Where does it end?
NONE of this should be construed or interpreted as advice.
Philip Murphy asked where the bottom will be for the Dow. Here's is what I can say at this point. There is a significant uncertainty as to how much the government bailout (Pelosi called it a "buy-in" - uh, hmmm, No!) There is significant over-leveraging throughout the world that is falling apart. (See European bank failures announced today also.)
While there may be a short-term boost (or at least a pause in the downward move) due to the government program, I expect the down to continue. It will not surprise me to see us go as low as 8300-8400 on the Dow before it is all said and done. I expect significantly more bank failures. This morning's buyout of Wachovia and last Friday's failure of Washington Mutual are 2 big examples, but I expect there will be a LOT of smaller banks fail. This will be caused by AND will cause a lot more fear in the economy.
You see, there are 2 emotions that rule the market - fear and greed. Guess which one is in control now...
BTW, NONE of this should be construed or interpreted as advice.
Addendum - Wow, what a day. I expect a bill to be passed fairly quickly. I expect the market to respond positively to that passage. Whether that response will be as "severe" as today's is a bit less clear. I can say that there is a LOT of money sitting on the sidelines, waiting to feel that it is safe to get back in the water. The most aggressive will leap in, but the smart ones will only stick a toe or two in at first. Stocks *are* getting cheap. But there is much illness in the markets that has to work its way out - and no bailout can supplant the need for the process of actually getting healthy. Cancer takes aggressive, risky medicine - and the process is VERY painful, with ugly side-effects. Addicts go through withdrawal. Well, we're so addicted to credit that we have the DTs. And we may have cancer from our long-term exposure to a credit-driven lifestyle. Again, NONE of this should be construed or interpreted as advice.
Philip Murphy asked where the bottom will be for the Dow. Here's is what I can say at this point. There is a significant uncertainty as to how much the government bailout (Pelosi called it a "buy-in" - uh, hmmm, No!) There is significant over-leveraging throughout the world that is falling apart. (See European bank failures announced today also.)
While there may be a short-term boost (or at least a pause in the downward move) due to the government program, I expect the down to continue. It will not surprise me to see us go as low as 8300-8400 on the Dow before it is all said and done. I expect significantly more bank failures. This morning's buyout of Wachovia and last Friday's failure of Washington Mutual are 2 big examples, but I expect there will be a LOT of smaller banks fail. This will be caused by AND will cause a lot more fear in the economy.
You see, there are 2 emotions that rule the market - fear and greed. Guess which one is in control now...
BTW, NONE of this should be construed or interpreted as advice.
Addendum - Wow, what a day. I expect a bill to be passed fairly quickly. I expect the market to respond positively to that passage. Whether that response will be as "severe" as today's is a bit less clear. I can say that there is a LOT of money sitting on the sidelines, waiting to feel that it is safe to get back in the water. The most aggressive will leap in, but the smart ones will only stick a toe or two in at first. Stocks *are* getting cheap. But there is much illness in the markets that has to work its way out - and no bailout can supplant the need for the process of actually getting healthy. Cancer takes aggressive, risky medicine - and the process is VERY painful, with ugly side-effects. Addicts go through withdrawal. Well, we're so addicted to credit that we have the DTs. And we may have cancer from our long-term exposure to a credit-driven lifestyle. Again, NONE of this should be construed or interpreted as advice.
posted by MichaelPolutta at 11:39 AM
2 comments
