Sunday, September 14, 2008

Long time

Hi friends.

I have been busy for the last few months with work and school. I am sure that it must be surprising to see how turbulent the market has been over the last few weeks. The market is at a significant turning point as I write this post. With the S&P futures falling 43 points and the dollar/yen falling to 105.65 -2.20 this marks severe market turbulence.

LEH has filed for bankrupty - http://www.cnbc.com/id/26708143

Bank of America has bought Merrill Lynch for over 2X what the company was worth - Merrill bought out for $44


and

AIG, a Dow 30 component says that it needs financing immediately or it will not survive - AIG in credit crunch

We have now reached a point where you need to make a decision. Will you keep believing what they say on CNBC and what the fed says about the economic state or will you start listening to the market now that it is at a roar?

If you want to get updates on the details I suggest reading Mish's blog:

http://globaleconomicanalysis.blogspot.com/

He has been right about this mess for a long time.

The bailout of Merrill Lynch MER by Bank of America (it was a bailout, that will become clear in the next few weeks) is another sign that the financial system was on the brink of collapse today. However, there are too many moving parts and not enough repairmen on hand to keep jumping in and fixing problems. At some point, the machine is going to stall and catch on fire. Just stand clear when that happens.
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