If I had cash to burn, and I'm thinking about burning cash that I actually don't have to burn, then I would start buying stock right now.
It is absolutely astonishing to me right now that there are people sitting on their hands while millions of others are running around with their hair on fire. It seems to me that right about now, and especially today, well OK Monday, is about the best time in our lifetimes to buy stock in America's financial institutions. Warren Buffet put up 5 billion this past week into Goldman Sachs. I think he got a price of 125 a share. Why would anyone not go into the tank with Buffett?
I'm a little surprised that WaMu went under this week, but not surprised at all that JPMorgan Chase picked it up for under 2 billion. Now that I'm processing that thought, I'm saying to myself, holy smokes. WaMu has that much in real-estate alone. You could liquidate the whole thing over a period of a year and make a huge profit - just let the depositors freak out and go to Wells Fargo. Which they have by the way. The day that I saw WM at 2.10 I told my wife to move her money to WFC just to make herself comfortable. The stock popped up to 4.50 within a week and then dropped to 1.10 before the takeover. I heard this morning that 17B in deposits left the bank. Millions of folks dropped it like it was hot. And now Wells Fargo's stock is up 9% JUST TODAY.
Right about now there are good banks and bad banks. The good banks are going to make out like fat rats. I'm not a trader and I'm mad that I'm not in the market right now, but I tell you here and now, just like I told you about the flexibility in the demand for oil, when this stuff blows over, people are going to be biting mad for not buying right now.
BTW. I am in agreement with the most cynical folks. The taxpayers are the stupidest investors in all of this, and as disorganized and clueless as we are, we're going to get fleeced by the smarter, more cynical investors. If anybody here is trusting political representatives to save our asses, you deserve nothing but ridicule. The average American is going to get wholly hosed. Our money is cheap, and since there is basically no way for us to get it back (unless McCain or Obama does something incredibly unprecedented and dramatic), you may as well kiss it goodbye, which of course we wouldn't have to do IF WE WEREN'T SO STUPID WITH IT IN THE FIRST PLACE.
Unbundle your financial fortunes from the fools. And as Dennis Prager said so eloquently this morning, when it comes to compromising standards, soft compassion always ends up balanced by savage cruelty.
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