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

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These are the sentiments that occur at a bottom. If the mkt is down more than 600 Dow points tomorrow on heavy volume ( more than 4 billion shares ) that could mark the selling climax. Companies like AT&T General Electric Proctor and Gamble Johnson and Johnson Exxon and Pepsi etc are insulated from the credit mess. On Monday I would be bidding for those stocks at 5%-10% below the price they closed on Friday.


Good points. The entire economy of the Unite States is not collapsing.
 
Old chinese curse "May you live in interesting times". In my calmer moments I wonder what I really have to be scared of. I have my health. To paraphrase Thoreau (I believe it was he) Security doesn't come from having things, it comes from knowing you can do without them.


Amen.....Well stated! :clap:
 
  • 30 Servings - Potato Bakon recommended wine pairing: Alta Vista, torrontes, salta, argentina, 2006
  • 25 Servings - Corn Chowder recommended wine pairing: Licia, albarino, rias baixas, spain, 2005
  • 25 Servings - Ala King recommended wine pairing: Adriano, white meritage, douro valley, portugal, 2005
  • 25 Servings - Cacciatore recommended wine pairing: Prius de Morana, verdejo, rueda, spain, 2005
  • 25 Servings - Western Stew recommended wine pairing: Protocolo, tempranillo, laguardia, spain, 2005
  • 45 Servings - Whey Milk recommended wine pairing: Raimat, cabernet sauvignon, costers del serge, spain, 2001
  • 25 Servings - Blueberry Pancakes recommended wine pairing: Croft, port, portugal, LBV 2001
  • 25 Servings - Barley Vegetable recommended wine pairing: Thunderbird

    I would like some domestic alternatives as I am sure anything european is now quite out of my reach. I can get the Thunderbird easy enough.
Did they suggest wine pairings with this as well?


.
 
"... If the mkt is down more than 600 Dow points tomorrow on heavy volume ( more than 4 billion shares ) that could mark the selling climax..."



Maybe


"... Companies like AT&T General Electric Proctor and Gamble Johnson and Johnson Exxon and Pepsi etc are insulated from the credit mess...."




But their customers may not be.




"... On Monday I would be bidding for those stocks at 5%-10% below the price they closed on Friday...."


Only under rare circustances will I be buying individual stocks; not
enough money to play that game (and one must have a LOT of money
or a lot of luck or a very long time-window to play that game.)

At some point a "buying opportunity" will present itself. For me, I am
not convinced that time is upon us.

At that time, index funds will most likely be my choice.





"..Good points. The entire economy of the Unite States is not collapsing..."



Yet to be proven. The economy is highly dependent upon the "consumer,"
and the consumer can no longer borrow against (nonexistant) home equity,
can no longer borrow against shrinking limits on credit cards, is currently
increasing borrowings against 401K's (i.e. borrowing from the future to finance
the present & past).

As for spending "savings," well.....what savings?


I think we have a ways to go, yet.
 
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Re: Bear Stearns Fails Lehman next ??

Is Lehman "the other shoe?"


http://dailybriefing.blogs.fortune.cnn.com/2008/03/17/lehman-brothers-faces-a-storm/

"Shares of the brokerage firm slid 15% in early trading after the firm said it’s got enough cash to keep doing business. The firm made the statement after a big Asian bank asked traders not to do new transactions with Lehman, The Wall Street Journal reports. That decision raises the possibility that Lehman will face a run like the one that brought down Bear Stearns (BSC) this weekend...."





And cheery news from Alan

http://money.cnn.com/2008/03/17/news/economy/greenspan/index.htm?postversion=2008031707

"NEW YORK (CNNMoney.com) -- Today's economic condition could likely be seen as "the most wrenching since the end of the second world war," wrote former Federal Reserve chairman Alan Greenspan in the Financial Times on Monday...."
 
This thing will get a LOT worse before it gets any better. This business of being highly leveraged in all aspects of the economy (housing, investment bankers, etc) is extremely deeply rooted and it WILL take a long time to resolve itself.

Some people and businesses will go broke (and that is not all bad, believe it or not).:(:(:(
 
Can any bank see a 40%+ drop in stock price in a single day and survive? Nat City is about to go under.

Insolvency of Regional Banks is another step in the process.

I'll have another Guiness please!
 
Of course, Greenspan goes on to claim the current situation could not have been predicted, and that a return to his policies is the only thing that can save us now.

In the article cited above, Greenspan writes, "Those of us who look to the self-interest of lending institutions to protect shareholder equity have to be in a state of shocked disbelief."

Shocked disbelief? Seriously? I know NOTHING about markets beyond what I absorbed of economics from studying history and it seemed clear to me when he was praising the "resourcefulness" of the markets with the creation of ARMs that he was fueling the irrational exuberance. It sounded like 1928 -- buy stocks on margin, they never go down by very much or for very long! There's virtually no risk!

Now, he's telling us with a straight face that the government should always be ready to step in to mitigate losses in a bust, but never intervene with regulation to limit the size of the bubbles and windfall profits in the booms. I read that as the very wealthy should be encouraged to take huge risks and accumulate vast amounts of wealth, but should not be allowed to be completely wiped out when they exercise poor judgment because they are the economy. So, if some poor schmuck lives in a house in New Orleans without flood insurance (which wasn't required because the levees were backed by the full faith and credit of the U.S. government) and loses everything, that's the roll of the dice, that's the way market's work. But if a Wall Street firm rolls the dice and comes up empty, it is incumbent upon the taxpayers to bail them out?

I brings to mind another phrase from history -- Privatize the profits, socialize the losses.

Am I oversimplifying? Is there something I'm missing?
 
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