Thornburg Mortgage, which was considered one of the safest, announced massive margin calls on their losses, another casualty. In addition, UBS announced billions more in possible write-downs due to the sale of a large chunk of their Alt-A portfolio. This kind of stuff is going to be going on for quite some time. When will the market finally get tired of it and sell off in a big way?
For those who are interested in "investing" in well known companies, this truly will be a good year to stay out of the market in general. One way I look at it is this. Try to imagine what the financial headlines be saying at the end of 2008. We've been in a bull market for years. If there's any year for market headlines to agonize over losses across the board, it's 2008. At best, the market will be going nowhere, so why tie up hard earned dollars in this environment?
In this crisis of liquidity, the stock market is eventually going to be recognized as the last "storehouse" of dollars. Kind of like one big ATM. As more banks/investment companies/hedge funds receive margin calls on their non-equities investments, guess where the money's going to come from?
No comments:
Post a Comment