www.CostaRicaTicas.com

Tell tell day tomorrow in NY!

Stock markets around the world crashed and from what I've read, they seem to think NY will sell off as well. 2008 is going to be very interesting.

The dollar is up! This is what I've been expecting. When the world falls, investors, IMO look to the USA (the dollar and bonds) as a safe place to sit on the sidelines.

How low with the DJIA go? 10000?

There is a lot uncertainty that is driving the markets downward. They may go lower, they may go much lower.

From my perspective that is just opportunity knocking. The fundamentals of the stock market are not bad. Earnings are holding up and prices are going down. These are the conditions that smart investors look for. Many stocks are very cheap right now compared to their earnings. No one should try to catch a falling knife, but at some point this uncertainty in the market will clear out and there are going to be great buying opportunities.

Bottoms are impossible to predict, but they are not so hard to spot. The key is to watch for the "capitulation". When everyone throws in the towel you know. There will be a huge sell off with high volume of trading. This is a usually the point where markets hit a bottom.

It is counterintuitive, but true, that one of the most positive signs for a stock market is for everyone to be pessimistic. It is pessimism that will drive prices to the bottom. Once the bottom is reached, there is only one direction to go in.

I am waiting on the sidelines. I have my list ready to go.

I wonder why everyone seems to have chosen the day the USA markets are closed to sell off. Perhaps to circumvent the automatic controls in NY. I am really not sure, maybe someone with insight can chime in. Maybe I am just paranoid

The amount of over the counter derivatives that the worlds institutions are holding totals over 450 TRILLION, they are all pretty much worthless now (no way to sell them) and any company that is holding them has lost that money. The GNP of the USA is only 11-13 trillion! the sub prime mess is just the tip of the iceberg.

Buy the cheapest type of gold that the government cant confiscate (pre 33 gold swiss francs, pre 33 British sovereigns or non high collector value pre 1933 US gold coins)

Paper gold is not trustworthy, as much of it doesn't have any gold behind it.

According to Jim Sinclair jsmineset.com We are going into A depression that will make 1929 look like a walk in the park. In case you don't know who jim Sinclair is, Forbes magazine in 2001 did an article on him, giving him credit for calling both the low price AND the high price for gold in the eighties. People who followed his advice back the more than tripled their money.
Jim Sinclair also got the Hunt Brothers out of billionaire bankruptcy when they tried to take over the silver market, by arranging a billion dollar loan from the head of the federal reserve.




Posted On: Monday, January 21, 2008, 2:32:00 PM EST

Emergency Action Required Immediately To Prevent Public From Joining The Panic Tomorrow

Author: Jim Sinclair




Dear CIGAs,

This is it.

The DJII futures are down over 500 points.

If the Federal Reserve fails to take emergency action before the US opening tomorrow, you will see the DJII open down 1000 points as the public joins this professional panic.

Everything you see happening is contained in the Formula, which will be the catalyst that takes gold again above $887.50 and to $1650.

As long as you have followed my plea to have NO MARGIN on anything gold I see no problems.

If you have margin the rule is never meet a margin call, but sell whatever is needed to meet the call or more, never less.

It is a better wager that the Fed will immediately drop rates by 1 full percentage point.

It is a slam dunk that all Western central banks will cut loose and flood the world with more liquidity than ever seen before.

If central banks fail to cause a torrent of liquidity from their unending check books then $450 trillion of derivatives will take us to the world of Mad Max.

Monetary inflation ALWAYS causes PRICE inflation even without strong business conditions.

Prices of hard and transportable assets rise regardless of business conditions.

All currencies fall and the stronger currency is the laggard in the race to the bottom of the tank.



Stocks Plummet in Germany, Hong Kong, India, Brazil in Rout
By Sarah Thompson

Jan. 21 (Bloomberg) -- Stocks plunged in Germany, Hong Kong, India and Brazil, and U.S. index futures dropped on mounting speculation that the global economy is slowing and company defaults will rise.

Europe's Dow Jones Stoxx 600 Index fell the most since the Sept. 11 terrorist attacks and sank 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.

The MSCI World Index slipped 2.4 percent to 1,402.75 at 2:44 p.m. in London, extending its decline from an Oct. 31 record to 17 percent. India's Sensitive Index lost the most since 2004, while Germany's DAX slid the most since March 2003. Futures on the Standard & Poor's 500 Index sank 3.4 percent. Trading in the U.S. is closed today for Martin Luther King Day.

``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.''

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TSX down 620........lock and load .......it's going to be fun tuesday

I think they are anticipating that the fundamentals are about to get whacked.

It is an exciting and scary time to be investing. I would not feel comfortable buying anything - gold or stocks. I don't know anything about bonds (should do some research - probably better than being in a MM fund).

I don't think any kind of economic package is going to do any good whatsoever. The US gov't has spent way too much, the subprime mess, stock market has been up since 2003 or so.... time for a major pull back it seems.

Tomorrow should be interesting.

_________________
"The only normal people are those you don't know very well." Joe Ancis

Posted On: Monday, January 21, 2008, 10:27:00 PM EST

A 1000 Point Drop: The Clock Is Ticking

Author: Jim Sinclair




Dear CIGAs,

If the equity markets cannot be calmed before opening tomorrow, Tuesday, January 22nd, you will witness the greatest financial crisis of all time. So far the Chairman of the Fed and the President bombed out as badly as one could. This necessitates Herculean measures in order to prevent the Dow from opening down 1000 points tomorrow morning. If that was to occur, I assure you the Four Horsemen will have ridden down Wall Street.

The derivative dealers have killed us all to some degree.

Present circumstances could result in President Bush's economic performance going down in history as far worse than President Hoover's.

Present circumstances could result in there not being a Republican in high office for many generations to come.

Present circumstance could result in Chairman Bernanke going down in history as the most inept Fed Chairman since the Fed was invented. Greenspan will silently sneak away.

Present circumstances could result in a financial world akin to Mad Max and the Day After.

Remember Michael Milkin?



From Wikipedia, the free encyclopedia:

Michael Robert Milken (born July 4, 1946 in Encino, California) is an American financier best known as the "Junk Bond King" of 1980s era Wall Street and the biggest player in the insider trading scandals of 1980s. He was highly influential in developing the market for junk bonds (a.k.a. "high-yield debt") during the 1970s and 1980s, which in turn fueled the 1980s boom in corporate raids and hostile corporate takeovers. He has been called both a financial innovator and the epitome of 1980s Wall Street greed.

Milken was indicted on 98 counts of racketeering and securities fraud in 1989 as the result of an insider trading investigation. After a plea bargain, Milken pled guilty to six securities and reporting violations. He was sentenced to ten years in prison, but was released after less than two years. He then launched a public relations campaign to highlight his role as a financial innovator, particularly with regard to popularizing higher-risk alternative investments. He also devoted much time and money to charity over the past three decades. With an estimated net worth of around $2.1 billion as of 2007, he is ranked by Forbes magazine as the 458th richest person in the world.[1]



Jim Sinclair’s Commentary

Michael Milkin really was not a bad guy. Since this situation he has done many sincere positive things. He was more than likely a patsy for the need to punish someone the last time junk bonds busted.

I would strongly suggest that anyone who ever sat on an over the counter derivative trading desk immediately get all their money wired to bank accounts in countries lacking extradition treaties with the country of their evil deeds. They might even consider Mexico because they will not extradite to a country in question that has the death penalty and that may just be potential outcome when convicted.

The Chinese know how to handle those that kill others in the process of following blindly in the path of their greed. They execute them. Not a bad idea for the OTC derivative gang that had to know those rotten pieces of paper would never work.

Mortgage market recovery hinges on investors
Credit market needs confidence restored
Originally posted on January 20, 2008

The financial crisis we are currently in will probably enter the U.S. record book as the second worst in the last 100 years. The worst was in the early 1930s when thousands of banks failed and the mortgage market shut down entirely. It has not shut down this time, thanks in large part to federal institutions created during the '30s to deal with that crisis.

The housing finance system is really two overlapping systems that exist side by side. One system consists of portfolio lenders, mostly depository institutions, which hold the mortgage loans they originate. The portfolio system was the larger part of housing finance prior to the savings-and-loan crisis of the 1980s, but gradually lost ground thereafter.

The other system consists of temporary lenders who either sell loans in the secondary market to firms that securitize them or resell to still other firms that securitize them. Securitization means placing mortgages in a pool and issuing mortgage-backed securities (MBS) against the pool. This secondary market system began in the early 1970s and grew at the expense of the portfolio system - until the recent crisis.

The crisis originated in the subprime segment of the secondary market system, and quickly spread. The crux of the crisis is a loss of confidence by the investors who purchase MBS, and their retreat to the sidelines. When investors stop buying, the secondary market system grinds to a halt.

One part of the secondary market system, however, has continued to function more or less normally. This is the "conforming loan" market, which covers loans no larger than $417,000 that meet the eligibility requirements of Fannie Mae and Freddie Mac. Investors have retained their confidence in the two federal agencies, which they assume would be supported by the federal government if that became necessary. Hence, they continue to purchase the MBS issued and insured by the agencies.

The crisis has also reenergized the portfolio system. Portfolio lenders have raised additional funds from channels unaffected by the crisis: by selling certificates of deposit, which are insured by the Federal Deposit Insurance Corp., and by borrowing record-breaking amounts from the Federal Home Loan Bank system. The banks raise money by selling bonds, and like Fannie and Freddie, they continue to enjoy the confidence of investors.

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The market tends to overshot on everything, to the upside and to the downside. There are a lot of offsetting factors in our economy to the housing mess. More people are working, productivity is going up, exports are booming. We are through with most of the big write offs by the financial institutions, I just don't see where all the weakness is going to come from looking forward. The rest of the economy has held up pretty well through the worst part of this mess. It would be different if we were seeing massive layoffs in other sectors of the economy, but that is not happening. Just the opposite, more people are working, which means more money circulation in the economy inspite of the problems with the housing industry.

The interesting thing is that the financial stocks have started to stablize. I don't think we are at the end of this mess, but the worst seems to be behind us.

Before we get too carried away with talk about recession and depression, there are no clear indicators that we are even in a recession. There is a lot of debate among economist that we will even have a recession. My understanding is that the consensus among economists is that there is about a 50% chance of recession. Nothing to sneeze at, but lets not get ahead of ourselves.

It is certainly a good time to be sitting on the sidelines, no doubt about that.

You are right KC, nothing has fallen apart in a major way really (except housing).

I've always thought that if anyone or anything gives Wall Street a reason to sell, they are happy to do it. I feel they look for any excuse to sell just so that they can buy in again at a lower price, then run the market back up, then start looking for reason to sell again. Wide swings make people in the know a lot of money. Why sell off because Iran picked gave the finger to the world one day and two days later they are buying in again? Why sell off when the overall fundamentals don't change every time Iran and the like pick their nose? Know what I mean?

As of late, there has been enough happening in the economy to give them reason to sell, but they have to over do it so the gains are that much better on the way up again.

Even though we aren't in a recession yet, I think a lot of people are expected a recession just for the mere fact that there hasn't been one lately. It seems they want to force feed us a recession, because they think it is time for it.

I expect that the market will be down for quite a while no matter exports, high productivity, jobs or good earnings.

Like Bilko said, tomorrow will be interesting.

Looks like the U.S. Stock Market's taking a hit today!

_________________
You ALWAYS have an option ....... "NEXT" !!!

Watch for a spike in the volume of the trading to signal a change in direction. If there is a huge spike in volume on a day when the market moves dramaticly one way or the other, this is a fairly reliable sign of a top or a bottom.

Well.... we're only 25 minutes into trading, and it's already starting to turn around. I see that the Fed has just cut interest rates another 3/4 of a point. Let's see what happens now!

_________________
You ALWAYS have an option ....... "NEXT" !!!

Rate cut is one dose of good news, but then it is followed by double doses of bad news. These days, a rate cut just isn't the shot in the arm that it used to be... DJIA down 190 at the moment. Rocky road ahead.... put your seat belt on....

Apple reports this week, if they don't do well..... yikes! They have all the hip products so if their sales are down watch out.

You know what is really interesting about today? Look who the biggest stock winners are today:

Top Percentage Gainers

MBI MBIA Inc 36.7%
ABK AMBAC Financial Gr... 33.1%
CC Circuit City Stores Inc 16.5%
KEY KeyCorp 13.3%
MTG MGIC Investment Corp 9.8%

Mostly Financial Companies!!! What does that tell you about the financial "crisis"?

Very interesting!