Opportunity can be found in adversity!
In Fact, Adverse economic events are the best time to find and exploit opportunity. This is especially true in the markets (obvious example of getting us into stocks in the week of Tuesday, January 22/08 and the resulting gains quotes a subscriber)
John Lansing
Very good call on the HUM 80's today..Clear concise & easy to understand..I am new to options..it was like the light went off.
I just wanted to say THANK YOU.
I paid for my annual subscription TODAY on that one trade!
John R...aka.....rhodojohn 02/04/08
Less obvious is how to take advantage of growth opportunities arising out of the U.S. subprime mortgage crisis. The crisis has forced banks to enter 2008 in a reactive mode. The FBI is investigating various levels of conspiracy that it believes perpetuated the housing boom and ultimately resulted in millions of Americans losing their homes, investment banks losing billions of dollars and the chief executives of Citigroup, Merrill Lynch, Bear Stearns and UBS resigning.
The Sub-prime meltdown, which began last year, was a result of years of increasingly lax lending practices which finally came to roost when loan defaults started to rocket and has resulted in America's FBI investigating senior banking executives for insider dealing and fraud as part of a criminal inquiry into the sub-prime crisis. Neil Power, the head of the FBI's economic crimes unit, has initiated the most far-reaching criminal investigations ever into the practices of the mortgage industry.
These are, of course, things we know because they are in the news every day. But what are the implications that we can take advantage of?
In 2008, banks will focus IT spending on initiatives that reduce risks. A prime driver will be much more rigorous automated control over consumer lending, since Bank CEO's dislike being investigated simultaneously by the FBI and the SEC. But banks will also focus on those areas of risk control not related to consumer lending. One example is the concerns over fraud arising from disclosure of customers' financial information which has forced bank boards and management to pay more attention to information security and fraud prevention. Another area is risk control in the trading departments of financial institutions, with a view to preventing losses such as the 1/3 of a Billion Dollars lost by the Bank of Montreal traders last year, subsequently dwarfed by the 7 Billion Dollars Plus lost by Societe Generale's Jerome Kerviel, this year.
Such concerns will lead to Risk Management and Security experts being granted greater organizational responsibility, better visibility, and larger budgets. IT departments will be required to provide solutions that minimize the risk of such financial debacles as have occurred in the last 12 months and the fact that CEO's are being subjected to criminal, as well as regulatory investigation, will insure that they are provided with healthy budgets to respond to that task.
Can you see where this is heading?
Combined with the pressures Financial Institutions will feel to increase IT spending, is the other outstanding result of the crisis. Plummetting interest rates.
With interest rates dramatically lower money is now flowing freely into stocks!
John Lansing
Just when i think it can't get any better! This site is amazing....for the self directed...those that need direction.....or even have no clue.....you have everyone covered!
And I love the way we can drill down to the strongest stocks in the strongest sectors. Thanks to Casper also for making such great tools!
steveu 01/04/08
"Banks will focus IT spending on initiatives that reduce risks"
Creating efficiency that can only be found through the use of investing in "Information Technology"........More for subscribers as to which stocks will get that juice!
