Saturday, July 19, 2008

Wall Street psychology shifts

Anyone remember last Friday's headlines after the close on July 11? The world was supposed to be coming to an end:

NEW YORK (Reuters) - U.S. stocks tumbled on Friday as fears about the stability of the top two home financing providers, Fannie Mae and Freddie Mac, combined with oil at a record above $147 to cloud the economic outlook.

Fannie Mae closed at 13.40. A week ago Friday it hit a low of $6.68! Freddie Mac closed at 9.18. A week ago Friday it hit $3.89! Did that headline cost you money?

Oil closed at $129 a barrel. Last Friday it was at $147.

The bears, still haven't come to realize that Wall Street's perception is changing. It doesn't really matter if the banks don't show the losses that the bears want them to show. Meredith Whitney can get ticked off because Citigroup didn't take the writedowns she thought, or that Merrill Lynch just wouldn't blow things out at whatever bid was available and start over.

These bank stocks were already blown out.

It's easy to be a bear. The whole financial system seems to be caught rubber necking the next disaster. We just had Hurricane Katrina. So deal with it, and get on board.

Or let the headlines cost you money!