RobbieG

Precisely. Those have gone and I doubt they will ever return. Thank God...

We may not need more frivolous consumer lending, but we do need solid lending interbank and to business or the whole world is screwed. Virtually every business operates on a debt model. Always have and always will. Lending and banks need to be solid if for no other reason than to make sure businesses can buy someone else's widgets so then can use them to make their own widgets. As they sell their widgets they use the cash generated to pay off the guy they got the widgets from and then buy more widgets. And so it goes. The cost of credit is pretty relative at the big picture level and less important than having the lending machine itself functioning properly...

For the record, I agree with much of what Chief says in his posts. He seems to have a pretty firm grasp on the issues at hand. This is one of them and I agree that borrowing to consume is at one of the cores. If Obama getting elected spurs change that can be seen econonmically I'm all for it, but I doubt it will be lasting, and I can tell you the The Street doesn't have that confidence as they are afraid the democratic spending model is going to be the last nail in our coffin. One thing for sure, people need to stop using the equities markets as a world health gauge. It has been operating on pure fear for some time and its movements are meaningless. Actually, they are showing AMAZING resilience in the face of certain death. Given what happened to prime lending at its worst the Dow should by all accounts have gone to five thousands but it didn't. The VIX getting over 80? Come on. These are amazing times. I don't even notice 300 point Dow days anymore. Can you imagine? If you want to know what is going on in the world don't watch US equities anymore for a while. Watch both LIBOR and the EURO/YEN cross if you want to do what the big boys do: Regarding LIBOR, look for stability when it is running a little more than half the prime rate and ideally should be fairly close to the fed target rate in a perfect world. Think about it in very basic terms. Banks have to be able to lend to each other cheaper than they can lend to top tier credit wothy clients. In other words if LIBOR is less than Prime, that difference is money they can make. Banks making money is a good thing these days. In fact, our future depends on it. Same goes for Fed Funds and its relationship to Libor. If there is a big spread between the two it signals instability. Regarding the EUR/JPY cross, use this as a barometer for global growth and risk tolerance. If the euro gains agaist the yen growth is in tact and appetite for risk in US equities is higher. Look for major US indexes to stabalize or rally. Conversely if the Yen is gaining on the Euro, growth is bleak and risk aversion is high. People would rather hold the carry trade in the low yield Yen than risk losing money in equities. Watch these two things as they move month to month and you won't even have to look at the US stock market anymore to tell whether times are looking better or worse. In closing, here is a EUR/JPY chart of the last 6-months. Can you say fear? This shows investors would rather suck wind in the low yield yen carry trade than risk being in US equities for even a second. But also notice the pennant pattern forming at the far right edge. It is building up energy in consolidation now. Many times this pattern explodes into big up moves. It is going to break one way or the other and is at a critical point here. But I wouldn't want to be short the cross right now that is for sure. Certainly if it breaks above the double top resistance at 131 or so you can expect to see it rally to some degree...

Yeah, and the world is still crumbling, isn't that hillarious? You are right, maybe we should just not talk about it. If only you would have shown up sooner to shed this light on it for us. Then instead of posting we could all just ask you what you thought instead of writing these novels depicting thoughts of our own...

Yeah, it looks like a pretty recent dial by the profile of the fonts and the thickness of the markers that have the black line in them. I would guess it came off an F or D watch and may be as recent as a Z even...

Excellent. Just excellent. So nice to see a rhodium roman with the old style case again. Where did you source the dial and do you know what serial year it came off? Oh, and how soon for a new wristshot from you bro? DJ's are classic and they rule. Big is big, but 36MM class never goes out of style.

Now were talking. Dude, when did you get this? Awesome. Do tell...

Fungible. Now there is a word I haven't heard in a while Kruz... Anyway, I really hope the world can pull out of this one, but my heart tells me the greed went too far this time. It was fun while it lasted though. The industry made a killing but the days of the banking kings are over I'm afraid and the final consequence will be huge one day. It may take another five or ten years, maybe less who knows. For Lord of the Rings fans, the time of Men is over and the time of the Orc has come. LOL. But we can all be glad for good family, good friends, good watches, and good times here on the forum. In the end, these things is all there is anyway and that is more than enough...

I would buy property tomorrow as an investor under those terms and keep buying until I ran out of money. There are a lot of great deals around right now especially in Florida. Get is passed I say.

As a side note, it is a good thing we never have to depend on debt to buy our watches here!

Ah, but it isn't traders trading. That is just it, they weren't trades and that is the problem. They weren't free market transactions. Make no mistkae, this is NOT the same thing as the so called oil crisis being caused by speculators. I have never heard more of a load of crap in my life. And I also happen to be against regulation for the most part of the free market. But the fact is, the real root of the banks problems with these loans and liquidity is absolutely 100% a direct result of these so called trading activities. The real estate market has been underwater by the same percentages many times but there was never this result. Period. Why? Off market extremely levered transactions is the ROOT cause - respectfully. Playing the hand they were dealt? With all due respect - Yeah I guess so, and they invented the game, made the cards and shilled the dealer in there too. These trades were essentially the same as if you gathered all the money you had and went to Vegas to play roullette. You went every year and bet all you had on black because the wheel was rigged and you always won. Then one year you went back and somehow it came up red. As the dealer rakes your chips your a*s puckers and you lose your breath for a second. Teh end result is you are broke and there is nothing to do but take it. They got exactly what they deserved and now the only solution is failure. printing money stops the failure but wrecks the currency in the process. There is no escape. The problem is that due to the scope of the problem this is not something that we can sit back and let happen again because these institutions are holding the puppet strings to the entire world economy. And I'm not talking about regulation. There doesn't need to be any big fuss over it. What is needed is simple. No off market transactions. Do whatever you like but do it on an open exchange and all is fair. Barring that we can sit by and watch the bailout plan in action and if it does anything it will be based on luck. But luck can fuel rally's so we will have to wait an see. But the coming crisis of the currency as a result of this printed and borrowed money? From that quicksand there is no escape... BTW, I always found the endless debate between Republicans and Democrats to be more than a little silly. I also don't think it should be too tough to consider which side of the fence I tend to fall on. But Republicans pride themselves on trying to avoid printing money at all costs and blame the Democrats for currency devaluation. Meanwhile, Democrats critizice Republicans for huge deficits and pride themselves on not borrowing money. The net result is the same. When humans don't have any money they have to either borrow it or print it. Either essentially has the same consequence in the end. Failure. Where we are at right now is the direct result of greed and overlevering and it has nothing to do with politics. As a result, WE DON"T HAVE ANY MONEY. And we aren't going to get any more ever again without major consequence because of this. The world has changed. Mark my words. No administration is ever going to fix or even help fix this problem. The whole system of financial business as it is known is going to change and there is no going back. Take it from a trader that slugs it out in the real free markets every day. Hope is for suckers...

Yes, any market which isn't truly free is a problem IMO. If you and I make a deal where we keep selling the same rep back and forth for $10 more each time and then split the profits we haven't gained anything obviously. But if we were able to artificially inflate the cost of reps by doing so some people would be [censored] off. Essentially that is what banks have been doing with their loan portfolios. Trading them back and forth using complicated instruments and promising returns to investment banks (who use their own hedge funds to trade them) by cooperating. It is VERY complicated quantitative stuff but essentially there is guaranteed profit for all parties as long as the market continues to support prices without the bottom COMPLTELY falling out. That was the black swan in the equation that noone expected to come, but he did - and brought a hundred of his swan brothers. The numbers were especially out of wack because they were so artificial. Nobody else was allowed to participate except the two parties in these transactions who simply pass them back and forth and add fees each time. How to pay for the fee? Easy, I say these houses are worth $239K now instead of $238K. Sounds reasonable right? Yeah it is only a thousand dollars but at 100:1 leverage and with a portfolio of tens of thousands of homes at even these modest prices and presto - billions of dollars generated. The guy I know personally made $40M a year in his pocket doing it with just one of the top world banks and getting leverage from one other investment bank besides his own on the trading side. Anyway, to use our rep example nobody would care because we can't influence the market by doing it, plus even if we could raise prices by a dollar in the used market and we had a hundred watches to resell there would be no money in it. No leverage. An entire portfolio of loans from a major bank at 100:1 is the market. Big difference.

Thanks. And keep in mind that the stock markets are unrelated to all this really even in the valuation of the bank stocks really. The bond markets absolutely dwarf the equity markets and that is where the real power brokers of the world move money. And the most powerful of the powerful do so off-market amongst themslves. That is where the real problems lie...

Greater truth has never been spoken. I make a living from working this concept. I don't act on what I think. I react to what is. What "is" is always right - even if it is wrong by all equations which use the past as a predictor of the future. Bear Stearns was too big to fail. But it did...

Almost forgot - to the OP, I only felt the need to explain the root of the problem to contribute to you thread BTW. I think your proposed solutions, along with many others I have heard are good ones, albeit maybe not all that practical. Not that my valuation model is either or will ever happen. In any event, I think the most likely course is similar in that there will be a shift based on income in the end. People who should have been renters in the first place who never had a downpayment or credit history will need to return to that environment and the people with higher incomes and savings will still own homes, but they will just be worth less. Keep in mind that the majority of people with devalued real estate are still going to live there and make payments. Nothing happens unless there is a forced sale and at that point both the bank and the homeowner will lose, but mostly the bank and really only because of overlevering not because of the price drop. Prices have fluctuated wildly for decades in the short run and will continue to do so, but a 30% drop at 100:1 leverage is catastrophic. Prior to the CDO market that wasn't the case. The street level really doesn't matter. This issue is about bank failures and nothing else. Most people are capable of weighing the consequences and have. They have correctly decided that owning a devalued home is no different than renting a devalued home as in the end it comes out in the wash. If you rent you will pay less than the original inflated price mortgage payment almost anywhere. But then you incur the cost of relocation and risk of the market appreciating again as it eventually will so it isn't so cut and dried either. The difference in payment is marginal for most. And if it isn't they should have been renting anyway. In the end we all have to live somewhere - and we will - and the costs will be what they are and we will earn just enough to pay for it...

There is only one solution and it is already happening. Before it is over the business model of banks will change. In a nutshell, they are going to be in the property management business. Kind of like natural selection works on nature. The forclosures are going to happen and then when the banks own them and the previous owners are off the note they will rent them. Sometimes, they will save the listing process and they will rent them to the one they foreclosed on. Same solution, no overlap, no moving expenses, same result. Some will be vacant, some occupied, banks royally f*cked like they are supposed to be. Someone mentioned the free market? Exactly. I make my living in it every day and I'm close to it. All I can tell you is that the free market decided how this would all unfold based on the depth of its leverage in these instruments long ago. There is never a solution to any free market decision (read problem) other than the free market itself. Like in nature, if the dinosaur is set for extinction, so be it. In this case though the dinosaur doesn't just die off, he changes into a bird (sound familiar?). A bird who earns money renting property instead of loaning on it. Either way, they own the property. Period. Look, there is always a need for housing. It isn't like these places are all going to be unoccupied or otherwise disappear realistically. They are all mostly occupied now. The value of the notes are too high and there is no way to just erase that - other than to - um - erase it. It is called a writedown and it involves taking a loss, but at one payment or another, loan or rent, they will be filled and the gap is the loss the bank will take. And there WILL be more... Oh, and if I hear one more person say the crisis here is based on people not paying bills I'm going to scream. No offense but it is an ignorant statement. Sure, there are people who bought more house than they could afford and used the crisis as an excuse not to pay bills - again. They have been doing that since the beginning of time and they still do - post crisis. This problem came from debt on debt on debt in the form of complicated financial instruments called Klios which are a specialized form of CDO traded off market between banks. The entire banking industry was tied to a few major multi-billion dollar hedge funds who traded these with themselves for staggering returns. How do I know this? I personally know the guy who INVENTED them. He is the trading equivalent of the Manhattan Project (invention of the nuclear bomb). The instruments were specifically designed to never be transparent, to be traded OTC (meaning not on an open exchange). In other words, nobody was ever going to buy them other than the few people who were passing them back and forth in pre-arranged transactions, which is perfectly legal - but shouldn't be so more on that later. The intent is to use extreme leverage on small "market" motion to essentially lock in profits for both sides (investment bank-hedge fund & commercial bank holding the original notes) while simultaneously inflating home prices by measured amounts. Yeah that's right, I just said that home prices over the last five years were essentially set by hedge funds ahead of time. It is very, very complicated stuff and impossible to explain here, but very real nevertheless. But the bottom line is it ain't the broke d*ck who isn't paying his mortgage cause' the payment is too high... Look, I'm not trying to sound like some d*ck intellectual, but there are only maybe a hundred people on the planet who really understand how all this stuff works and so you won't see it put this plainly on the news. But this is my backyard and I figure why not try and educate some of you here the best I can about this stuff. As I said, I know the guy who invented this stuff and he is a genius. Best bond trader ever in the history of the world. Good guy too. Family man. Loves his kids and is good to his friends. Comes from a nice family. He is also on the news relatively lately and his ex-funds are being investigated. The funny thing is, he isn't guilty of fraud or anything like that as he is being charged with. It is just a witch hunt. If anything he is only guilty of John Hammond syndrome (remember Jurassic Park?). He was so busy trying to figure out if he could create a "sure thing" legally, he never stopped to think whether or not he should The bottom line is this mess was caused by traders and trading and I am happy to say I'm not one of them. We MUST regulate off market trading between banks and shift everything to the free market. In case you are wondering I'm not one of those guys obviously. I trade S&P 500 futures contracts on GLOBEX every day. It is like a real market should be - highly transparent and highly liquid. Could I make even more money engineering some bond trades off market and join the ranks of the elite in the industry. Yeah sure, I get offers every month to defect and work freelance for banks. In other words, they are still trying to do this sh*t as evidenced by them trying to hire my firm as a quant to try an engineer some more crap on top of crap to temporarily save them. Now that we are getting more and more on the math/software side of things of course we are on the lists now. But I'm happy where I am and my concience won't allow it. It is wrong. Again, the SEC must regulate OTC derivatives trading. That is the only way to clear up this mess once and for all and ensure it will never happen again. But someone has to pay, and in the real world it is always going to be the guy holding the note. There are no shortcuts. If you would like to expand your knowledge of what really goes on in banks that you will never read in a paper or hear on the news there are only two ways to do it. You can talk to a guy like me who is close to it - and feel free to PM me if you have any questions. The other way is to read the one book that has ever been published that tells the truth about bank trading. It isn't specific to CDO's, Swaps, and Klios as I talk about here but trust me, it will scare the crap out if you if you are like most and have no idea what really goes on. Fate of the world in the hands of morons for the most part. Anyway, the book is called Traders, Guns, & Money by Satyajit Das. It is a tough read but if you can get through it you will be smarter - for whatever that is worth. In closing, I was talking with some other traders last week and the subject came up of the writedowns and how to value the entire pool of real estate. Part of the problem still is that noone really knows what to write down because as I said the values have been tied to derivatives for so long. Here is my solution. It isn't perfect but at least we could get close to figuring out what the real numbers are. The bottom line is we need to value the homes based on what people can afford who live in them. Housing prices need to be tied to the income of the occupants again. They are so out of wack, here is a way to rope it back in: 1. Account for every occupied home in the US and use a combination of survey info and SS#'s for tax returns to figure the combined monthly household income of the occupants 2. Take that number and multiply it by 36%, which is the good old standard of the max amount of monthly income ones housing costs should be 3. Now take that number and annualize it, then reverse it into whatever the current 30 year fix rate is at the moment. Then account for a tradtional 20% down as a payment and that will tell you how much the house is worth. Example: A house that was supposedly worth $500K at the peak. Now the bank says it is worth $350K. Let's find out... The income if the guy and his wife is $4500/month. 36% of that is $1620. So that is the amount of payment they can afford as rent or ownership. Therefore the house is worth $300K. 20% down brings the loan amount down to $240K which at 7% is a payment of around $1600 per month. Presto... I realize this is more than crude, but if they did this across every neighborhood for entire portfolios we would start to get a picture of what the worse case was in that all the loans went bad and you had to rent them based on income alone. At least then we would know the absolute worse case for potential writedowns. I would love to know how these numbers work out because the bottom line is that if we used conventional income standards to see what homes are really worth, the whole rally of the last five years was fake. The fact is that real income basically hardly budged so the homes really should be worth about what they were when it all started. I guess we could skip all this and just do that then. LOL...

I am about to start on my own 1680 journey and need some inspiration. I would love to see as many as possible - along with some detail about the mods you did, gen parts, etc. So thanks in advance and post em' if you got em'...

Now that is a big watch - too much so for me, but they are very nice and interesting designs. Yes, wristshots would be nice...

I can get one for you for $5400 new. PM me and I'll steer you if you like.

Thanks for all the additional compliments guys. Much appreciated. It really is an amazing piece and an important part of my collection. Glad to be able to share it with you all. Now if they would only give us a great UN rep or two so those of us not likely to get the gen for whatever reason can share in the UN experience...

My guess is supply economics. Movement making is much more expensive part for part than any watch so they need to only do what can be universally accepted in most watches - hence ETA. Rep buyers don't expect Rolex copies - plus then they would know it was fake. But they do expect ETA. ETA has a long standing place in the rep industry. Rep buyers expect ETA as an option and it is a cornerstone of the industry. I'm sure they could copy Rolex movements but they wouldn't be able to sell them for more in order to justify the cost of doing it. ETA is a profit center for replica watches if it can be repped due to sheer volume. But let's forget all that and try and answer the more obvious question which comes about through a natural series of facts: 1. We know the Chinese rep everything 2. We know the Chinese make non reppped movements 3. So why therefore would Chinese not rep a movment when they have the technology and their entire manufacturing culture is based on it? There is simply NO reason not to rep ETA movements as long as they can command more money and be placed in hundreds of different replica watches as a universal "part" of the process... I say good for them. Even the repped ones are obviously close to the same quality since it is so hard to tell live from Memorex. I find it funny actually that they have created such a stir about it given that the end product is so good...

It is nice to see that we still have some difference of opinion here and another meaningful discussion thanks to Pug... That said, I didn't know people actually did have trouble swapping parts lately. I guess that confirms that some of them actually are fakes - and I hope somebody with a parts swap issue will chime in here and confirm. One thing has been confirmed and that is NOBODY, and I mean nobody can tell a fake by looking at it with any reliability. That has been confirmed time and time again with this thread being no different. But the bottom line is there are no absolutions in this issue and hats off to the makers then for doing such a good job. If even one person has had an experience of parts that don't swap, some of them must be fakes. Plus, common sense prevails. Why not rep an ETA stamp and cop a movement if you are a Chinese watch maker? Like I always said, they have machines that 1:1 and internal bezel mechanism in a Slevin, but they just choose not to do the movement too? Yeah, and I have the exclusive listing on the Brooklyn Bridge and I'll sell it to you for a hundred thousand... If we truly appreciate how capable the rep makers are, we have to give them the benefit of the doubt that they would rep ETA movements if for no other reason than to gain economies of scale and additional profits. The bottom line is is costs less to rep an ETA movement than buy one in bulk from any source. I hope this isn't a sore subject, but it keeps coming up obviously because it is worth talking about...

Nice job man. Also good to see some more action in the TAG section

Yeah those watches are nice BTW. My brother has the same watch. I don't think there are any good Fortis reps are there? And regarding the movements I used to laugh there for while when the rumour was going around that all nickel finished ETA's were fakes. Meanwhile pretty much every ebauche ever made that I know of in use by a major manufactory is in nickel. Go figure. Not that there aren't a ton of nickel fakes as well as gold ones too of course. I still think that the majority of the new ones in reps are copies but who cares if they are as long as the parts swap and they are high quality.

They are ALL fake dammit - even the Fortis one. Boycott ETA as it is not really a Swatch product but a front for a massive Chinese controlled intergalactic conspiracy. ETA is just an acronym for Evil Taiwanese Aliens