This meltdown has more to come. Just wait till the boomers start to move their mutuals into defensive plays.
In 1990 it was the defense industries. Then 2000 was the dot.com, and this time around it is the financials. All related to the ole fart Greenspamm! First he killed the dot com with high rate, and in the panic, he lowered it so much that created a un-timely housing boom right before the boomers start to retire and cutdown their housing needs. What a perfect storm this is !!!
There is NO MARKET for commercial papers now, and that is the bloodline for the economy. I am not sure lower the FedRate will do much to convince financials to buy those papers at any price.....
Capitulation is happening as we speak. It's a matter of how far will this go down, for how long.
Another scary thing is that whenever this kind of sh't happened in the past history, there was a broad scale world war followed........
<<Another scary thing is that whenever this kind of sh't happened in the past history, there was a broad scale world war followed........ >>
With panic like this, maybe the bottom is not that far away.
I listened to CNBC all morning along with Bernanke's talk to Congress. To me, two important things were said.
We are not pointed to a recession, only a slowdown in the GNP (maybe to 1%?) this year and into the beginning of 2009. That's it...if we are to believe him. He's probably right...but a 20% decline in Nasdaq is justified under that scenario...and we're already down 18%. At 20% we're on the fridges of a "Bear Market", which doesn't have much practical value in telling us where the market will go in the future.
For me, a technical guy, the whole guessing game becomes simplified. When the Nasdaq hits 2345 I'll put 2/3 of my cash into the market.
BTW, LDK was the stongest stock on my watch list today. So stong that I was quite surprised. It can't be explained by short covering alone. Therefore, it will be No.1 for purchase on my solar list when the time is ripe...maybe even tommorrow. Today it was acting a lot better than all of the "quality" solars.
And if CMED gets to 45, at support level, I'm in. The 50 day MA is at about 43.90...but it's far too soon on it's chart to test that level. This is not the past... and the stock has new technical and fundemental stature...so forget about getting it at a collapsed price. All IMHO.