with and ARM? Everyone does not have to be in that boat for it to tip over. All I know is the #### is going to hit the fan. Have fun.
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Wasn't there a similar thread a few months back? Didn't the Dow recoup those losses by the end of the month?There will be enough buyers in the coming weeks to erase this "market correction" by September. :popcorn: Based on??

Those gains are being erased.
Since your market knowledge is so ###-toot, please tell us where the correction/doom and gloom low point will be. TIA.
No idea but the fact is that the housing bubble popped in 2005. As it slowly started deflating, money shifted to the markets. Now that the realization that the market is overvalued based on fundamentals and that the housing market is worse that origianlly thought (for those that are clueless) - (it's is even worse than they can imagine), the market will take a beating. What are you going to buy when you are in danger of losing the home you over paid for and purchased with and ARM? Everyone does not have to be in that boat for it to tip over. All I know is the #### is going to hit the fan. Have fun.
The housing bubble popped in 2005? Seems like it soared right into mid-2006 in most of the country.
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No idea but the fact is that the housing bubble popped in 2005. As it slowly started deflating, money shifted to the markets. Now that the realization that the market is overvalued based on fundamentals and that the housing market is worse that origianlly thought (for those that are clueless) - (it's is even worse than they can imagine), the market will take a beating. What are you going to buy when you are in danger of losing the home you over paid for and purchased with and ARM? Everyone does not have to be in that boat for it to tip over. All I know is the #### is going to hit the fan. Have fun.

Seemingly most of the money shifted to foreign markets. Most domestic funds are experiencing cash outflows. Agree that many value stocks are very overpriced. However, many industries are in growth mode, and the economy seems to be reaccelerating and inflation fears seem to be mitigating. At some point, the Fed will move rates lower(probably already too late) to try and help offset the housing woes. Corporate buybacks and M&A look like they are keepingthe market afloat. Money should eventually shift back to the domestic markets, and there will be fewer equities to chase, imo. August is typically a downer month and low volume. Once things stabilize, there should be a few bargains to reload with. Hopefully we get more than a 5% correction. This would setthings up for a very good fall/winter market before election season gets even more frenzied.
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Buyout boom shouls be interesting to watch. Some of the leverage levels on those deals were extremely high. Also, just a ton of supply out there that the market can't seem to eat up. The Private Equity funds have a ton of cash they have raised in the last year or so. With funds like KKR and Blackstone raising 20 billion dollars each. With Leverage Loan and HY bond market pushing back that money won't go far but KKR is not going to let that cash sit in a bank account and will want to put it to work so deals will still happen. Don't think you will see the huge deals like TXU, BCE and Chrysler but deals will happen.

I don't think this is true any more - see the article above re: Cerebus and KKR being unable to fund their Chrysler and Alliance Boots deals. Their banks probably aren't too thrilled to be stuck with that debt in the current environment. KKR has pushed back the road show for its First Data deal as well - for obvious reasons. Many of the big PE firms are pounding the pavement looking for new investors - something they haven't had to do for years. Liquidity is apparently drying up, to the surprise of none.
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*buying opportunities ahead*CB dollar cost averaging. :hifive:

dollar cost averaging is just a way of telling you nicely you bought too soon or lost money(if it never comes around).
That's why I only buy when a stock is at its exact bottom.
I just backdate my orders. It seems like securities fraud, but my GC said everyone does it, so it must be o.k.
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Fed funds now pricing in a 100% odds of a cut to 5% at the Dec 11th FOMC meeting. There's now a 50% chance being priced in that it happens earlier at the 9/18 or 10/31 meetings.

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Buyout boom shouls be interesting to watch. Some of the leverage levels on those deals were extremely high. Also, just a ton of supply out there that the market can't seem to eat up. The Private Equity funds have a ton of cash they have raised in the last year or so. With funds like KKR and Blackstone raising 20 billion dollars each. With Leverage Loan and HY bond market pushing back that money won't go far but KKR is not going to let that cash sit in a bank account and will want to put it to work so deals will still happen. Don't think you will see the huge deals like TXU, BCE and Chrysler but deals will happen.

I don't think this is true any more - see the article above re: Cerebus and KKR being unable to fund their Chrysler and Alliance Boots deals. Their banks probably aren't too thrilled to be stuck with that debt in the current environment. KKR has pushed back the road show for its First Data deal as well - for obvious reasons. Many of the big PE firms are pounding the pavement looking for new investors - something they haven't had to do for years. Liquidity is apparently drying up, to the surprise of none.
Both those deals are going to close. They have put off the public sale of bonds and syndication of the loans. Banks are forced to put up the cash on the terms they committed to which were not good enough to sell.First Data is having a lot of problems as well but some of that is related to equity portion of the deal that KKR can't sell. Either way banks will be forced to lend amounts and those deals will close whether it is with publicly sold bonds and syndicated loans or bridge loans and bank loans not syndicated out.
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And I care because???

:popcorn: I'll check my fund balances tomorrow and have a good chuckle at how much "money" (on paper) I've lost the past couple of days. Since I won't be cashing out any of those funds for another 30 years, it's really just an academic exercise.
:excited:
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Fed funds now pricing in a 100% odds of a cut to 5% at the Dec 11th FOMC meeting. There's now a 50% chance being priced in that it happens earlier at the 9/18 or 10/31 meetings.

Love to see interest rates begin to fall...... :dancingpickle:
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And I care because???

:confused: I'll check my fund balances tomorrow and have a good chuckle at how much "money" (on paper) I've lost the past couple of days. Since I won't be cashing out any of those funds for another 30 years, it's really just an academic exercise.
:D
There are only two prices that really matter. The price at which you buy, and the price at which you sell. What happens in the interim is essentially irrelevant. Because you don't know what the price will be 20 or 30 years from now, then you can't worry about that. If the price is lower now than it was, it represents a buying opportunity. Will it go lower? Who knows? But it's a better opportunity today than it was yesterday.
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Fed funds now pricing in a 100% odds of a cut to 5% at the Dec 11th FOMC meeting. There's now a 50% chance being priced in that it happens earlier at the 9/18 or 10/31 meetings.

Love to see interest rates begin to fall...... :dancingpickle:
At the close yesterday fed funds were pricing in a 44% chance of a cut at the Dec 11 meeting…..mid-day today that moved to 80% and now it’s pricing in 100%.As others pointed out earlier, the GDP report tomorrow is huge and could change these odds.
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Fed funds now pricing in a 100% odds of a cut to 5% at the Dec 11th FOMC meeting. There's now a 50% chance being priced in that it happens earlier at the 9/18 or 10/31 meetings.

And there's where you find the government finally running out of wiggle room. Start cutting rates now to stop a recession, and its only going to help drive people away from the dollar. It will only add to inflation pressures. But if their primary concern is stopping inflation, they don't cut. Hmm. What to do. Well, they know that the public blames recessions on the government. They also know the public blames inflation on BUSINESSES. You don't blame the government for high oil prices. You don't blame government for higher food prices. So, that is why, when the government has this much control over the money, and they have a problem like this, they go for creating inflation.
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Fed funds now pricing in a 100% odds of a cut to 5% at the Dec 11th FOMC meeting. There's now a 50% chance being priced in that it happens earlier at the 9/18 or 10/31 meetings.

And there's where you find the government finally running out of wiggle room. Start cutting rates now to stop a recession, and its only going to help drive people away from the dollar. It will only add to inflation pressures. But if their primary concern is stopping inflation, they don't cut. Hmm. What to do. Well, they know that the public blames recessions on the government. They also know the public blames inflation on BUSINESSES. You don't blame the government for high oil prices. You don't blame government for higher food prices. So, that is why, when the government has this much control over the money, and they have a problem like this, they go for creating inflation.
Are you living under a gold rock?
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And I care because???

:)

I'll check my fund balances tomorrow and have a good chuckle at how much "money" (on paper) I've lost the past couple of days. Since I won't be cashing out any of those funds for another 30 years, it's really just an academic exercise.

:D
There are only two prices that really matter. The price at which you buy, and the price at which you sell. What happens in the interim is essentially irrelevant. Because you don't know what the price will be 20 or 30 years from now, then you can't worry about that. If the price is lower now than it was, it represents a buying opportunity. Will it go lower? Who knows?

But it's a better opportunity today than it was yesterday.

That is great advice, unless you live and work in a mark-to-market world. For me, in addition to the price at purchase and sale, the price on Dec-31 at exactly 1:00 PM PST matters...a lot. Also, if my performance becomes too woeful on a mark-to-market basis during the year, I get fired before I have a chance to prove that I was right and it was just random volatility.
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Fed funds now pricing in a 100% odds of a cut to 5% at the Dec 11th FOMC meeting. There's now a 50% chance being priced in that it happens earlier at the 9/18 or 10/31 meetings.

Love to see interest rates begin to fall...... :dancingpickle:
At the close yesterday fed funds were pricing in a 44% chance of a cut at the Dec 11 meeting…..mid-day today that moved to 80% and now it’s pricing in 100%.As others pointed out earlier, the GDP report tomorrow is huge and could change these odds.
I suspect there is some distortion there, since people were pouring into the safety of governments in order to shed risk in equities.
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Fed funds now pricing in a 100% odds of a cut to 5% at the Dec 11th FOMC meeting. There's now a 50% chance being priced in that it happens earlier at the 9/18 or 10/31 meetings.

And there's where you find the government finally running out of wiggle room. Start cutting rates now to stop a recession, and its only going to help drive people away from the dollar. It will only add to inflation pressures. But if their primary concern is stopping inflation, they don't cut. Hmm. What to do. Well, they know that the public blames recessions on the government. They also know the public blames inflation on BUSINESSES. You don't blame the government for high oil prices. You don't blame government for higher food prices. So, that is why, when the government has this much control over the money, and they have a problem like this, they go for creating inflation.
Are you living under a gold rock?
x

It's a not so suble argument for a return to the gold standard.

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