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Forum Post: Sidique wai

Posted 12 years ago on Sept. 29, 2011, 1:47 a.m. EST by Tomhmm (5) from Queens, NY
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So Sidique Wai came up to me on broadway today in front of liberty plaza. I was handing out flyers for Saturday's march, ended up jumping in front of him and asking if he wanted to show up this weekend. He engaged me in conversation, asking if I thought the group down here would be interested in meeting with some representatives from wall street. I at first was like, well that's besides the point (I didn't know who he was at this point, btw he is the president Of the united African congress and has ran for office in Brooklyn). But after a while I entertained the idea and was like ya, I think it would be interesting to talk to some execs. So he said, let's do it on Monday. Sooooo, I'll be asking the GA tomorrow what they think of that as part of the community outreach working group proposal tomorrow. I hope. I need consensus from that group if present.

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[-] 1 points by economicallydiscardedcitizen (761) 12 years ago

When you meet with any representatives from Wall Street prepare a list of questions especially stressing that we need to expedite the process of bringing America back because at the rate things are going Risk consultant Satyajit Das in the article below looks like he's more right.than wrong and there has to be a way to prevent the continuance of the mess created through derivatives for example and get those who are among the wealthy on Wall Street who are sincere about a turn around through agreement resulting in changes to the processes that currently can enable a criminal element on Wall Street..

http://www.marketwatch.com/story/5-money-moves-one-debt-crisis-expert-is-making-now-2011-09-29

Money Talks

Sept. 29, 2011, 12:01 a.m. EDT

5 money moves one debt-crisis expert is making now Risk consultant Satyajit Das says global downturn is nowhere near done By Jonathan Burton, MarketWatch

Reuters SAN FRANCISCO (MarketWatch) — There really is no polite way to convey what Satyajit Das is saying about the world that investors will face for several more years, but it must be said: The unwinding of the global debt crisis will make some people extremely wealthy, but most of us will have to live with less — in some cases far less.

Das is a Sydney, Australia-based risk consultant and for many years has been a leading expert on the use and abuse of credit derivatives. So after watching the world’s governments, businesses and consumers binge on cheap, borrowed money, and seeing central bankers and financial regulators doing little to stop it, Das decided this party would end badly.

Satyajit Das. Soft-spoken and matter-of-fact, Das told anyone who would listen that the global economy was on the precipice of a credit crash which would trigger a worldwide deleveraging and the mother of all bear markets for stocks.

That was in 2006. Five years and one global debt crisis later, those same governments, businesses and consumers are hamstrung. Read more: Don't count on 'Markozy' to save Europe.

“People wasted trillions of dollars, which now has come home to roost,” Das said in a telephone interview from London earlier this week.

Put simply, at this wee hour of the global economy’s morning, partygoers are still too hung over to even have a coherent conversation about cleaning up the mess, let alone pour more drinks to get the festivities started again.

Fault and default The problem child in this debt crisis and credit crunch is Europe, said Das, whose latest book is entitled “Extreme Money: The Masters of the Universe and the Cult of Risk.”

European leaders dallied and so delayed the day of reckoning, he said. “The real problems were never dealt with,” Das said. “If you never really deal with the problems, then obviously they come back to haunt you.”

Now, Europe’s policy makers, the European Central Bank and the International Monetary Fund are grappling with a fragile banking system that is intertwined with debt-ridden governments, a liquidity crisis in which banks are reluctant to lend to one another, and a parched global economy that resists efforts to push life-giving credit into its system.

Accordingly, Europe’s meisters and ministers are trying to orchestrate an orderly default for Greece, one that also recapitalizes weak European banks with heavy exposure to troubled Greek debt and props them up enough to deal with an anemic global economy in which, notably, even China will be impacted. Read more: Global markets need German keg tapped.

But once Greece restructures its debt — and it is a matter of when, not if, Das said — Ireland and Portugal may not be far behind. And then there’s Italy, which is saddled with an even more suffocating fiscal weight. Read more: Greece and the euro-zone's worst-case scenario.

“In Europe the steps are extremely straightforward if they want to do them,’ Das said. “Greece, Ireland and Portugal have to restructure their debt. That will lead to losses of between 35% and 75%” on bond principal, he added.

“When that happens you trigger massive losses in the banking system,” he continued. “And if Greece and Ireland and Portugal go, then companies within these countries whose debt we don’t talk about will also be problematic. Economies will go into deep recessions. The losses will be substantial.” Read more: Road map to euro salvation.

The amount of money needed to shore up this crumbling wall will be enormous, and may even require the recapitalization of the European Central Bank itself through funding from other central banks or money-printing, Das said. His reality check for Europe (and the big U.S. money-center banks that are also exposed to euro-zone woes): “Let the countries fail, recapitalize the banks, put German and French balance sheets at risk, and gain competitiveness. Then at least you’ve got a chance.”

In an overly indebted world, this is what passes for “orderly” default. In a disorderly event, Das said, “self-interest dominates.”

Financial markets at the moment are priced for such an orderly default, he noted, though more on the order of a 20% haircut than 50% or worse. Said Das: “They’re assuming the people in charge will manage to muddle their way through.”

Das said he’s not convinced. “The vested interests and divisive positions that everybody has makes it far more difficult to engineer that orderly crash landing,” he said. Read more: Orderly Greek default could be market positive.

Yet one year this financial crisis too will subside and allow a healing process to evolve, Das explained. But it will require patience and cooperation from political and business leaders and ordinary people, in Europe, the U.S., Asia and elsewhere, who neither welcome compromise nor are happy about a new reality that looks nothing like the old.

“Economic growth is not going to go back to high levels,” Das said. “I don’t know why this surprises anybody. The growth was debt-fueled. If you can’t have debt, which is what deleveraging means, you are going to see a massive decline in growth.”

Where to put your money Investors can mitigate the effects of this “new normal,” Das said, but first they have to accept that the gilded age of globalization over several decades pre-2007 is a bygone era.

In this current period of deleveraging, savings rises and spending falls — for governments, corporations and households — and living standards decline. The social contract between government and its citizens is either renegotiated or reneged upon; opportunities that reward innovation, hard work and entrepreneurship are fewer, and optimism becomes less prevalent — relative to where you live.

China and other emerging markets will not be immune, Das added.

“There’s massive wealth destruction around the world,” he said. “Middle-class futures are being decimated. We are going to start to see from the emerging markets some less-positive news with greater frequency.”

Investors have no choice but to reorganize their thinking, Das said. Even the Great Depression afforded windows of opportunity when people made money in stocks. Nowadays, he added, “It’s just got to be made differently.”

In a global economy where earnings growth is abundant and risk-taking is rewarded, investors target capital gains, income and capital preservation, in that order, Das explained.

Today, with growth scarce, investors need to do exactly the opposite. Capital preservation is paramount, income second and capital gains third. Here’s where Das suggests you start:

  1. Invest in food and consumer staples One way to take advantage of economic turmoil is to buy what’s scarce and what people need. Food — “staples of life,” Das said — fits the bill.

  2. Buy energy stocks In addition to agriculture producers, Das would own shares of energy companies, especially those involved with that other staple of modern life — oil.

  3. Buy income-producing stocks In a slow-growth business environment, shares of the “strongest and fittest” companies will be bid up, Das predicted. These stocks tend to pay dividends, and, said Das, people who are saving for retirement or already retired need “something that gives you cash flow.”

  4. Take advantage of high volatility Market swings have been extreme and day-to-day volatility is more common, reflecting the grim global conditions. As an investor in that situation, you have to be more nimble and expect the unexpected, Das said.

“Holding periods are going to have to change and become shorter,” he noted, which will keep volatility elevated. “You need to trap volatility in your portfolio,” Das said. “You need to have a trade which captures these massive swings.”

His advice: trade more often or, less expensively, buy out-of-the money equity-index options that pay off when stocks spike.

  1. Keep a lot of cash Cash won’t make you money, but cash is “useful” dry powder for opportunities that arise, Das said. In a miserly market, people with liquidity are the wealthiest players. “You can take advantage of things that can make you a lot of money,” he said.

And, Das said, with cash you can take advantage of a piece of market knowledge that other investors might not realize: You can go backwards, but there’s no going back to how it was.

“If you learn that lesson, that’s pretty much the most important,” Das said. “If you cling to the past and assume everything is going to be the same again, that’s a very dangerous place.”

Comments on this story 2 Comments « « ‹ ‹ 1 › › » » Oldest comments listed first forestguide69 3 hours ago +3 Votes Request sent "“There’s massive wealth destruction around the world,” he said. “Middle-class futures are being decimated. We are going to start to see from the emerging markets some less-positive news with greater frequency.” "

Well, gee.

How are the Magical One Percenters going to be when this is over? Lemme guess.. The rich get richer.. Reply Link Track Replies Report Abuse fasttrack 1 hour ago +2 Votes Request sent Of course, they own the game; they are the "house". I think its actually more like the magical 0.1% that sit on the corporate boards, are those close "friends" of the political elite, go to the yearly reclusive "retreats" and discuss the state of the world and share interesting (and profitable) little secrets. The 1%, that still make millions, are the megaWealthy's surrounding buffer - the people they keep close and firmly in grasp of their puppet strings. The "buffer" people are responsible for manufacturing political/social consent, putting the "correct" message out there in the media, maintaining the facade of critical dialog and opposing view points, giving the "little ... people" things to keep them distracted by, all while ensuring that the wonderful world of dream manufactured debt-slavery marches merrily onward. less

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[-] 1 points by intuityourstrategy (8) from Portland, OR 12 years ago

Yes; it would benefit all to have a clear intention for the meeting; in whatever form. While I agree with "Laughing out the institution" of wall street, it would not serve to "create a spectacle of" someone who was sincere, people who're wealthy, but actually want to help (if there is anyone that's truly sincere, and have the interest of the greater good in mind w/in wall street) - character is everything, in dealings, for both them, and us.

[-] 1 points by Tomhmm (5) from Queens, NY 12 years ago

I like this response

[-] 1 points by Tomhmm (5) from Queens, NY 12 years ago

To clarify, he showed support for our cause and a willingness to dialogue but wanted to know if I could find a group of "leaders" to meet with his high power friends. I said we don't hav leaders, but I still think this opportunity to talk/create a spectacle of/with execs shouldn't be passed up