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Saturday, September 20, 2008

Five Days That Shook The Financial World

Click to enlarge.


Anonymous said...

Nothing to speak about here, move along. The Russians and the Chinese own the US and we are starting to come to grips with that fact. We have ineffective pawns as purported leaders in this Country, always ready to sell the average person down the shitter for a few $'s. We get the democracy we deserve. We are sheep being led to the slaugter without a clue. Wake up Monday and pay your $3500/person tab to fund the bailout of these theives!!!!

Mista B said...

As a student of the markets, I can say that this type of volatility exists only in bear markets. I define volatility a little differently. I look at absolute percentage moves, that is, moves either up or down. And you don't see 3% moves in bull markets. We've seen about ten this year (and a gaggle of them just last week). There were none, zero, in the bull market run from 2003 to 2007.

That said, we're reaching extreme bearishness among investors, which generally precedes a rally. My guess it that we'll re-touch the lows then climb for one to three months, just long enough for complacency to rise. Then it's lights out. Earnings are going to suck for at least another year or two, and P/E ratios are still elevated and need to compress. If the U.S. markets don't decline by at least 25%, I'll be amazed.

Anonymous said...

Dear Ben,

Thank you for your blog. While normally a lurker in most forums I read, I feel compelled to participate in these momentous times.

It seems incredible that Paulson should even be requesting for virtually unlimited powers over the American treasury to bailout the very banks who have churned these assets. If there is any sanity left in Congress, they should be calling for a commission to investigate him and those acting in concert with him for treason.

If this plan is allowed to go through, the taxpayer would first be likely to pay a premium for these assets and doubly screwed when the assets are bought back by the same banks at a huge discount. They would then be sold again for a huge profit when the market turned better.

America would become bankrupt somewhere along that process, but no matter, the banking system remains safe...