Comments on: Yet Another Low for the Dow – 4 Things to Do Now http://www.etftrends.com/2009/03/yet-another-low-for-the-dow-4-things-to-do-now.html Keeping a grip on exchange traded funds (ETFs) Fri, 19 Mar 2010 22:07:26 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: MSK http://www.etftrends.com/2009/03/yet-another-low-for-the-dow-4-things-to-do-now.html/comment-page-1#comment-3565 MSK Mon, 09 Mar 2009 16:12:30 +0000 http://www.etftrends.com/?p=8218#comment-3565 Fundamentals first. Attaching yourself to a technical trend "months or years later" may be "safer," but it will most likely come at the expense of return. I suppose that makes sense since lower risk should have less reward. But, it's something to be aware of. As for the market losing faith in certain things, I will only say that this market has been declining for quite some time, notwithstanding the pontificators that like to lazily link cause with effect. Politicians only wish they had as much influence on markets as some would attribute to them. That said, the market is being driven by the same greedy people who were incapable of factoring risk into their grandiose schemes. Now that those schemes have blown up in their face, they don't want to take any of the loss. Like cry-babbies and whiners, they are sitting on the sidelines waiting for Uncle Sam to eat the loss. It shouldn't be done. While there is no good solution to the mess, taxpayers eating the loss will not be without consequences down the road. It will establish yet another moral hazard that will only encourage even more brazen risk-taking. It's time Wall Street re-learn the lessons of risk and return. Fundamentals first. Attaching yourself to a technical trend “months or years later” may be “safer,” but it will most likely come at the expense of return. I suppose that makes sense since lower risk should have less reward. But, it’s something to be aware of.

As for the market losing faith in certain things, I will only say that this market has been declining for quite some time, notwithstanding the pontificators that like to lazily link cause with effect. Politicians only wish they had as much influence on markets as some would attribute to them.

That said, the market is being driven by the same greedy people who were incapable of factoring risk into their grandiose schemes. Now that those schemes have blown up in their face, they don’t want to take any of the loss. Like cry-babbies and whiners, they are sitting on the sidelines waiting for Uncle Sam to eat the loss.

It shouldn’t be done. While there is no good solution to the mess, taxpayers eating the loss will not be without consequences down the road. It will establish yet another moral hazard that will only encourage even more brazen risk-taking. It’s time Wall Street re-learn the lessons of risk and return.

]]> By: Frank Lynch http://www.etftrends.com/2009/03/yet-another-low-for-the-dow-4-things-to-do-now.html/comment-page-1#comment-3516 Frank Lynch Thu, 05 Mar 2009 23:13:04 +0000 http://www.etftrends.com/?p=8218#comment-3516 These markets continue to fall because there is no longer any faith that this administration will do what is needed to deal with the problem. Certainly they know how bad it is. If they won't tell us, it has to be enormous. There is real anger that the big, insolvent banks are being kept on life support when they should be put down. Their political connections are paying off and they are being rewarded for destroying the economy. The administration is destroying wealth instead of debt. Reducing mortage interest payments is useless. The debt still remains. Many (most) payers will go back into default. If house prices have declined 30% then reduce the principal by 30%. There would be squeals, but so what. Congress could just do it if wanted to. No need to deal with it on a case by case basis in the courts. There is no obligation to keep paying on a mortgage that is underwater. Businesses do similar things all the time. The loan is secured by the house. If the bank didn't care about valuations and qualifications, they can deal with the result. Obama's main support is the super rich, who can survive any depression, the idealists, and the 40% who don't pay taxes. They will be taken care of. I don't believe he cares at all about the markets, the savers, or the retirees whose life savings have been devastated. These markets continue to fall because there is no longer any faith that this administration will do what is needed to deal with the problem. Certainly they know how bad it is. If they won’t tell us, it has to be enormous. There is real anger that the big, insolvent banks are being kept on life support when they should be put down. Their political connections are paying off and they are being rewarded for destroying the economy.

The administration is destroying wealth instead of debt. Reducing mortage interest payments is useless. The debt still remains. Many (most) payers will go back into default. If house prices have declined 30% then reduce the principal by 30%. There would be squeals, but so what. Congress could just do it if wanted to. No need to deal with it on a case by case basis in the courts.

There is no obligation to keep paying on a mortgage that is underwater. Businesses do similar things all the time. The loan is secured by the house. If the bank didn’t care about valuations and qualifications, they can deal with the result.

Obama’s main support is the super rich, who can survive any depression, the idealists, and the 40% who don’t pay taxes. They will be taken care of. I don’t believe he cares at all about the markets, the savers, or the retirees whose life savings have been devastated.

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