Posted on 09/20/2002 5:55:07 PM PDT by rohry
It is going to snowball. The mutuals will have to sell into an already weak market.
Richard W.
money.cnn.com/2002/09/19/news/economy/imf_dollar.reut/index.htm
"IMF says U.S. dollar overvalued
Global lender says global trade imbalances have left the U.S. dollar overvalued, asks for reforms.
WASHINGTON (Reuters) - Global trade imbalances have left the U.S. dollar overvalued, are unsustainable and call for prompt reforms in the United States, Europe and Japan, a new International Monetary Fund report said.
"With the U.S. current account deficit remaining in the range of 4 percent of GDP, an historical record, there is continuing concern that the dollar may be overvalued," the IMF said in its semiannual World Economic Outlook, issued Wednesday.
But the risk to the global economy goes beyond the U.S. position alone. The report said the imbalances between nations with surpluses, notably the euro area and Japan, and deficit countries like the United States, have "risen to levels almost never seen in industrial countries in the post-war era."
Perhaps more worrying, the IMF research suggested the situation could worsen in the coming years and concluded that the existing imbalances were unlikely to be viable.
It also said the possibility of a disorderly correction cannot be ruled out -- something that could produce a sharp correction in exchange rates among major currencies and a steep decline in global economic activity..."
"the Achilles heel of this blue shoe bank." ...what the heck is a blue shoe bank?...is he referring to the bank's pedigree as in Morgans, Rockefellers and Park Ave?......I always heard it was blue stocking or silk stocking...also on the above derivatives chart what is the "notional amount"...does that mean the actual amount?....Warren Buffett referred to derivatives as sewage...from the chart it looks like the septic tank needs pumping out....
Good luck to everybody!! Stonewalls
My friend has told me to stop sending him CSCO prices. He continues to buy on a payment plan and he will not sell. He won't sell no matter what. How many people like him are out there? How does this affect the aggregate market psychology? His "VIX" is zero, I can tell you that.
The price of CSCO will have to be cut in half and earnings will have to double to get the P/E down to 12. But on Yahoo it says earnings are predicted to more than double (0.25->0.57). That means the stock will have to fall to $7 to be considered cheap, assuming P/E of 12 is cheap.
My question is: if he and others like him never sell out, the market will never reach a bottom, nor will it rise, it will just languish forever while my friend keeps waiting for the long run. Is he just ruining it for the rest of us?
Each time I consider bailing out I look at a few facts: (1) my 401 is heavily weighted to money market because I started with a conservative weighting. (2) I have watched the market slide a large percentage and it doesn't seem worth the time and effort to bail now.
So my question remains, how will the market bottom out if lazy people like me never sell?
Hmmm...that sounds like thats one more good reason to get yourself out of debt! At least thats the way I'm reading it.
Wouldn't a tax deduction only apply to losses outside of retirement plans, and only kick in if stocks were sold at a loss? I can't see how that would help those who lost value in 401Ks or other retirement plans.
The price of the stock is the last price someone paid per share. So, if people were only willing to pay a really small amount of money for stocks, the value of your stock would keep going down while it sat there.
It's like anything else you own and might decide to sell. Shares of stock only translate to cash if someone is willing to buy them.
Probably continuing to buy equities at this time isn't the most conservative thing to do. If someone wants to hold what he has already, even though stock certificates are down in the paper towel valuation range, fine, someday the companies that survive will come back. Whether your friend and others who think that way are delaying the final bottom or something like that, well, earnings reports have more effect.
That would be another way of doing tax cut, I guess. But if the potential deduction is bigger than whatever current income you have, does IRS give you a tax refund to make up the difference ? Do you happen to know the details ?
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