Recognizing Bearish Signs in the Stock Market
A bear market can be described as when there is a downward trend in the overall activity of the stock market. There are so many activities that go on in the stock market and when there is a continuous fall in prices of a stock over a time, we can rightly say that the market is bearish. Immediately the bear market sets in, there is a change in the trend of the market. There is a sudden collapse in the prices of stock in the stock market. Automatically, the market changes from a bullish market to a bearish market. The bear market if fully understood, could be a very good period for a wise and intelligent trader to make fortune in the stock market. One can always predict, well before any event, that a stock market crash is going to happen. There are certain events which happen prior to the crash, which can actually assist us to predict when the market is about to be bearish. The events that can enable us recognize a stock market fall is as follows:
WHEN MARKET IS OVERBOUGHT
This is a situation where there are so many investments into the stock market by people over a particular time. Stocks start to lose value. Read more
Financial Crisis Understanding From the Ground Up (Part 4)
The current financial crisis
The public have a common understanding that the subprime mortgage crisis has leaded to a far more serious consequence, so called ‘the financial crisis’ recently. To be exact, It has been going on for seven months. But how will that be happened? This is the question. The subprime load crisis is relatively simple to understand. People bought homes they couldn’t afford, and now they are falling behind on their home loans. This has caused the loss of related financial institutions.
However, the amount of loss is not the major cause of the financial crisis. US government has already announced to take over Fannie Mae, Freddie Mac and AIG, and have injected the capital over that amount into the market. Besides, the majority of homeowners are still doing just fine. The conventional mortgage market is still healthy. So, how is it that a mess concentrated in one part of the mortgage business: the subprime loans, has frozen up the whole credit markets in United States? How would that crisis caused such a big impact to the stock market, causing the collapse of Bear Sterns, Lehman brothers, etc, and left the economy on the brink of the worst recession in a generation and forced the Federal Reserve to take its boldest action since the Depression in 1923? Read more
What Does the AIG Bailout Mean
On Sunday, September 14, the government drew a line in the sand on Lehman Brothers. After orchestrating a bailout of Bear Stearns by JP Morgan (with tens of billions in guarantees) the precedent was set – investment firms in trouble could simply go to the feds. The moral hazard, a term that is suddenly in vogue now when it should have been in vogue in 2005 and 2006, the bailout created was beginning to affect investor thinking. Without risk of failure reckless behavior is encouraged, and the actions of a few managers on Wall Street will be paid for by taxpayers.
So the line was drawn with Lehman. No bailout. It was the right move to restore the natural order of economics.
Two days later the government erased its line in the sand and gave an unbelievable $85 billion in emergency loans to AIG. What happened?
Fear is the answer. In response to the Lehman bankruptcy stock markets in the US and all over the world tanked. The sell-off was the most severe since 2001. But the stock market fear was not the fear the Fed was really worried about with AIG. Read more
12 Tips to Safely Borrow Money Online
photo credit: HAMED MASOUMI
It is a toss up sometimes if our experiences are going to be pleasant or not. When borrowing money online, you must have some things in mind before you pick a lender.
A customer needs to be informed and ready to ask important questions regarding their transaction to safeguard themselves. There are a few quick and easy things you can do to ensure that your loan application goes smoothly and ensure that you are protected from fraud.
1. Is the Company Real or Just a Website?
Real companies will have a physical address listed on their website. This information should be easily found and not hard to locate at all. Be wary of post office box mailing addresses. Compare the address to a listing in the yellow pages online or call the phone number to make sure it is not fake.
2. Where Are They Located? Read more
Beat the Credit Crunch – A Simple Way to Make Make Money Fast For Everyone
If you are worried about the financial crisis, then the simple home business enclosed can help you beat the credit crunch and earn a great second or even full time income and make money fast…
The business is becoming a currency trader from home – before you say it’s too expensive or hard consider the following points as anyone can do it.
Only Few Hundred Dollars Needed and You can learn currency trading in a few weeks and operate your business in 30 minutes a day. Furthermore, you only need a few hundred dollars to get started, as the rise of online trading has made this business available to all. Read more
How the Credit Crunch Affects Online Business
According to a report, while High Street expenses are on the downward side, there seems to be no stopping to the escalation in online shopping. Since July 2005, when unpleasant weather hit Britain, spending was at its worst. But reports indicate that this year’s holiday would bring an upsurge in High Street. Looks like high street patrons are still ready for spending on luxury goods and other essentials.
Two-tier spending patterns:
Can we conclude that these spending prototypes reveal a two-tier pattern – those only just moving by and those who have considerable disposable income to spend? Read more
Understanding the Financial Crisis
Bought any credit default swaps lately? For most of us the answer is, “No, and what is a credit default swap?”
But just because you haven’t purchased any doesn’t mean that it isn’t going to affect you. In fact given the press the financial markets have been getting, all of us are feeling the heat one way or the other. Whether you are concerned about your bank going bust or a decline in your 401K or your business being able to tap a line of credit you’ve had for years, we have all felt the negative effects of this crisis. Read more
300 Points Lost on Wall Street As Investors Fear Recession
Stock markets moved lower on Friday around the world, as investors are liquidating risky positions, mounting evidence of global recession.
U.S stock indexes fell 4 percent, European stocks fell 6.5 percent and Japan’s Nikkei plunged 9.6 percent.
Oil moved lower as well to $63 per barrel while commodities copper to zinc, sugar and coffee were battered by sharp selling.
The gloomy outlook convinced investors that economy is headed for a severe recession despite government efforts to help financial system. Investors have been saying that we are in recession and this is time to realize that we are in recession right now. Read more
Financial Crisis Understanding From the Ground Up (Part 3)
Traditional commercial Bank vs Investment Bank
The simplest definition among them is: A commercial bank takes deposits for checking and savings accounts from consumers while an investment bank does not.
A commercial bank may legally take deposits for checking and savings accounts from consumers. The federal government provides insurance guarantees on these deposits through the Federal Deposit Insurance Corporation (the FDIC). We have mentioned the definition and how a traditional commercial bank makes profit in before. So, how about investment bank(I-bank)?
An investment bank operates differently. An investment bank does not have an inventory of cash deposits to lend as a commercial bank does. In essence, an investment bank acts as an intermediary, and matches sellers of stocks and bonds with buyers of stocks and bonds. For example, if company needs capital, it may get a loan from a bank, or it may ask an investment bank to sell equity or debt (stocks or bonds). Read more
Suckered Up Oil & Easy Credit is Over
As oil prices came close to $140 a barrel this summer, many analysts predicted that oil would come close to $200. Where did the oil go now?
Oil is at $80 a barrel. Instead of going up it is moving down thanks to another bubble along with commodities. There were so many analysts predicting oil prices at $200, even Goldman Sachs who in fact predicted $200 a barrel now cuts its estimates to $70 a barrel.
When dollar was declining many investors start to buy commodities, especially oil which send prices higher.
Goldman was bullish on oil all the time predicting growth and in supply which pushed oil prices higher even though people were driving less. Read more
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