Stock market collapse in October

[TimberWolf]

Incorrect. They're making money hand over fist. In fact when the stock market goes down, I expect banks to do relatively well.
After all as everyone knows they only have an upside and can't be allowed to fail.

HTH

The first people to realise that must have made a mint, or at least placed a heads-I-win-tails-I don't-Lose punt. Probably too late now. All seems so obvious now...

[sasguru]

The first people to realise that must have made a mint, or at least placed a heads-I-win-tails-I don't-Lose punt. Probably too late now. All seems so obvious now...

I made a mint on Barclays and a couple of other banks back in Feb. Plus I remember telling everyone at the time.

[ThomasSoerensen]

The first people to realise that must have made a mint, or at least placed a heads-I-win-tails-I don't-Lose punt. Probably too late now. All seems so obvious now...

so far I am up 20% on GS. Even after taking the tanking USD into account.

[TimberWolf]

I made a mint on Barclays and a couple of other banks back in Feb. Plus I remember telling everyone at the time.

Yes, I remember. I didn't have any cash at the time. I do now...

[SuperZ]

Remember you heard it here first.

House prices to head SOuth again (severly) is much more likely than a Stock Market crash, so most people here will probably lose more money than someone who has dabbled in Stocks since March

[sasguru]

House prices to head SOuth again (severly) is much more likely than a Stock Market crash

Both.

HTH

[mace]

Erm. Explain to me why banking shares are a good bet.

Lehman brothers collapsed because they were at one point leveraging their assets by over 40 times. i.e. it only required a 2.5% drop in the market that they were mainly invested in to make them bankrupt. By the time of their collapse, they'd manage to reduce their leverage to around 25 times by selling some of their assets but the subprime collapse had by that point meant that what they owed their creditors was more than their remaining assets. It wasn't just Lehmans that were in this game. Merrill Lynch were similarly close to collapse and all of the other investment banks can only produce high returns by being similarly highly leveraged.

In theory, the UK and US governments won't allow another major investment bank to fail but then again that was the idea before they allowed Lehmans to fail, and I don't see that either government can afford to put any more taxpayer's money in due to the general outcry that would cause.

This doesn't mean that another investment bank will fail or indeed that you won't make a lot of money from investing in such a bank. It just means that the fundamentals are awful and it's a pure gamble. It's a strange thing, this world. If you're penniless you're of no importance, if you're worth millions you're important and if you owe millions, you're also important.

[sasguru]

Erm. Explain to me why banking shares are a good bet.

Lehman brothers collapsed because they were at one point leveraging their assets by over 40 times. i.e. it only required a 2.5% drop in the market that they were mainly invested in to make them bankrupt. By the time of their collapse, they'd manage to reduce their leverage to around 25 times by selling some of their assets but the subprime collapse had by that point meant that what they owed their creditors was more than their remaining assets. It wasn't just Lehmans that were in this game. Merrill Lynch were similarly close to collapse and all of the other investment banks can only produce high returns by being similarly highly leveraged.

In theory, the UK and US governments won't allow another major investment bank to fail but then again that was the idea before they allowed Lehmans to fail, and I don't see that either government can afford to put any more taxpayer's money in due to the general outcry that would cause.

This doesn't mean that another investment bank will fail or indeed that you won't make a lot of money from investing in such a bank. It just means that the fundamentals are awful and it's a pure gamble. It's a strange thing, this world. If you're penniless you're of no importance, if you're worth millions you're important and if you owe millions, you're also important.

JP and GS are making billions in profits a year later. Go figure.

HTH

[AlfredJPruffock]

Remember you heard it here first.

I also read here first that the US was going tits up in September !

[BlasterBates]

[denial->anger->depression->acceptance]

no I don't see any reason why there would be a crash in October.

[/denial->anger->depression->acceptance]