Comments on: "Fresh credit market turmoil" http://www.nakedcapitalism.com/2008/02/fresh-credit-market-turmoil.html Sun, 22 Nov 2009 11:45:14 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Anonymous http://www.nakedcapitalism.com/2008/02/fresh-credit-market-turmoil.html#comment-4300 Anonymous Thu, 21 Feb 2008 19:49:00 +0000 http://www.nakedcapitalism.com/2008/02/fresh-credit-market-turmoil/#comment-4300 S&P 500 is 4.121% overvalued, based on 10 year treasury @ 3.763%, while S&P yield is at 7.884% (including divs) thus fair value is around 1293 for SPX. Bond yields continue to fall with earnings thus current value paid for future value is unrealistic in terms of gaining future value! Let the buyer beware, and IMHO as the recession kicks in and earnings begin to decline, the dis-connect between market valuation and reality will be driven by very pure economics and people will simply not have cash to burn on overvalued assets/securities! S&P 500 is 4.121% overvalued, based on 10 year treasury @ 3.763%, while S&P yield is at 7.884% (including divs) thus fair value is around 1293 for SPX. Bond yields continue to fall with earnings thus current value paid for future value is unrealistic in terms of gaining future value! Let the buyer beware, and IMHO as the recession kicks in and earnings begin to decline, the dis-connect between market valuation and reality will be driven by very pure economics and people will simply not have cash to burn on overvalued assets/securities!

]]> By: a http://www.nakedcapitalism.com/2008/02/fresh-credit-market-turmoil.html#comment-4275 a Thu, 21 Feb 2008 08:38:00 +0000 http://www.nakedcapitalism.com/2008/02/fresh-credit-market-turmoil/#comment-4275 With all the European and US orders sent to Japan overnight, Japan often follows trends set the previous day. So "Japan up" or "Japan down" is not always a good way of judging current market sentiment. With all the European and US orders sent to Japan overnight, Japan often follows trends set the previous day. So “Japan up” or “Japan down” is not always a good way of judging current market sentiment.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/02/fresh-credit-market-turmoil.html#comment-4273 Anonymous Thu, 21 Feb 2008 07:56:00 +0000 http://www.nakedcapitalism.com/2008/02/fresh-credit-market-turmoil/#comment-4273 Denial. The globe is in collective denial, which is really not that amazing since this whole mess was all about collusion and a lack of realistic collateral (or control) from anyone, everyone.<br/><br/> We are in a massive casino where the game continues on while an epidemic spreads from player to player, yet, new players enter, just as crispy fried players exit. Perhaps this game is played even as the casino burns down and is re-built, as if the game of synthetic derivatives shifts from virtual reality to tent cities, where a desperate need to gamble is fueled by endless streams of cheap cash infusions.<br/><br/>What is value and how do you measure that, when all our future value is synthetic? Why not play the game and ignore reality, drink more vodka and take greater risks!! Take on more debt and cut a deal for longer payments, because you will have greater cash flow in the future, bet on it!<br/><br/>Thus, what we see now is the coping and the groping and the comrades weaving themselves together into new webs of financially engineered bridges, from which they will launch new and improved risk-free derivatives -- using this very aspect of denial as a PR effort to establish a motive for cost averaging and making your bets less risky and potentially more rewarding, bet on it!<br/><br/><br/> Re: Collins et al. [18] found that those participants dealing with the Three Mile Island incident who reported greater use of emotion-oriented coping experienced fewer symptoms of emotional disturbance and stress than those participants using problem-oriented coping and denial, which is a form of avoidance. Hence, when stress is chronic, and the sources of stress are not easily changed, reappraisal-based emotional management appears to be the most effective strategy in reducing the psychological and behavioural consequences of stress. Future research should compare traumatic events that differ on degree and perceptions of controllability (e.g., natural disaster vs. MVA) on the type of coping strategy used. It seems likely that those traumatic events (perceived to be) under one's control would be more amenable to problem-oriented strategies whereas those that are not are probably more amenable to emotional-oriented and avoidant strategies such as denial.<br/><br/>See also: Every time Europe looks across the Atlantic to see the American eagle it observes only the rear end of an ostrich." -- H.G.Wells Denial. The globe is in collective denial, which is really not that amazing since this whole mess was all about collusion and a lack of realistic collateral (or control) from anyone, everyone.

We are in a massive casino where the game continues on while an epidemic spreads from player to player, yet, new players enter, just as crispy fried players exit. Perhaps this game is played even as the casino burns down and is re-built, as if the game of synthetic derivatives shifts from virtual reality to tent cities, where a desperate need to gamble is fueled by endless streams of cheap cash infusions.

What is value and how do you measure that, when all our future value is synthetic? Why not play the game and ignore reality, drink more vodka and take greater risks!! Take on more debt and cut a deal for longer payments, because you will have greater cash flow in the future, bet on it!

Thus, what we see now is the coping and the groping and the comrades weaving themselves together into new webs of financially engineered bridges, from which they will launch new and improved risk-free derivatives — using this very aspect of denial as a PR effort to establish a motive for cost averaging and making your bets less risky and potentially more rewarding, bet on it!

Re: Collins et al. [18] found that those participants dealing with the Three Mile Island incident who reported greater use of emotion-oriented coping experienced fewer symptoms of emotional disturbance and stress than those participants using problem-oriented coping and denial, which is a form of avoidance. Hence, when stress is chronic, and the sources of stress are not easily changed, reappraisal-based emotional management appears to be the most effective strategy in reducing the psychological and behavioural consequences of stress. Future research should compare traumatic events that differ on degree and perceptions of controllability (e.g., natural disaster vs. MVA) on the type of coping strategy used. It seems likely that those traumatic events (perceived to be) under one’s control would be more amenable to problem-oriented strategies whereas those that are not are probably more amenable to emotional-oriented and avoidant strategies such as denial.

See also: Every time Europe looks across the Atlantic to see the American eagle it observes only the rear end of an ostrich.” — H.G.Wells

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