you again fail to look at the debt side of the equation
tech companies were flush with cash and could survive the fall
and were growing at insane rates which is why they were trading at astronomical p/es
people stuipidly thought the growth would continue but it didn't
amzn which i'm short has a 90 p/e right now!! not much has changed
well tech was just one sector and it blew up valuations across the board
the consumer and jobs were able to weather a tech mania collapse (plus it wasn't allowed to fully deflate with credit mania of the past 5 years)
this time around everybody across the board on wall street is gonna feel the pain
because the consumer (75% of our economy) is now entrapped in bad debt, housing etc..and will die
plus globally many countries are very dependent on our consumption and will have massive overcapacity if we fall on our face
its just slowly spills into everything
also historically viscous bear markets typically end with p/es in the single digits
i've been of the opinion for a long time that a secular bear market started in 2000 (average lifespan 17 years)
and last 5 years will ulitimately make matters worse as we entrapped alot of consumers and companies in bad debt
so many companies trading on the bond market as junk right now (that wasn't the case prior to the tech bubble collapse companies were in good standing as far as debt obligations and cash go)
if you mean fine in that
they will survive to live another day yeah your right
but they will be going lower with everything else
alot of mid caps, small caps will go belly up
on the tech front and consumer front there is so much overcapacity, many companies will go under before its all said and done
usd:yen sub 106
japan in deep doggie doo doo
also MIMS know anything about yen carry trade?
this yet another piece of the big pyramid scheme (on the global scale) that is unraveling as we speak
also MIMS now that we are a global economy you have to look at it as such
you have banks in china trading at p/es of 50 and such
india and china if i had to guess have average p/es runnign in the 30's and 40's across the board like the us did during the tech boom
japan in deep doggie doo doo
also MIMS know anything about yen carry trade?
this yet another piece of the big pyramid scheme (on the global scale) that is unraveling as we speak
also MIMS now that we are a global economy you have to look at it as such
you have banks in china trading at p/es of 50 and such
india and china if i had to guess have average p/es runnign in the 30's and 40's across the board like the us did during the tech boom
japan gonna open down big again after 500 pt haircut on monday, due to the fact that matters got worse in europe after asia closed
main question here is do these asia markets rebound off their lows at open or keep going down
aussies down 4% now, they were down 3% on monday
gold continues to get mauled, further rally in USD
main question here is do these asia markets rebound off their lows at open or keep going down
aussies down 4% now, they were down 3% on monday
gold continues to get mauled, further rally in USD
Stocks Plummet in Germany, Hong Kong and India in Global Rout
By Sarah Thompson
Jan. 21 (Bloomberg) -- Stocks tumbled from Hong Kong to Brazil, and U.S. futures posted their steepest drop since 2001, on mounting speculation the world economy is slowing and company defaults will rise.
The MSCI World Index slumped the most since 2002, while Europe's Dow Jones Stoxx 600 Index sank 5.7 percent, pushing it into a bear market as Allianz SE and BNP Paribas SA slid. Hong Kong's Hang Seng Index had its biggest drop in six years after BNP Paribas said Bank of China Ltd. may write down overseas securities by $4.8 billion because of losses from U.S. subprime mortgages. Citigroup Inc. retreated in Frankfurt.
``It's the worst I've ever seen,'' said Johan Stein, who helps manage the equivalent of about $14 billion at Nordea Asset Management in Stockholm. ``The financial system is in terrible shape, and no one knows where this will end.''
The MSCI World slipped 3 percent to 1,395.29 at 5:38 p.m. in New York, extending its decline from an Oct. 31 record to 17 percent. India's Sensitive Index lost the most since 2004, while Germany's DAX had its biggest loss since 2001. Futures on the Standard & Poor's 500 Index sank 4.5 percent. Trading in the U.S. is closed today for Martin Luther King Day.
Today's declines follow the worst week for U.S. stocks in five years after President George W. Bush's $150 billion plan to revive the economy and expectations of interest-rate cuts failed to allay recession concerns.
The risk of European companies defaulting soared to a record today on speculation credit-rating cuts at bond insurers including Ambac Financial Group Inc. may trigger forced asset sales. European Central Bank council member Nout Wellink said economic growth in the region may slow more than policy makers had expected.
Market Crisis
``This is a stock-market crisis,'' said Alberto Roldan, head of research at Inverseguros SVB in Madrid. ``Investors believe that neither a government package nor a huge rate cut is going to help evade a recession in the U.S.''
White House spokesman Tony Fratto said in Washington today the government doesn't comment on daily market moves.
``We're confident that the global economy will continue to grow, and that the U.S. economy will return to stronger growth,'' Fratto said in an e-mailed message.
The Stoxx 600 slid 5.7 percent, extending its drop from a 6 1/2-year high on June 1 to 23 percent. A decline of more than 20 percent is the common definition of a bear market. France's CAC 40 lost 6.8 percent. The U.K.'s FTSE 100 sank 5.5 percent, and Germany's DAX slid 7.2 percent.
Volatility Climbs
The VDAX-New Index, a benchmark gauge of European stock- market volatility, surged as much as 39 percent, the most since 2001. The measure of expected price swings for stocks is derived from prices paid for options on Germany's DAX.
The MSCI Asia Pacific Index lost 3.8 percent. Australia's S&P/ASX 200 Index slumped for an 11th day. Hong Kong's Hang Seng Index lost 5.5 percent. Japan's Nikkei 225 Stock Average dropped 3.9 percent as the Finance Ministry cut its evaluation of five of 11 regional economies as housing investment fell and employment worsened.
The MSCI Emerging Markets Index, a global benchmark, sank 5.9 percent, extending its retreat from an October record to 20 percent. At least 36 countries around the world have fallen into bear markets, according to Bloomberg data.
Brazil's Bovespa index slid 6.6 percent, the most since Feb. 27. Russia's Micex Index declined 7.5 percent, the biggest drop since June 2006.
Canada's Standard & Poor's/TSX Composite Index had the biggest drop since February 2001, falling 4.8 percent.
Allianz, Europe's biggest insurer, tumbled 9.1 percent to 120 euros. BNP Paribas, France's second-largest bank, sank 9.6 percent to 62.71 euros. ING Groep NV, the biggest Dutch investment bank, declined 10 percent to 20.99 euros.
`Sharp Contraction'
``The market is finally catching on to the fact that a recession will lead to a sharp contraction in earnings,'' said Jane Coffey, head of equities at Royal London Asset Management, where she helps oversee about $11 billion. ``We need to see more aggressive changes to forecasts before investors become more positive about looking through the downturn.''
Swiss Reinsurance Co. decreased 10 percent to 68.7 Swiss francs. UBS AG cut its share-price estimate for the world's largest reinsurer to 80 francs from 88, citing the probability of more investment losses related to credit-market problems.
``We see on-going downside risk to earnings and stock performance until we have better visibility,'' London-based analysts including Ben Cohen wrote in a report to investors.
Bank of China
Bank of China, which has the largest holdings among Asian banks of U.S. subprime mortgages, slid 6.4 percent to HK$3.37. The bank may write down 17.5 billion yuan ($2.4 billion) for the fourth quarter of 2007, and an equal amount for this year, Dorris Chen, a Shanghai-based analyst at BNP Paribas wrote in a note on Jan. 18.
Commonwealth Bank of Australia, the country's second- largest bank, dropped 4.6 percent to A$50.78. National Australia Bank Ltd., the nation's largest, declined 2.9 percent to A$35.20.
Morgan Stanley raised its 2008 forecast for loan-loss charges at the country's major banks by 26 percent, analyst Richard Wiles wrote in a note today, citing a deteriorating global economy and ``the difficulty faced by some companies in refinancing maturing debt.''
Citigroup, the biggest U.S. bank by assets, dropped 5.3 percent to $23.16 in Frankfurt. JPMorgan Chase & Co., the second-largest U.S. bank by market value, slid 5.4 percent to $37.45, also in Frankfurt trading.
The slump has made stocks cheap by historical standards. Europe's Stoxx 600 is valued at 10.8 times its companies' profits, the lowest since at least 2002, according to data compiled by Bloomberg. The 1,953-member MSCI World has a price- earnings ratio of 14.1, the cheapest since at least 1998.
Rio Tinto
Rio Tinto Group, the world's third-biggest mining company, dropped after BHP Billiton Ltd. failed to make a new offer. Rio, defending a hostile $108 billion takeover bid from rival mining company BHP, fell 10 percent to 4,228 pence.
BHP may not make a new offer before the Feb. 6 deadline set by the U.K.'s Takeover Panel, the London-based Times newspaper reported. The BHP board has not met to discuss a new bid, the newspaper said, after its initial three-for-one all share offer in November was rejected.
Samantha Evans, a BHP spokeswoman in Melbourne, declined to comment. Rio spokeswoman Amanda Buckley also declined to comment.
By Sarah Thompson
Jan. 21 (Bloomberg) -- Stocks tumbled from Hong Kong to Brazil, and U.S. futures posted their steepest drop since 2001, on mounting speculation the world economy is slowing and company defaults will rise.
The MSCI World Index slumped the most since 2002, while Europe's Dow Jones Stoxx 600 Index sank 5.7 percent, pushing it into a bear market as Allianz SE and BNP Paribas SA slid. Hong Kong's Hang Seng Index had its biggest drop in six years after BNP Paribas said Bank of China Ltd. may write down overseas securities by $4.8 billion because of losses from U.S. subprime mortgages. Citigroup Inc. retreated in Frankfurt.
``It's the worst I've ever seen,'' said Johan Stein, who helps manage the equivalent of about $14 billion at Nordea Asset Management in Stockholm. ``The financial system is in terrible shape, and no one knows where this will end.''
The MSCI World slipped 3 percent to 1,395.29 at 5:38 p.m. in New York, extending its decline from an Oct. 31 record to 17 percent. India's Sensitive Index lost the most since 2004, while Germany's DAX had its biggest loss since 2001. Futures on the Standard & Poor's 500 Index sank 4.5 percent. Trading in the U.S. is closed today for Martin Luther King Day.
Today's declines follow the worst week for U.S. stocks in five years after President George W. Bush's $150 billion plan to revive the economy and expectations of interest-rate cuts failed to allay recession concerns.
The risk of European companies defaulting soared to a record today on speculation credit-rating cuts at bond insurers including Ambac Financial Group Inc. may trigger forced asset sales. European Central Bank council member Nout Wellink said economic growth in the region may slow more than policy makers had expected.
Market Crisis
``This is a stock-market crisis,'' said Alberto Roldan, head of research at Inverseguros SVB in Madrid. ``Investors believe that neither a government package nor a huge rate cut is going to help evade a recession in the U.S.''
White House spokesman Tony Fratto said in Washington today the government doesn't comment on daily market moves.
``We're confident that the global economy will continue to grow, and that the U.S. economy will return to stronger growth,'' Fratto said in an e-mailed message.
The Stoxx 600 slid 5.7 percent, extending its drop from a 6 1/2-year high on June 1 to 23 percent. A decline of more than 20 percent is the common definition of a bear market. France's CAC 40 lost 6.8 percent. The U.K.'s FTSE 100 sank 5.5 percent, and Germany's DAX slid 7.2 percent.
Volatility Climbs
The VDAX-New Index, a benchmark gauge of European stock- market volatility, surged as much as 39 percent, the most since 2001. The measure of expected price swings for stocks is derived from prices paid for options on Germany's DAX.
The MSCI Asia Pacific Index lost 3.8 percent. Australia's S&P/ASX 200 Index slumped for an 11th day. Hong Kong's Hang Seng Index lost 5.5 percent. Japan's Nikkei 225 Stock Average dropped 3.9 percent as the Finance Ministry cut its evaluation of five of 11 regional economies as housing investment fell and employment worsened.
The MSCI Emerging Markets Index, a global benchmark, sank 5.9 percent, extending its retreat from an October record to 20 percent. At least 36 countries around the world have fallen into bear markets, according to Bloomberg data.
Brazil's Bovespa index slid 6.6 percent, the most since Feb. 27. Russia's Micex Index declined 7.5 percent, the biggest drop since June 2006.
Canada's Standard & Poor's/TSX Composite Index had the biggest drop since February 2001, falling 4.8 percent.
Allianz, Europe's biggest insurer, tumbled 9.1 percent to 120 euros. BNP Paribas, France's second-largest bank, sank 9.6 percent to 62.71 euros. ING Groep NV, the biggest Dutch investment bank, declined 10 percent to 20.99 euros.
`Sharp Contraction'
``The market is finally catching on to the fact that a recession will lead to a sharp contraction in earnings,'' said Jane Coffey, head of equities at Royal London Asset Management, where she helps oversee about $11 billion. ``We need to see more aggressive changes to forecasts before investors become more positive about looking through the downturn.''
Swiss Reinsurance Co. decreased 10 percent to 68.7 Swiss francs. UBS AG cut its share-price estimate for the world's largest reinsurer to 80 francs from 88, citing the probability of more investment losses related to credit-market problems.
``We see on-going downside risk to earnings and stock performance until we have better visibility,'' London-based analysts including Ben Cohen wrote in a report to investors.
Bank of China
Bank of China, which has the largest holdings among Asian banks of U.S. subprime mortgages, slid 6.4 percent to HK$3.37. The bank may write down 17.5 billion yuan ($2.4 billion) for the fourth quarter of 2007, and an equal amount for this year, Dorris Chen, a Shanghai-based analyst at BNP Paribas wrote in a note on Jan. 18.
Commonwealth Bank of Australia, the country's second- largest bank, dropped 4.6 percent to A$50.78. National Australia Bank Ltd., the nation's largest, declined 2.9 percent to A$35.20.
Morgan Stanley raised its 2008 forecast for loan-loss charges at the country's major banks by 26 percent, analyst Richard Wiles wrote in a note today, citing a deteriorating global economy and ``the difficulty faced by some companies in refinancing maturing debt.''
Citigroup, the biggest U.S. bank by assets, dropped 5.3 percent to $23.16 in Frankfurt. JPMorgan Chase & Co., the second-largest U.S. bank by market value, slid 5.4 percent to $37.45, also in Frankfurt trading.
The slump has made stocks cheap by historical standards. Europe's Stoxx 600 is valued at 10.8 times its companies' profits, the lowest since at least 2002, according to data compiled by Bloomberg. The 1,953-member MSCI World has a price- earnings ratio of 14.1, the cheapest since at least 1998.
Rio Tinto
Rio Tinto Group, the world's third-biggest mining company, dropped after BHP Billiton Ltd. failed to make a new offer. Rio, defending a hostile $108 billion takeover bid from rival mining company BHP, fell 10 percent to 4,228 pence.
BHP may not make a new offer before the Feb. 6 deadline set by the U.K.'s Takeover Panel, the London-based Times newspaper reported. The BHP board has not met to discuss a new bid, the newspaper said, after its initial three-for-one all share offer in November was rejected.
Samantha Evans, a BHP spokeswoman in Melbourne, declined to comment. Rio spokeswoman Amanda Buckley also declined to comment.
Tizzy and Woofy will be rolling in the dough tomorrow.
At least a few on this board can profit from all of this mess. DOW 10k should be broken by next Friday at the current rate of freefall. I think the worse thing that could happen is an emergency rate cut. The Fed just needs to let it all play out on its own and let the markets take care of themselves wheter it's DOW 10k, DOW 5k or DOW 2k. It's going to be a lot of craziness tomorrow and I hope Erin is on CNBC because I like to look at her.
At least a few on this board can profit from all of this mess. DOW 10k should be broken by next Friday at the current rate of freefall. I think the worse thing that could happen is an emergency rate cut. The Fed just needs to let it all play out on its own and let the markets take care of themselves wheter it's DOW 10k, DOW 5k or DOW 2k. It's going to be a lot of craziness tomorrow and I hope Erin is on CNBC because I like to look at her.
