The stock markets are gyrating wildly. Every day brings news that in more sedate times would have been thought to be science fiction (or maybe horror.)
It’s quite possible that there “will be a run on thousands of highly leveraged hedge funds” these next few days. This means they will have to dump their holdings on the market to meet redemptions, something that will only increase volatility and chaos. Sharks will then attack anything that looks wounded. Welcome to the jungle.
I’ve been trading stocks and options, mostly puts, which increase in value as the stock drops. These past couple of weeks have me, and I suspect most anyone close to the market, fried. There’s also a sense that these times are historic, will be written about in history books, and decisions made now will have vast and unalterable repercussions. I’m also willing to at least consider the possibility that Paulson may have stopped – at least for now, hopefully for good – a complete meltdown in the world financial markets. Yeah, I think it did get that close.
“Me, I’m sitting so patiently / Lying on the floor / Just trying to do this jigsaw puzzle / Before it rains anymore.”
I don’t profess to be a financial guru… But the more I read about the bail out, the more I think it should not happen. The biggest joke I hear is about trying to guarantee that tax payers will profit IF these worthless pieces of paper can be turned around.
If they could be turned into profit the banks or someone else would have already found a way and done that. And if the government could magically do it, do you think the banks would ever be dumping them on the government? They would let the gov work the magic and keep the profit.
Cho at ePluribus Media summed it all up a week ago. (paraphrased)
“Privatized Profits and Socialized Losses”
There is the new economy in a nutshell.
And little investors like you or the average citizen? You don’t have the tools – the lobbyists, the corporate backing, the insider access, the “too big to fail” marketing campaign, etc. etc. – to compete in this new economy.
Dude…. that egg looks NASTY.