I'm rather dumbfounded by the weakness in this - the selling is constant even at these levels!! After falling from 43 to 31, its copped another 16% fall today. Looking back at the volumes and from where this came from, surely not too many would have been in at much cheaper levels to warrant this kind of selling?
Subprime makes up 3% of the US and despite some 'repricing of credit risk' surely all this selling has been more than factored in and now appears way overdone - with xao having now fallen 8% and various other stocks up to 30, 40 and 50%. Bernanke recently came out and said that the impact of subprime lending on the credit markets was "not significant". Will it have an impact - yes of course but then so will rising banana prices! But seeing such large falls appears to defy logic and explanation. And of course, all the doom-sayers will come out AFTER the event.
We've seen it all before...earlier, there was a period of talk of gloom and doom due to high inflation, rising oil prices, falling commodity prices..and a perception of a slowing economy...what happened..market went higher! Then there was the one day shock and awe from China...what happened...market went higher! Likewise, the same will happen...but right now, perhaps better that i just turn away from the sheep!
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I'm rather dumbfounded by the weakness in this - the selling is...
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