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OfflinegeokillsA
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Registered: 05/08/01
Posts: 23,417
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Wall Street losing its own confidence game
    #7891031 - 01/16/08 11:19 PM (16 years, 16 days ago)

First, a look at what's happening:







And now, an inspiring piece for an agressive newb0r investor such as myself... downright poignant even! :thumbup:

Wall Street losing its own confidence game
12:01a ET January 17, 2008 (MarketWatch)

SAN FRANCISCO (MarketWatch) -- If it wasn't so scary for the rest of us, the once-in-a-generation
crisis shaking Wall Street right now would be a joy to watch.

After all, how often does the average Joe get to see the masters of the universe shaking in their
pinstriped suits, filing out of Mammon's New York fortresses with pink slips in their hands,
brows furrowed as they calculate how long their last bonus will pay the rent on the Park Avenue
duplex.

Unfortunately, this is no laughing matter. For all its faults and egos, Wall Street is the engine
that powers the global financial system. When it's in crisis, we are all in danger. That's why
it's time for the purveyors of the ultimate confidence game -- the markets -- to stop looking for
the end of the world and get on their Bloombergs and start trading and lending again.

The first two weeks of the new trading year have seen the credit crisis that began last August
steer the national dialogue from one of a fear of recession to one of potential financial
Armageddon, with the rescue of Countrywide Financial Corp. by Bank of America Corp. triggering
concerns that more financial institutions may need to be bailed out or fail before this is over.

Another way of telling that the shutdown in lending and surge in mortgage and credit loan
defaults has finally reached the pain threshold of America is that the politicians and
presidential candidates have started to respond. Although the credit crisis started six months
ago, it really wasn't until the past week that they declared the immediate priority of the
country to be the rapidly weakening economy -- not the war.

Of course, everybody was quick to put out a plan. And that's better than nothing. But let's face
it, no stimulus plan of any short-term effectiveness has a chance of getting through Congress in
time to stave off recession, if indeed we are entering one. The debate has shifted, which is a
good thing. But Wall Street created this bubble -- with the help of every home buyer -- and Wall
Street needs to get us out.

Amid the carnage of Citigroup , Merrill Lynch & Co. and Countrywide, among others, some heads
remain level, and they are setting the agenda. Until now, they've been the sovereign funds -- the
international, often government-controlled asset managers who have quickly jumped in and carved
up tasty pieces of some of the U.S.'s biggest financial institutions. They aren't selling.
They're buying.

While the debate in Washington stalls on whether it's smart to let the Korea Investment Corp.
own a piece of Merrill Lynch -- forget that Wall Street banks have been buying into China and
other parts of Asia for years now -- the practice of globalization has gone on just fine, from
an international perspective.

But it won't really turn things around until some of the bargain hunters begin to emerge on Wall
Street itself, something we thankfully got our first signs of in the past few weeks.

Bank of America's decision to bail out Countrywide, while likely made for selfish reasons to
double-down on its existing investment in the troubled lender, is a sign that one of our biggest
banks is willing to stick a stake in the ground on this crisis. The New Jersey pension fund's
bold move to buy a piece of Merrill this week along with more sovereigns, is another example of
confidence emerging again. And what better example do you need than that of Jamie Dimon, chief
executive of J.P. Morgan Chase & Co. , brashly declaring amid a 34% decline in quarterly earnings
that the crisis makes the idea of him making an acquisition even more likely. Washington Mutual,
anyone?

If anything, the crisis has exposed the hedge funds and the private equities barons for the
flimsy, fair-weather funds they are, completely frozen when it comes time to put up some real
cash. In their place, the healthy banks and pension funds are moving in to help try to save the
structural underpinnings of the financial system.

This is the type of confidence that made Wall Street famous, and which at some point will pull us
away from the abyss, perhaps sooner than we think.


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··∙   long live the shroomery  ∙··
...π╥ ╥π...


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InvisibleZippoZM
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Registered: 06/17/03
Posts: 13,227
Loc: Pongyang, North Korea
Re: Wall Street losing its own confidence game [Re: geokills]
    #7892995 - 01/17/08 01:08 PM (16 years, 15 days ago)

honestly, it would seem to me that this is a time to buy, and not sell.....

what do you think geo?


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PEACE

:mushroom2:zippoz:mushroom2:



"in times of widespread chaos and confusion, it has been the duty of more advanced human beings - artists, scientists, clowns, and philosophers - to create order. In such times as ours however, when there is too much order, too much m management, too much programming and control, it becomes the duty of superior men and women and women to fling their favorite monkey wrenches into the machinery. To relieve the repression of the human spirit, they must sow doubt and disruption"

"People do it every day, they talk to themselves ... they see themselves as they'd like to be, they don't have the courage you have, to just run with it."


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InvisibleIcelander
The Minstrel in the Gallery
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Registered: 03/15/05
Posts: 95,368
Loc: underbelly
Re: Wall Street losing its own confidence game [Re: ZippoZ]
    #7893581 - 01/17/08 03:51 PM (16 years, 15 days ago)

If you have the reserves that's true IMO and will be more true over the coming months.


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"Don't believe everything you think". -Anom.

" All that lives was born to die"-Anom.

With much wisdom comes much sorrow,
The more knowledge, the more grief.
Ecclesiastes circa 350 BC


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InvisibleVeritas
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Registered: 04/15/05
Posts: 11,089
Re: Wall Street losing its own confidence game [Re: Icelander]
    #7893656 - 01/17/08 04:06 PM (16 years, 15 days ago)

The investors who continued to buy during the Great Depression did VERY well once the market rebounded.

The most sensible advice I've heard about the stock market:

1. Invest regularly in a diversified portfolio. If your resources do not allow you to adequately diversify, then invest in mutual funds which pool resources from many investors in order to provide affordable diversification.

2. Do not sell when the market is down. Keep making your regular investments.

3. Remember that the way to reliably make money in the stock market is to think LONG TERM. Stay in, invest regularly, and you will see a decent return on your investments.

4. Don't invest money you cannot afford to lose. Establish a rainy-day fund FIRST, in a vehicle which does not place your principal at risk (savings account, CD, money market, govt. bonds or t-bills). Don't touch this money unless you really need it, and don't consider investing it.

5. Watch your tax liability. If you can invest inside a tax-advantaged retirement account, your $$ will go a lot farther in the long run. (Especially if you have few deductions.)


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