RE: RE: Lawsuit Relating to Endako DismissedI think that's already been priced in. When S&P said "cutting the U.S. deficit by $4 trillion would be a good start", and only $2.1 trillion was cut, the U.S. already earned it's downgrade--end of story. That's why raising the debt ceiling did nothing for sentiment / the markets. This recent selling was panic selling on well substantiated rumours that a downgrade was already in the works, and sure enough...
If you read on Reuters, the general concensus is this downgrade was already expected. What is incredibly interesting is that the S&P500 and Dow 30 are sitting almost EXACTLY where they were on Sep 15 2008--the day Lehman Brothers died. The 2008 crash had a lot to do with wiping out wealth stored in Lehman's books (which think was ~$700 billion, because Barclays paid $1.35 billion for all North American assets of Lehman, but Lehman had ~$630 billion in debt, and $155 billion in bond debt). That wealth had been bought, and redistributed around global markets, so it`s a null issue now. QE2 from the Fed wasn't even worth the losses from Lehman. That just goes to show, Lehman's collapse was worth a -QE2 effect on the general market. Right now, I don't think that quantity of assets are under threat in any particular company. So, the only threat left is sovereign debt.
What has scared the markets is, "if you can't count on the governement, who can you count on?". Well, the truth is, governement is disfunctional at times...but it's the best we have, and typically, in the end, it does pull through. Look at Greece--riots over deeply unpopular governement austerity--but despite that, the governement passed the legislation. And the same happend in the U.S.
The bottom line is the ECB will print more Euros, and the Fed will print more dollars. They'll both keep printing, until governments get their acts together on financial reforms (taxation changes, etc.). At least Berlusconi and Italia have figured that out right pronto!
I think buying a little here and there through this is a smart thing to do. Yes, you could end up being down a lot, but that's why you keep averaging down when you can. 2008 was an extreme annomaly. Is it happening again? I'm going to bet we're going to consolidate around these levels. 2008 aside, every other time the market has correct >=10%, a bottom has shortly followed, thereafter. The S&P500 is almost 15% corrected from the April high--that's huge. It's very close to how we corrected last summer. The S&P500 made a head and shoulders top, and in just a few days is already very close to the projected price. Just sit tigt and see what happens. If you bought $14.00 TCM, I really don`t think there`s much point in selling now.
Good luck, All