Quote:
Originally Posted by lkn
great point. I imaging this crisis lasting for the next 14 to 16 months and that's being very optimistic. We'll see where it leads us..
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I posted here last year that we had some economic issues coming - and got slammed. We're in for sub-trend growth for at least 2 years. That's what a major deleveraging event will do.
I've been emailing w/ a CA in discussion to do a deal and he's in fantasy land, "no issues w/ inventory .. pricing ..." - may be true currently but the data I am seeing shows some major pain coming down the pike. Fine, I will keep my money until I see some realism on the CA's part.... no, actually I will just go shopping elsewhere.
BTW the above does not mean I think investments wont pay off in this environment. Lots of damage has been discounted in risk assets already.
As an aside, why pay hedgies 2/20 when just buying T-notes this year would have paid off 8-9% with no upside capture? Nor downside to principal unless the US really is going into a deep ditch economically.
Back OT: BMW AG is clearly examining their business model. Cancelling the CS shows that they are hunkering down. BMW's finance arm - like all of the autos' - are being whacked by dislocated credit markets (= onerous ABS spreads) and residuals that question the viability of the leasing model.
BMW AG has decent cashflow and a compelling brand, so the company will survive, just w/ compressed margins whole this tumult lasts - and with a renewed focus on less powerful (ie, less 'thirsty') models.
The 2002 made absolute sense in its time and was, and is, a blast. Back to the future.