This is a guest post from Upsidetrader
It’s hard to believe that it was a year ago today that the Dow Jones plunged 777 points, it was the same day that the Senate voted against Bush’s first attempt at a stimulus plan.
Bank of America closed that trading week at around $32, some of the courageous value players took a position at that level only to see their investment drop over 80% by March, as the stock broke $5 and traded to a low of $2.53.
Unless I’m wrong, we will probably never see that Armageddon type scenario again, after all, it takes years, if not decades, to create a bubble as magnificent as the one we witnessed.
What could be the next catalyst I wonder? The absolute breaking of our buck? A serious war in the Mideast that involve nukes, oil going back to $150 or higher? I think if we broke the $72-73 level on the Dollar Index again, folks may start whispering about the possibility of an economic meltdown, but that’s just me.
I would like to think that a near death experience has a tendency to change a human being for the better, I think that is probably true in most cases, but I am wondering if the same holds true for market players after our own brush with death. When Rome was burning, some Wall Street analysts still could not bring themselves to put a “sell” on a stock, as matter of fact they were increasing target prices on some names. After all, cheaper is better, right?
Many of those Ivory Tower analysts wander the canyons of Wall Street today,completely unsupervised, fooling themselves that masses are waiting for their next prescient observation or recommendation.The sell side will take their thoughts to the institutional buyers and the song remains the same. Nothing has really changed.
In the meantime I’ll just wait for the next bubble.
Around the Horn:
-Futures are slightly lower this morning
-Asian markets have rebounded roughly 1 to 2%
-BNP Parabas is raising about $6billion
-Crude holding around $66
-FDIC continues to run out of cash
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