Friday September 19, 2008
Crisis Bulletin #2: September 2008 Update
The following text is from Daryl Montgomery, organizer of “Investing Meet-Up” sessions in New York. Investing Meet-Up gatherings bring together professional as well as lay investors to discuss investment opportunities, economic trends, and risks. The sessions are outstanding.
“Some of the most incredible market news ever has happened in the last two days. The free-market as we know it was suspended this morning when the SEC (along with the UK Financial Services Authority) banned all short-selling on financial stocks (yes, just financial stocks). Meanwhile, there was an emergency Congressional meeting last night to set up a plan for the U.S. government to buy up the toxic mortgage bonds and other assets from the big banks and remaining brokers (soon to be none without this plan, Morgan Stanley went into a death spiral after the last meeting and Goldman Sachs was apparently beginning to implode). Which printing press the government is going to use to pay for this bailout has not yet been announced.
Yesterday saw what seems to be the biggest money-pumping operation by world central banks in history (all being coordinated by the Fed). This was not just to save the stock market from falling apart, but to restore some normality to the bond market. Flight to safety became so extreme on Wednesday that interest rates on the 1-month T-bill briefly turned negative. World markets have responded explosively to this money pumping and the proposed U.S. bailout plan, with China being up almost 10% (the government is also out and out buying bank stocks there) last night and the UK opening up 8% this morning. The Russian market has reopened after being closed down on Wednesday and was up 26% this morning.”
If you live in the New York area, you can join “Investing Meet-Up” sessions and profit from these information exchanges. Check out the group’s website for schedule details. If you cannot attend in person, check out the group’s posted meeting highlights at:
http://investingmeetup.blogspot.com
and view extracts of actual presentations at:
www.youtube.com [search for: New York Investing Meetup].
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