Posted on 10/07/2007 9:53:39 AM PDT by GodGunsGuts
By Satyajit Das
Credit Crunch The New Diet Snack for Financial Markets
September 5, 2007
**Satyajit Das works in the area of financial derivatives and risk management. He is the author of a number of key reference works on derivatives and risk management and is the author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives (2006, FT-Prentice Hall).
Living in the Kaliyuga
Inflexion points in financial markets are difficult to identify. As Yogi Berra observed: making predictions is difficult, especially about the future.
In Indian mythology, we are in the Age of Kali - the last age. The world ends when Kali dances the dance of death. There are no such clear markers in markets. Recently, we came close - Jim Cramer, a CNBC pundit, launched a were in Armageddon tirade on air. Embattled Bear Stearns CFO Samuel Molinaro pleaded: Ive been out here for 22 years, and this is as bad as Ive seen it in the fixed-income markets. Kali had begun to shake her booty. The credit bubble was finally deflating.
In 2007, householders in cabbage-ville USA (an English fund managers term) failed to make repayments triggering a global credit crisis. Markets ruminated about a re-pricing of risk. The faux business as usual calm masked the fact that the problems threaten to be the single largest credit crisis since the Savings and Loans collapse in the USA in the 1980s.
The early 2000s were a period of too much and too little too much liquidity, too much leverage, too much complex financial engineering, too little return for risk, too little understanding of the risks....
(Excerpt) Read more at prudentbear.com ...
Credit/Mortage/Housing ping
If you want on or off this ping list, freemail me.
Please freepmail some you like. I have a not too bright friend who bought (few hundred thou) lots of Homestake and Placer 17 years ago. Never sold any. He’s a Democrat
Sorry, left out that they are charts showing the appreciation of an initial $10,000 investment.
Whenever the multinationals want Congress to change the playing field, it isn't because they have the individual's best interests at hear.
Cheers!
In your Zeal article post he writes that mines will save their best ore grades for leaner times. I’ve read where in times with the prospect of much higher gold prices mines will save their best ores for much greater profit at higher POG.
My wife works for Oppenheimerfunds so I didn’t have a choice for a gold mutual fund since their 401k’s only have available their own mutual funds for purchase. Their gold fund, OPGSX, has done very well. We don’t have pay an upfront 5.7% sales fee. Here’s a performance chart for USERX, BGEIX, and OPGSX. Just for your information.
http://stockcharts.com/charts/performance/perf.html?userx,bgeix,opgsx
I figure if you know Zeal you also know Jim Sinclair. The best to you and your investing. Things sure are looking good now for gold.
bump
“Lord knows I’m no financial genius. But that triangle looks very, very scary.”
The biggest worry is the derivatives, which are unregulated and mostly untested by a serious downturn.
Sorry about that. Stock symbols in parenthesis belonged in the next sentence. Ooops!
No reason to be sorry it’s a good article. My post should have said “Bump to re-read later with a full pot of coffee”.
Thanks GGG. My money is on gold until I think it’s played out, a long time from now, 10 to 15 years?
I took another look at the performance charts from stockcharts and yahoo and all 3, including yours, show different performances. I discount yahoo tremendously.
http://finance.yahoo.com/q/bc?t=my&s=OPGSX&l=on&z=m&q=l&c=userx
6 months ago I was eyeballing USERX and wishing I had a crack at getting into that fund. OPGSX has very little precious minerals in it but then again they are very opaque on what they have in their funds. All the top 10 holdings are gold stocks. I do like the idea of a gold only fund.
Waiting on a dip.
Yep is right Whiskers look out for yours so you don’t all get whisked away. And I’ll do so for mine!
Check out VGPMX. A pain to get into but has very good in and out and very good track record. In fact it is not closed even though it says so. Open to Flagship members. Freepmail if you need more
Yeah Jim Sinclair. First came across him in 1980. He used to be on Wall St Week/Louis Rukeyser
Remember those primitive days? James Sinclair was a real gold bug. He was a vegetarian. When gold started eating sh!t about 1986 he went a bit nuts and ate his first steak in years. No lie!
We dont have pay an upfront 5.7% sales fee
____________
I would and I looked at them. With no fee it’s very very solid from what I’ve looked at
later
YTD on these are terrible. In negative territory
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