What the &^$*&# is happening in the financial markets? And how should it be solved?

http://www.nytimes.com/2008/09/17/business/17insure.html?_r=1&hp&oref=slogin

Yet another bailout, and how many are to come? Main street will be paying the bill for Wall Street for decades! Tighter regulations will certainly be discussed. And too right as I see it. This is getting ridiculous. We need tightening regulations akin to the ones introduced in the thirties. But will this really happen? Said Will Rogers once: "These old Wall Street boys are putting up an awful fight to keep the government from putting a cop on their corner." But I think that we need a cop on the corner of Wall Street - a whole lot of them indeed! Years of boasting about how America kept the world economy running, and this is the result? The average American household is already in debt up to their eyebrows. How is anyone going to pay for this?

Well, enough ramblings to get a decent discussion going.

But let's try and focus a bit after ten replies or so.

Who holds the old maid...well, AIG does...

Some additional thoughts on the opener: (the last part especially)

http://www.investorsinsight.com/blo...rchive/2008/08/30/who-holds-the-old-maid.aspx

I think firms realize this, and that explains why B of A would take on Countrywide and Merrill despite the latter's toxicity. Firms are scrambling to pair up now - becoming "too big to fail" is their only hope of survival in this climate.

BTW - My wife works for Lehman (no one layed-off, yet, in Tokyo at least - hope she gets paid!)

He was with JPMorgan/Chase last I heard - I imagine that's just about as safe as you can be in finance - without a doubt too big to fail!

Rumor has it Barclay's is going to take over Lehman's Tokyo business.

New bailout plan for destressed debt on the horizon:

http://www.nytimes.com/2008/09/19/business/19fed.html?_r=1&hp&oref=slogin

The Fed was a step late in eliminating naked shorts. They should have done this after Bear and didn't go far enough because they should have also brought back the uptick rule.

As someone who was screwed by Putnam deciding to change the rules 24 hrs later I am a little weary we have turned the corner. However, it appears the market has calmed down a little although another MM Fund closed this morning.

The market is never as good as people think it is and conversely it is never as bad as people think it is. Greed and Fear - that is all it is.

I bought some OXPS on Tuesday. I'll probably be selling that today. I'm not convinced that we're out of the woods yet either. Should be a nice little gain though.

Update: Wow. I had a limit sell of $23.00 on that. Opened over $25. Much better than I had hoped for, and it came down almost immediately. Better to be lucky than good.

It looks to me like this rally seems to be limited to very specific sectors this morning. Outside of OXPS, my other stocks are up about .5%

I'm investing 1,100 a month. Is that too much to risk?. Or is that fair enough? I'm doing it with Transamerica.

As long as you are diversified you'll be ok.

Yeah, they are. They diversify the money in different investments in China, Europe (in euros), Brazil and of course in the USA.

Did anyone here have one or multiple accounts with either Bear Stearns or Lehman Brothers?

If so, how easy/hard was it to transfer your accounts? Could you transfer your accounts?

I did not have money with Lehman. So i did well. Juan Luis Guerra, I think Transamerica is a well established company. You should be ok.

How is the market now?

Horrible - the bozos in Congress are mucking everything up and using it for political gain.

Is my 401k save?

This is a boom and bust economy. Every so often there will be a depression like 9/11, Enron, and the current depression resulting from such things as public debt, the credit crisis, higher oil prices, etc.

However, there will also always be booms in the economy that tend to last a lot longer than busts such as PCs, cell phones, the internet, etc. The biggest financial boom the US has ever had resulted from victory in wwII when we controlled 90% of the world's industry. Inevitably, this depression will end with planned recovery followed by a boom. Since there is a depression, now is the time to invest before the next boom as long as you diversify. Just make sure you sell before the resulting bust.

I go along with the diversifying part. But still there are some gems around. Some banks seem a bargain. Also, private equity is very interesting I reckon. All mid- to long term though. I'm buying both because I think they will eventually perform despite another short term market slump.

http://www.timesonline.co.uk/tol/news/politics/article5114787.ece

As far as "solve", there will be a financial meeting in Washington this coming Saturday amongst the G-20.

This FT writer is not too hopeful. For one, Mr. Obama won't be anywhere in sight. http://www.ft.com/cms/s/0/0b3da1e6-af4b-11dd-a4bf-000077b07658.html

Correct, we haven't had real depressions for awhile, only recessions. Mostly, b/c the USA has stayed on top since wwII but the rest of the world is catching up for a multitude of reasons.

Are you clueless? Do you see what is happening in the rest of the world? One of the reasons I think the US will ultimately come out okay is our government will finally decide to let the markets take care of themselves. We do have transperancy. Look at Japan. They were mired in a 17 year recession. I dont think that will happen here. Furthermore, all these bailout plans are destined to fail. The markets will then adjust accordingly.