Month: October 2008

Article: Europe on Brink of Currency Crisis Meltdown

Ok, this answers my question from a few weeks ago about “what about the ROW (‘rest of world’) subprime mess? Where is it?? It’s not mortgages, it’s this (see article). And it’s [probably] going to make USA subprime look like a walk in the park:

Europe on the brink of currency crisis meltdown
The crisis in Hungary recalls the heady days of the UK’s expulsion from the ERM.

By Ambrose Evans-Pritchard
2008-10-26
telegraph.co.uk

The financial crisis spreading like wildfire across the former Soviet bloc threatens to set off a second and more dangerous banking crisis in Western Europe, tipping the whole Continent into a fully-fledged economic slump.

Currency pegs are being tested to destruction on the fringes of Europe’s monetary union in a traumatic upheaval that recalls the collapse of the Exchange Rate Mechanism in 1992.

“This is the biggest currency crisis the world has ever seen,” said Neil Mellor, a strategist at Bank of New York Mellon.

Experts fear the mayhem may soon trigger a chain reaction within the eurozone itself. The risk is a surge in capital flight from Austria – the country, as it happens, that set off the global banking collapse of May 1931 when Credit-Anstalt went down – and from a string of Club Med countries that rely on foreign funding to cover huge current account deficits.

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Web 2.0 Expo Next Week, First Doing Market Update

Susanne and I just got back from a great 4-day trip to Berlin for the Web 2.0 Expo. Met a lot of interesting people and startups there and will report on it next week. First, however, a quick market update.

The reprieve rally I blogged about here is over, with new lows being set Thursday. See the 18 comments I added to that blog post for a number of interesting articles. Also see Nouriel Roubini’s video from yesterday in London: “It’s going to be a financial and economic wreak.”

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Problems at Zillow? Confusing UI? Yes. Deceptive? Maybe.

UPDATE: Zillow has replied, see the comments section.

Don’t get me wrong, I am (or at least was) a fan of Zillow, but my personal experience, described below, suggests that there may be problems beneath the surface (otherwise how and why would this have occurred).

I’ve asked the company to comment, but have received nothing, unless you count the two customer service emails I received (screenshots below). I ask them again at the end of this blog.

So, the problem started when…

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The Reprieve Rally Continues

2008-10-14 UPDATE: See comments section for article excerpts, links, and comments.

Why do I say continue, because as noted in Friday’s blog, it started from Friday morning’s low. From there to Friday’s high the DJIA rallied 12.9%. It is now up 25.4% from Friday’s low and 11.1% from Friday’s close.

Compare and contrast the front-page of today’s MarketWatch.com (above) and Friday’s (below):

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Sentiment Extremes Everywhere + Biggest Weekly Drop Ever & Biggest Daily Range


Just a quick post to cap the week. Sentiment extremes where everywhere you looked, even on Twitter.  Images and a few comments below.  Also some links to outside articles.

Bottom line:

  1. A rally is imminent: All but one of the elements were in place by Friday morning (2008-10-10) and Friday’s intraday reversal might have been that last element. We won’t know until next week, but I did buy late in the day.
  2. Regardless of when the tradable rally develops, based on current information and thinking, we are likely at least halfway to the bear market low (in terms of time and price), but less than halfway through the recession.
  3. While sentiment reached an extreme Friday morning, it doesn’t mean it reached the extreme of this cycle.

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