Skip to content

Get used to some volatile markets

Although experts say that we really have to get used to some volatile markets for a good season, that argument certainly share, one is constantly surprised when faced with such abrupt movements like that of yesterday and beyond their immediate understanding. The formal excuse for the rebound, redemption of the monolines or insurance bond by Warren Buffet, is from a theoretical point, a very good news for those who argue that the current crisis is reduced, in large part to the need to resolve a banking crisis that prevents the mechanisms of monetary policy found its traditional belt, to influence an economy in real recede. Any wind that carries the potential dark clouds outside the starry soundness of financial institutions is to be welcomed as a breath in the right direction. But that is simply not true. Or rather, is a half truth. The initial euphoria has led to the breakdown of resistance and the closure of shorts. Well, that’s technical analysis. But, unfortunately for the most optimistic, Buffet is offering advantages and has hardly changed the fundamental picture. To continue taking their precautions.

An important part of the market, moreover, has so interpreted. I recommend the following reading one of my favorite websites: Minyanville. Under the suggestive title “The kiss of death Buffet” explains quite well what is the proposal of the oracle of Omaha (I recommend that you follow the links set out in article for a complete understanding) and arrives at a major paradoxes: listing of the most theoretically more benefit from the proposal not only has not risen but has plummeted. As the author says, making rescue. And is that the news holds three tricks. One, any realization will not occur until within at least 30 days. Buy the rumour. Two, Buffet wants to relieve the monolines in its guarantees of municipal bond issues, which theoretically have the backing of a treasury that was beginning to question their role. Leave By contrast, in the hands of signatures existing coverage of those products are more toxic than those who are really hurting (CDOs backed by mortgages garbage) tested yesterday as lower estimates of results that made AIG. Three, the investor seeks miserable pay a premium for the assets of these companies more valid, whose acceptance would lead them to a safe recapitalization within a short period of time. Do discuss your performance? No. It is the market and its opportunity.

Comments are closed, but trackbacks and pingbacks are open.