Replies to post #33323 on Rags to Riches

[ShootinBlanks]

sorry friend...lol. You are looking good aftermarket on it so congrats. I could be wrong but I think we see a correction tomorrow or at least my account hopes so.

[BlackThought]

Dow Slumps 3.6%: "We Are On Schedule for a Very, Very Long Bear Market," Prechter Says

The global selloff in stocks accelerated Thursday, sending the Dow down 3.6% to 10,068 while the S&P 500 lost 3.9% to 1,071.59 and the Nasdaq shed 4.1% to 2,204.

All major U.S. averages are now down for the year and at least 10% below their 2010 highs, meaning the downturn has officially entered "correction" territory.

Unfortunately (for bulls), there's much more selling ahead, according to Robert Prechter, president of Elliott Wave International and author of Conquer the Crash.

"We should be in for [another] week or two of pretty serious selling," Prechter says. "They'll be bounces along the way...but I think this should last a long time. We should be on schedule for a very, very long bear market period."

In the near-term, the veteran market watcher predicts a "dramatic increase in volatility," beyond what's already occurred. The CBOE Volatility Index (VIX) rose another 30% today and is now up about 180% from its late April lows.

Notably, today's selling occurred despite a rally in the euro amid reports of central bank intervention. Joe Brusuelas of Brusuelas Analytics says, "The capitulation in today's market has more to do with the unwinding of the easy money [carry] trade on commodities," which fell again today, with notable weakness in energy and palladium.

Meanwhile, Treasury prices continued to benefit from the "risk aversion" trade with the yield on the benchmark 10-year note falling to 3.21%.

Broken Record or Market Sage?

Other than to say "a long way down," Prechter wouldn't say how much further he thinks the market will fall, suggesting a repeat of the 1930-32 scenario when "extremely sharp rallies" kept investors interested and "feeling like a bottom [was] forming."

Anyone familiar with Prechter knows he's been predicting doom for a long time so it's tempting to dismiss his latest warning -- a veritable repeat of what he said here in February. But he's not a perma-bear and did turn bullish ahead of the bottom in March 2009.

More dramatically, in 1978 he co-authored Elliott Wave Principle - Key To Market Behavior, which predicted a great bull market similar to the 1942-1966 rally. By his own admission, Prechter underestimated the extent of that historic rally, which ran from 1982-2000 and saw the Dow rise 1,500% from 777 to 11,723.

Prechter says the market has spent the past 10 years building a "major head and shoulders" top from those 2000 highs, even though they were exceeded in 2007. Ultimately, he expects a "corrective mode that's going to retrace virtually the entire" 1982-2000 bull market.

"The best place for most people to be is in cash" and equivalents, he says. "You want maximum liquidity until this thing blows over."

http://finance.yahoo.com/tech-ticker/dow-slumps-3.6-%22we-are-on-schedule-for-a-very-very-long-bear-market%22-prechter-says-492864.html?tickers=^DJI,^GSPC,^IXIC,^RUT,^VIX,IWN,TLT&sec=topStories&pos=8&asset=&ccode=

[BlackThought]

More banks are troubled even as industry recovers

The number of troubled banks kept growing last quarter even as the industry as a whole had its best quarter in two years.

The Federal Deposit Insurance Corp. said Thursday that the number of banks on its confidential "problem" list grew to 775 in the January-March period from 702 in the previous quarter. But banks overall posted net income of $18 billion. That was up from $5.6 billion in the same quarter a year earlier.

"The banking system still has many problems to work through, and we cannot ignore the possibility of more financial market volatility," FDIC Chairman Sheila Bair acknowledged. But, she added, "The trends continue to move in the right direction."

The largest banks showed the most improvement. They have mounted a strong recovery with help from federal bailout money and record-low borrowing rates from the Federal Reserve.

A majority of institutions posted gains in net income in the first quarter. But many small and midsized banks are likely to suffer distress in the coming years, especially from failed loans for office buildings and development projects.

Larger banks are doing better, partly because they are able to cut back on lending in troubled parts of the country such as Florida and Nevada, said Anil Shivdasani, a finance professor at the University of North Carolina at Chapel Hill.

"For the most part, smaller and regional banks have less flexibility," he said.

And a further decline in home prices, expected by many analysts, would cause more losses for banks.

"Another leg down in housing could extend the period for which the credit distress persists," said Richard Brown, the FDIC's top economist. "That's a legitimate concern."

The amount of money that banks set aside to cover future losses dipped nearly 17 percent from a year earlier. Losses taken on loans that banks don't expect to be repaid were up 38 percent from a year earlier. But those losses were down slightly from the fourth quarter of last year.

The FDIC's deposit insurance fund, which fell into the red last fall, posted its first improvement in two years. Its deficit shrank by $145 million to $20.7 billion.

The FDIC expects U.S. bank failures to cost the insurance fund around $100 billion through 2013. The agency mandated last year that banks prepay about $45 billion in premiums, for 2010 through 2012, to help replenish the fund.

Agency officials noted that they are getting higher bids and more bidders at auctions for failed banks. Banks have also been able to raise money in recent weeks to strengthen their balance sheets or make acquisitions.

Last year, 140 federally insured institutions failed and were shut down by regulators. It was the highest annual number since 1992 during the peak of the savings and loan crisis. Last year's failures extended a string of collapses that began in 2008, triggered by loan defaults in the financial crisis.

The pace of bank collapses this year exceeds last year's. So far, 72 banks have failed in 2010. As a result of those failures and bank mergers, the number of FDIC-insured institutions fell to 7,932 in the first quarter.

That's the first dip below 8,000 in the history of the FDIC, which was created in 1933. However, depositors' money -- insured up to $250,000 per account -- isn't at risk. The FDIC is backed by the government.

A change in accounting rules forced banks to bring assets packaged into securities onto their balance sheets. That boosted the value of loans on banks' books by nearly $249 billion, up nearly 2 percent from the fourth quarter of last year. Without the accounting change, however, loan volume would have declined.

http://finance.yahoo.com/news/More-banks-are-troubled-even-apf-2854456667.html?x=0&sec=topStories&pos=7&asset=&ccode=