Replies to post #5172 on Options Wonderland

[*~1Best~*]

Smart money was pricing in the subprime market fall out for the last 1.5 years as I also commented during Jan-Mar 2006 that we will see the problem. Many stocks are oversold now and are in downtrend.

It is those who are MOOOOOOOOOOOORUNS causing the problems because they didn't properly manage the lending policies and procedures as well as improper risk management..... and the world market is melting in reaction to those MOOOOOOOOOOOORUNS.

Think that the world financial market is not such silly, but it seems intentionally taking markets down from short side with the drama.

Shorts are still milking "subprime" drama story.

[*~1Best~*]

WB, it seems... it is short hedge funds using "subprime" drama.
Otherwise, this world financial market is run by a bunch of incapable risk management and lending practices.

~~~

How long short hedge funds going to milk the subprime drama?

It is a good thing that $SSEC remains rational...

That is the reason that China is wealthy, not just a few.

 
  
 ^AORD	All Ordinaries	5,965.20 2:11AM ET	Down 222.50 (3.60%)	Components, Chart, More 
 ^SSEC	Shanghai Composite	4,749.37 3:00AM ET	Down 4.73 (0.10%)	Chart, More 
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 ^N225	Nikkei 225	16,764.09 3:00AM ET	Down 406.51 (2.37%)	Chart, More 
 ^NZ50	NZSE 50	4,109.84 1:31AM ET	Down 50.58 (1.22%)	Components, Chart, More 
 ^STI	Straits Times	3,359.18 5:05AM ET	Down 53.99 (1.58%)	Components, Chart, More 
 ^KS11	Seoul Composite	1,828.49 5:03AM ET	Down 80.19 (4.20%)	Components, Chart, More 
 ^TWII	Taiwan Weighted	8,931.31 1:46AM ET	Down 251.29 (2.74%)	Chart, More 
  
  
 ^ATX	ATX	4,434.68 11:35AM ET	Down 156.80 (3.42%)	Components, Chart, More 
 ^BFX	BEL-20	4,096.20 12:22PM ET	Down 118.72 (2.82%)	Chart, More 
 ^FCHI	CAC 40	5,448.63 12:25PM ET	Down 176.15 (3.13%)	Chart, More 
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 ^OSEAX	OSE All Share	532.13 10:29AM ET	Down 13.80 (2.53%)	Components, Chart, More 
 ^MIBTEL	MIBTel	30,418.00 11:41AM ET	Down 775.00 (2.48%)	Components, Chart, More 
 ^IXX	ISE National-100	99.49 1:20PM ET	Down 0.23 (0.23%)	Chart, More 
 ^SMSI	Madrid General	1,590.44 11:42AM ET	Down 42.25 (2.59%)	Components, Chart, More 
 ^OMXSPI	Stockholm General	378.72 11:49AM ET	Down 12.37 (3.16%)	Chart, More 
 ^SSMI	Swiss Market	8,565.52 11:31AM ET	Down 239.80 (2.72%)	Chart, More 
 ^FTSE	FTSE 100	6,038.30 11:35AM ET	Down 232.90 (3.71%)	Components, Chart, More

[*~1Best~*]

Fed Makes Third Addition of Funds With $3 Billion Injection ...

THIS SHOULD HELP MARKET! DRIVE SHORT HEDGE FUNDS TO COVER... ?!! We will know how big the short hedge funds are.

The Federal Reserve, trying to calm turmoil on Wall Street, added $3 billion of funds to the U.S. financial system, adding to the $35 billion that it pumped into the system earlier in the day.

Before the latest addition, the Fed added $16 billion to the system mid-morning after a $19 billion injection earlier in the day, pushing the total $38 billion. That followed a $24 billion infusion on Thursday.

The Fed said earlier Friday that it will provide "reserves as necessary" to help the markets safely make their way. The central bank did not provide details but said it would do all it can to "facilitate the orderly functioning of financial markets."

Financial markets in the United States and around the globe have been shaken by fears about spreading credit problems that started with home mortgages for those with tarnished credit histories. Investors are worried that these problems will infect the larger financial system and possibly hurt the U.S. economy.

The current financial turmoil provides the biggest test yet to Federal Chairman Ben Bernanke, who took the helm last year.

Reassuring Markets

The Fed's action comes one day after a financial panic about a credit crunch swept through Europe. That prompted the Europeans to pump $130 billion into their financial system. The Fed moved Thursday to add an extra $24 billion in temporary reserves to the U.S. banking system. But that wasn't enough to comfort Wall Street, which suffered its second-worst decline of the year that day.

The Fed on Friday chose not to cut a key interest rate, called the federal funds rate, to address the problem. That interest rate still stands at 5.25 percent. The funds rate is interest banks charge each other on overnight loans and is the Fed's main lever to influence economic activity.

Instead, the Fed is seeking to provide reassurance to investors that the central bank will plow extra money into the U.S. financial system to make sure the credit crunch doesn't worsen.

"In current circumstances, depository institutions may experience unusual funding needs because of dislocations in money and credit markets," the Federal Reserve in Washington said in its statement.

It told banks that the Fed's discount window -- where banks can turn in an emergency for short-term loans -- is available as a source of funding.

After the Sept. 11, 2001, terror attacks, the Fed used the discount window to extend billions of dollars worth of emergency loans to banks to keep the financial system functioning.

The current meltdown in the housing and mortgage markets has caused new home foreclosures to climb to record highs and has forced some lenders out of business. Problems first sprouted in the market for higher-risk or "subprime" mortgages, which are held by people with poor credit or low incomes. But some problems have spilled over to more creditworthy borrowers. That has led to tighter lending standards, making credit harder to get for people and businesses.

Credit Crunch

The free flow of credit is important to the smooth functioning of the national economy. Increasingly restrictive lending conditions can put a damper on people's ability to buy big-ticket items such as homes, cars and appliances. And it can crimp businesses' capital investment and hiring. That reduced appetite by businesses and consumers would slow overall economic activity.

Against this backdrop, Wall Street has careened wildly in recent weeks.

Bernanke and his central bank colleagues, in a meeting on Tuesday, acknowledged that these problems are posing increasing risks to the economy. But they refrained from cutting interest rates and stuck to their forecast that the economy will weather the financial storm and grow gradually in the coming months.

"Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses and the housing correction is ongoing," the Fed said on Tuesday, its first acknowledgment of the conditions shaking Wall Street and Main Street. "Downside risks to growth have increased somewhat."

One day later, President Bush struck a reassuring tone about the turbulence on Wall Street, saying he believes the markets will achieve a "soft landing." The market ended Wednesday up by 154 points, but then went into its nosedive on Thursday.

http://www.cnbc.com/id/20211772