Posted on 10/09/2008 12:59:03 PM PDT by Red Badger
It's just awful! But I can't get FOX Business so It's Bloomberg and CNBC.
A Republic is a system of Government, characterized by the Rule of Law. When the Law Rules, that means people who break it get punished. If people are not punished, then there is no Republic.Why so "punishment averse" Jason? Is there a cookie jar somewhere with your fingerprints in it?
Quack quack, waddle waddle: Extortion."Give us you money or vee burn down de store"
1. Demoralization
2. Destabilization
3. Crisis
4. Normalization
I’m not an expert but I asked someone the other day who was buying and was told the companies that issue the stock must buy it back when it’s offered.
Ah, thanks....that helps clear it up a tad...
Open ended mutual funds fit that description, but not stocks in operating companies themselves. Such funds own shares of operating companies and sell said shares if their own investors present mutual fund shares for redemption, but in that they are simply middlemen. They do what their customers do.
Okay, then explain to me who is doing the buying? If a stock is tanking why would anyone buy it? It seems to me someone is forced to buy it otherwise the market would shut down ‘cause people would say “I’m not buying until it gets even lower.” Like I said, please explain to this dummy.
As for who is buying this instant, though, first off the governments are, obviously, and second lots of people who think the government's intervention means stocks that looked too risky last week aren't so risky anymore. If Royal Bank of Scotland and Morgan Stanley were about to go bankrupt and stick everyone else with lots of losses on bad debts, you are in one world. If they aren't going to go bankrupt and any debts they've contracted as money-good, you are in another world. Both were on the ropes, and between them they have $4.3 trillion in debts, and both are out of danger on the government actions.
So, for example, an index of the preferred stocks of financial companies that was yielding 16% on Friday and selling at 40 cents on the dollar of its original issued price, today is yielding 11% at 57 cents on the dollar of its original price, having jumped 40% in just 2 days. Clearly it was a screaming buy when people were dumping it as likely to be wiped out by bankruptcies of large banks, that just are not going to happen.
Does that help? Or are you still under the impression that anything moving upward over the last week is worth infinity, and anything moving downward is worth zero? These are real companies, not poker chips. They pay their investors. The lower the price, the higher the future return, and vice versa.
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