Quote:
Originally Posted by teomaxxx
To buy equities in the face of worst housing recession since 1930, 100 Usd oil, high inflation and possible implosion of few financial companies is really stupid.
Only recession proof stocks and few other exceptions from S&P could be good ones.
Where is the common sense?
|
I told you so. Maybe there will be some bounce on the way to the recession, but any gains will be given back. This week was one big bloodbath and I am kicking on my head, why I covered some of my put options and why I didnt sell some of my stocks and bought them much cheaper today.
Yesterday and today decline isnt mainly about recession, its mainly stupid market who finally figured out, that two of the biggest monoline insurers (ABK, MBI) are going under...as their every other competitor already did it.
these two companies, with 1.5 bilion market cap, insure around 1.2 trilion of debt.
http://finance.yahoo.com/q/bc?s=MBI&...=on&z=m&q=l&c=
http://finance.yahoo.com/q/bc?s=ABK&t=3m
"Losing the AAA stamp would cripple the bond insurers and throw doubt on the ratings of $2.4 trillion of debt the industry guarantees, causing as much as $200 billion in losses, according to data compiled by Bloomberg."
Their current AAA ratings are biggest joke ever and once they are done (MBI, ABK) and bankrupt, you can talk about immediate 100$ billion write-off in financial industry.
That day wont be great for any stock.