Bear Stearns Fails - Bailed out by FED Reserve for 28 days

[robertsondavies]

wow...

i guess it looks like the end of the 'buy and hold' century, post war expansion, world by the arse period our parents enjoyed is definitely ending...

If the baby boomers pull their money out of the stock market, we'll see panic selling worse than 1987.

 

[Mango]

It'a already happening for this boomer. Ironically, today Dubya speaks at the Economic Club of New York. ``Americans should have confidence that this economy will return to stronger growth,'' said White House spokesman Tony Fratto. ``You shouldn't look for new major announcements.''

Like who was looking for him to say anything intelligent to start out?

And even with all of Spitzer's arrogance everyone speaks of, at least he tried to do something in 2003 to curb the inevitable mess we are in today.
http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783_pf.html

While everyone was so tuned into the Spitzer scandal, everyone failed to notice that General Fallon resigned.
I for one am very scared as to where this Country is headed.

 

[Little Fish]

Don't hold your breath waiting for widespread panic. We are nearing the end of the credit crisis. IMO, the economy will rebound in the next twelve months due to the massive stimulus that the Fed has organized. Fed Fund rates have declined 40% since last September and this will have a huge impact on the economy.

Remember the old saying... "when there's blood in the streets, buy property".

Little Fish

 

[Mango]

Sit in your chair again Little Fish.
I considered the cyclical nature of the markets and the coinciding affects, and had a similar thought as you, for about 5 minutes. Then I remembered that we will have a change of administration. Typically the markets stay stagnant for at least 6 months, not to mention burned once, twice shy in both real estate and financial markets.

 

[TooFarTampa]

Don't hold your breath waiting for widespread panic. We are nearing the end of the credit crisis. IMO, the economy will rebound in the next twelve months due to the massive stimulus that the Fed has organized. Fed Fund rates have declined 40% since last September and this will have a huge impact on the economy.

Remember the old saying... "when there's blood in the streets, buy property".

Little Fish

I'm no expert, but aren't they infusing the economy with new cash, thus increasing inflation? The dollar isn't going to be in any better shape anytime soon then ... right?

 

[Little Fish]

TFT:

It appears clear the Fed has placed inflation fighting on the back burner in order to mop up the credit crisis before it spills over into world markets. Greenspan has been criticized for leaving rates too low for too long, which lead to the asset price bubbles the market is currently grappling with.

Bernanke will surely learn from this and begin raising rates as soon as he can. If he learns from Greenspan, it is possible that Bernanke will begin raising rates to stem inflation in as early as the first quarter of next year. Remember it takes time for the lowered rates to effect the economy. However, there is little doubt in my mind that the lowered rates will cause the market and economy to come roaring back.

Here is an interesting tidbit...

The S&P peaked on 09/09/07 at 1565. On 03/10/08, the S&P hit a low of 1273. This represents a decline from peak to trough of 18%. The decline took 5 months.

I recently read a research report on the typical recovery pattern for the S&P. From 1945 - 2007, given a market decline between 15-20%, the average decline was 18%. For a decline of this magnitude, on average, it took 4.3 months from peak to trough. From trough to peak (full recovery) it took an average of 5.7 months, leading to a full recovery in 0.8 years.

Assuming we don't break down to new lows, it appears the current market characteristics closely mirror the historical average decline. The current correction is nothing new and is witnessed every four years or so. Therefore, I'd rather hold tight than sell near the bottom.

Little Fish

 

[YoungFT]

To my fellow Atlantan, Little Fish, thanks for the dose of optimism!

I recently read a research report on the typical recovery pattern for the S&P. From 1945 - 2007, given a market decline between 15-20%, the average decline was 18%. For a decline of this magnitude, on average, it took 4.3 months from peak to trough. From trough to peak (full recovery) it took an average of 5.7 months, leading to a full recovery in 0.8 years.

I can't help but recall my statistics professors' warning on using "averages". On average, we're all neuter.

 

[Here4Good]

While everyone was so tuned into the Spitzer scandal, everyone failed to notice that General Fallon resigned.
I for one am very scared as to where this Country is headed.

I noticed that General Fallon resigned, and I noticed the reason.

One of these days W and his henchmen are going to figure out that it is REAL hard to find a competent military man who is also willing to serve as a fall guy.

They MIGHT actually have to let one run his own shop someday.

 

[robertsondavies]

Little Fish,

following dictums and averages and sayings are troublesome.

there was 'blood in the streets' yesterday as Bear Stearns fell from $170 per share a few months ago, to $85 two days ago, to $55 yesterday... to the brave people that bought yesterday while there was blood in the street, well, today.... more blood - much more. Bear Stearns is changing hands between $26 and 36 a share for the last 4 hours.

There is another saying on wall street having to do with trying to not catch falling knives....

The good news is I don't listen to sayings, i only follow my gut when i put my poker chips down, and so I bot some BSC this morning at 34, at 33, and at 31. Please do not try this at home, BSC could be a zero....

you can all poke fun at me on Monday, or maybe even this afternoon, when BSC really starts to do a death dive -

Don't hold your breath waiting for widespread panic. We are nearing the end of the credit crisis. IMO, the economy will rebound in the next twelve months due to the massive stimulus that the Fed has organized. Fed Fund rates have declined 40% since last September and this will have a huge impact on the economy.

Remember the old saying... "when there's blood in the streets, buy property".

Little Fish

 

[goofer]

I worked at Bear Stearns from 1983 until 1991. I have stayed in touch with many people there. All of the people I have spoken to are in shock as well as quite a bit poorer !!! Many of these people who have worked there for 30 plus years will lose their jobs if JP MORGAN absorbs them, and they will never get jobs again in the securities industry because the business has changed dramatically.