ABX MELTDOWN.

Since my last post on Subprime Mortgages and ABX Indices in November last year, and Billions on Dollars of writedowns and quarterly losses later.........there is clearly no solution yet.
'The ABX Index is a series of credit-default swaps based on 20 bonds that consist of subprime mortgages.ABX contracts are commonly used by investors to speculate on or to hedge against the risk that the underling mortgage securities are not repaid as expected.' www.markit.com

My November 10, 2007 Post : http://thebullishbear.blogspot.com/2007/11/subprime-mortgages-abx-indices.html

THEN

NOW

TO DO LIST :

Bail out the Investment banks, Banks with lax lending standards, speculators and CDO people that got us here in the first place.

Central Banks to buy all Toxic mortgage backed securities from banks & end the Credit Crisis.

Bail out the AAA rated Bond Insurers.

Bail out the US Housing market.

Bail out Freddie Mac and Fannie Mae, or nationalise them if need be.

Save the US DOLLAR.

Save the US CONSUMER.

BEWARE THE BOUNCE ! !

Its not over yet ! ! !

• The Credit Crisis is far from over.
• More banks to go under.
• Counterparty Risk continues to be a greater threat than ever, as no one is willing to lend.
• Losses to Employee Stock Options & Pension Fund Investments, in cases such as the Bear Stearns collapse.
• The Fed is down to his last few rate cuts, and he has no solutions yet!!
• USD pegged currencies, can no longer sustain falling interest rates, as local inflation soars.
• The impact of Middle East Oil producers dropping the USD peg, and pricing oil in ' a basket of currencies', as against the USD.

Lastly, heres an interesting article on 'The Credit Crisis', from the Interfluidity Blog

http://interfluidity.powerblogs.com/posts/1205997488.shtml

Best Explanation to the Credit Crisis yet.

THE SURGING JAPANESE YEN

As the carry trade continues to unwind, the Japanese Yen has risen sharply against the USD.

In addition to the slowing US economy; the rising Japanese Yen, is now affecting the profitability of large Japanese exporters like Toyota Motor Corp..
''A stronger yen cuts the repatriated value of vehicles sold by Japanese automakers in the U.S., the world's biggest auto market. Every 1 yen gain in the Japanese currency against the dollar trims 35 billion yen ($ 342mn approx.) from Toyota's annual operating profit, according to the company.''
http://www.bloomberg.com/apps/news?pid=20601080&sid=aBlqryleIE20&refer=asia

THE INDIAN MARKET MELTDOWN

Popular sectors have seen a sharp price erosion

BROKERAGE FIRMS:
REAL ESTATE FIRMS:

POWER SECTOR:

STOCKS THAT WERE RECENT TRADING FAVOURITES:

• The long term growth story of the Indian Economy is intact.
• This is a Stock Picker's market.
• Investing in popular or overvalued sectors is always risky. You can never know when the party ends.
• Invest with an adequate margin of safety, and know your investment risk profile.
• Never buy a good stock at an expensive price.
• Over the short-medium term, the direction of Indian equities will be dictated by global markets.
• The current recession in the US will continue to drag down world markets.

TIME TO EXIT SOFT COMMODITIES (Food Grains)

With everyone piling into soft commodities, I think we have hit a short term top in the food grain market.
While demand for food grains far exceeds supply, the vertical rise in price of these food grains warrants caution. Speculation is high, and everyone is desperate to join this party.

At these levels, a sudden sharp pull back, is likely to cause panic selling, a triggering of stop losses and losses for short term speculators.
Even in a long, multi year bull market in these commodities, be prepared for corrections, which can be used for fresh entry points.

For now, if you can't stand the heat, then stay out of the kitchen.

Corn:Wheat:Soybean: