RE: STAY CALM and HOLD!160kI don't believe in conspiraciy theoris either - just in trusted friends in the various sectors of the investment and banking industry.
Trust me - Central Banks and heads of large national financials talk to each other. They need to. They are the gatekeepers to a stable economic system otherwise it would be sheer chaos out there (which it is not, inspite of the existing roller coaster).
At the end of the day, yes we can blame politicians and regulators to turn a blind eye to various schemes created to generate huge returns (that was the case behind this latest bubble)...but remember, the reason why all these banks got caught pants down is that we, boomer shareholders of today, have been so addicted to the 20% growth in ROIs and want so much a secure retirement inspuite of our excesses that we demand instant proof that Q over Q returns show a steady upline. The wizbang chiefs of the investment industry are always under the gun to
and aside from the crooked ones, most would be glad to have normal days, investing long term and generate smaller but steady long term growth in good companies.
In other words: the mindset of the stock cowboys of the mining sector in decades past has now permeated the general "investment" community. Is Facebook really worth $15B (according to Msft latest stake in it)? Is it sensible to lend someone 120% the value of their intended house purchase while their credit rating doesn't pass the test (according to some sub prime lenders that are no longer in business)? Really, what's the diff between the 2 cases? None.
So we agree: greed is the driver. But not just by a few.The panic only exists when the freefall affects the elite.We are far from there yet. Remember that the huge write downs by banks would be recaptured within a year or two of future profits once the shaking is finished. The Central Banks are ensuring relative stability - and they need to know what large financials have to go through, and help them manage the transition. Not conspiracy. Just careful management of the system. Most of us benefit from it one way or the other.
DJ is heading to 11300 or so in my books, at some point in the future. It should rebound from there...but of course one never knows what other skeletons may be hiding in some closets in scenes far away from Wall Street...(who woud have thought that Chinese Banks are key lenders to the US financial system? Who would have thought that Chinese banks themselves had some exposure to the subprime? Yup it's a global system all right...) 