A good interview with Buffet that reveals his current take on the markets:
http://cosmos.bcst.yahoo.com/up/player/popup/? rn=289004&cl=9990956&src=finance&ch=4043681 (copy the broken link into Word or Notepad to put it backtogether and copy/paste into a browser address bar - sorry I went off URL directors). brian_z --- In [email protected], "brian_z111" <[EMAIL PROTECTED]> wrote: > > A heads up, as Tomasz would say.... US short selling 'ban' due to > end ... likely to be extended. > > An article discussing the outcomes of the ban so far: > > (scroll down to "Don't Blame The Short Sellers"). > > http://finance.yahoo.com/tech-ticker > > It is a not a time to let the emotions run hot ... those who are > keeping cool, calm and collected are doing well ... they are bad days > for investors and savers but good days for value buyers and speculators > (condolences to anyone who has lost money .. a 63 year old, 2 years > retired, friend of mine, with invested retirement funds, is now heading > back to work). > > > FWIW an opinion on where we are now. > > There are three things happening simultaneously, each with different > outcomes: > > > a) The real crisis is confined to the area of Financial Management, as > opposed to the market i.e. the way that businesses carry out financial > transactions between themselves, their compliance with govt standards > and the standards in force. > > The longer term agenda is that of the IMF Global Stability Forum (as > discussed at last weeks unofficial meeting of G20 leaders in NewYork). > > http://www.fsforum.org/publications/r_0804.pdf > > The short term affect on the markets is minimal since that horse has > already well and truly bolted. > > Projecting this crisis onto the market holds little value for traders. > > b) Public perceptions of the crisis are focused around the security of > their deposits .... this is the real danger in the short term ... it > appears to be easily contained by Govt actions to guarantee > deposits ... presumably ave private savings are far outweighed by ave > private debt so the total possible withdrawals are within a containable > range (respective govts have deep enough pockets to insure private > savings e.g. Ireland, France, US increasing FDIC insurance etc). > > c) Market volatility ... is more emotional than rational ... emotional > outbursts tend to come quickly and swing back the other way quickly ... > by nature they can't be sustained for long periods of time ..... after > the first few extremes they tend to diminish in strength.... the longer > between episodes the lesser the chance for another extreme event. > > The reality is that the weaker companies are passing into stronger > hands (the market is doing its job). > > Currently banks can't maintain lending levels because they need cash > reserves to cover the mini-run on the banks... this is flowing onto > other businesses, who will in turn suffer lower sales/earnings (new > shorting opportunities are created!). > > http://biz.yahoo.com/ap/081001/auto_sales.html > > http://biz.yahoo.com/ap/081001/economy.html > > This cycle, of a shortage of bank liquidity, will soon come to an end > but it will take some time to get the machinery, in that area, running > again. > > On top of that large financial institutions have had their portfolios > slashed (on paper) OR are in damage control OR are in the process of > integrating merged companies so there is not so much cash around, > amongst the big players, to buy stock and hence support a stong bull > rally (compare to Buffet who keeps 10Billion acquisition cash in > reserve and has now so obviously revealed his very simple strategy of > using it to buy high probability growing yields when the price is > right). > > A side play to the whole scenario is that the Banks, that are holding > big exposures, are playing it for all they can to maximise their own > returns. > > > As long as guarantees of bank deposits are in place, and hold, the > crisis will pass ..... market volatility and Finacial Management > reforms are more emotive, than substantial issues, in the short term. > > In the longer term it appears to be a bit of a grind for the US to work > its way out of a recession. > > > brian_z >
