1998 all over again?

[Jim Smith]

uncanny how financials are leading the way down at the same time they did in 1998....Back then it was long term capital management.....Then the situation was a foot wide and a mile deep....Today its CDOs and subprime and shaky LBOs.....this time it's a mile wide and we just don't know how deep yet....in 1998, the broker dealer index lost half its value before bottoming....companies like LEH lost 75% of their value before bottoming....Goldman Sachs is a quality company but if they can't do LBOs, where does their profits come from? This is no time to be a hero.

[Jim Smith]

yes, it seems this is 1998 all over again......Back then it was just Long Term Capital Management.....Now its many hedge funds in trouble.....I expect brokers to trade down to book value.....all are great shorts......banks too....
I expect the S&P to drop to 1220.....

[IIC]

yes, it seems this is 1998 all over again......Back then it was just Long Term Capital Management.....Now its many hedge funds in trouble.....I expect brokers to trade down to book value.....all are great shorts......banks too....
I expect the S&P to drop to 1220.....

Any projection on how low the Naz 100 might go?...I'm thinking perhaps 1700ish

[Websman]

I pity the fool who places his whole retirement in the market....

[Jim Smith]

I think the Russell could lose another 25%.....I am long the SDS which is the double beta bear play on the S&P 500.....I am long puts on LEH and UNH....UNH broke a huge bear flag support which, believe it or not, points to a target of $28.....That might not be so ridiculous if a democrat takes the white house.....my SDS target is $75 by Labor Day....I expect the S&P to lose 15%+ in August. This is 1998 all over again, only worse....I hear Bear Stearns has a third hedge fund nearly worthless.....I am looking to short all brokers and banks down to 1x book value.


A guy I know who trades milk futures who subscribes or has money invested with Robert Rubin's investment company told me a week ago that Rubin said we're headed for a three year bear market.....no target given.

[sisterwin2]

You think three yrs?? That would be terrible for us a-bit-over 50 folks. Right now I am putting 25% of my check in my 401k....

any suggestion on how I should delgate the monies too? Sounds like I should play it as safely as possible.

I am too close to retirement to not play it safe right now...

[billyjoe]

sister,
I was down 40% by 2001 and am up approx. 400% from that point. After 3 years you'll still be a few years from retirement and the appreciation could be fantastic when the bull resumes. I know it's hard to think that way when your statements show you going down down down. I panicked after the Oct. '87 crash and sold out. Although looking back it wasn't that much, to me at the time it was a good chunk of my net worth. Had I held on, it would have made a tremendous difference in my current finances.

------------billyjoe

[Jim Smith]

the 1998 scenario looks good with brokers getting clocked....watch for LEH to trade down to $21......

[ninner]

hey jimmy, where do u think MER will go.

[Jim Smith]

this is ugly