Global Wealth destroyed by 45%

NEW YORK (Reuters) - Private equity company Blackstone Group LP (BX.N) CEO Stephen Schwarzman said on Tuesday that up to 45 percent of the world's wealth has been destroyed by the global credit crisis.

"Between 40 and 45 percent of the world's wealth has been destroyed in little less than a year and a half," Schwarzman told an audience at the Japan Society. "This is absolutely unprecedented in our lifetime."

But the U.S. government is committed to the preservation of financial institutions, he said, and will do whatever it takes to restart the economy.

U.S. Treasury Secretary Timothy Geithner plans to unfreeze credit markets through a new program that will combine public and private capital in a fund that would buy bank toxic assets of up to $1 trillion.

"In all likelihood, that will have the private sector buy troubled assets to clean the banks out in terms of providing leverage ... so that we can get more money back into the banking system," Schwarzman said.

He expects the private sector to end up making "some good money doing that," but added there were complex issues on how to price toxic assets.

He put part of the blame for the financial crisis to credit rating agencies.

"What's pretty clear is that, if you were looking for one culprit out of the many, many, many culprits, you have to point your finger at the rating agencies," he said.

Rating companies have been the focus of intense criticism for their role in granting top "AAA" ratings for complex bonds that later plummeted in value, resulting in subsequent rating cuts, in many cases to junk status.

"Once you bought into ... the Triple A paper and it turned out to be paper that was in many situations going to end up defaulting, then you really had the makings of a global problem," he said.

Schwarzman said problems were then exacerbated by mark-to- market accounting rules. Those rules ask banks and other financial institutions to price assets at a value related to how they would be sold in the open market.

Blackstone reported a quarterly loss in February after writing down the value of its portfolio and eliminated its fourth-quarter dividend.

Asked where was a good place to invest, Schwarzman said it made sense to buy cyclical names, which are less exposed to the economic cycles.

He said investors also may find value in debt products, including "senior layers of certain securitizations," where investors can see 15 percent to 20 percent returns, he said.

Geographically, he said there were "pockets of strength" in China, which is committed to getting to an 8 percent growth level, and in India, where the economy is slowing but banks are in good shape

Crude Oil

It appears that we have impulsive price action. The only wrinkle is that there is slight overlap on the initial move off of the 68.84 L, however, not on a close basis.

I will assume that (iv) has finally finished until proven otherwise.

There are a couple of ways to count this initial impulse. I show sub-minuette i ending at the 71.13 H. It is quite possible that it actually completed at the 70.88 H with a truncated 5th, as shown as my alternate.

iii = i at 72.06. iii = 1.618 of i at 73.48. If correct in my assessment of structure, we should see price start to accelerate to the upside as it hits its wave iii.

Crude is setting up to finish its minor C leg. This should time fairly well with the dollar completing its 2nd wave.

Bank need more capital???

Seem JP Morgan is seeking more capital to sure up its books. They are selling 23 properties which will be the largest commercial real estate transaction this year.
Now if JP Morgan has to do that, I am really and truly questioning anything these banks say about their books. GE lying now JP Morgan selling assets, definitely these financials are still on rocky grounds.

DEAD DAY

Remember today is FED announcement. Coupled with summer August action I can guarantee that volume will be extremely low

984.25

984.25 is still valid from August 6. Lets see if it gets hit this week.


984.25

WYNN -Short

Nice grab on that WYNN short 57 yesterday.

Confused

I hear analysts coming on the media saying we are in a new bull market, then I hear some saying we in a bull market but we at the 50% retracement from the highs to lows on the nasdaq, which is rubbish if it is a 50% retracement here you can't call it a bull market (IDIOTS).
Well all I know the market looks extremely tired and volume looks weak ( remember August is a holiday month in Europe) so that could be the reason.

Anyways 1006/7 number on the S&P seem to have been a decent place to short- Got that number all over the place that's why i have been talking about it for the last 2 weeks. My only serious problem with it is that it went over a few points which leaves me wondering. Well just very short term because I think we still go a little higher.