Sad Moment in the History of World Economy and Stock Markets

Dear Friends,

Please check out this interesting video on Yahoo Finance: -

http://cosmos.bcst.yahoo.com/up/player/popup/?rn=289004&cl=10101228&src=finance&ch=1732795

A New York Trader who has worked on Wall Street for close to 50 years sums up the turbulent financial situation as follows below. At a time when everyone seems to be reeling at the losses they incurred, few sympathize with the Wall Street people. The fact is; everyone suffers in a negative sum economy. Everyone; no one is spared .... from commoners to governments to financial institutions, to even Ivy Leaguers.

If you watch CNBC, even briefly, only for a few seconds, as my wife usually do, you would have noticed as she did, as to how bare the trading floors are today, compared to how they were, only a week ago. Many have either lost their entire fund stake, or have been retrenched by their firms who may have lost their entire business capital.

This is a sad moment in history. This has been the moment I have been warning friends about, because I care. I have taken the trouble to record this moment to ensure that if anyone of us, including me, ever get too big for our heads, we should read and re-live this moment.

Best wishes,

Ooi

© Copyright of Praesciens.blogspot.com, 2008


Here is a rough transcript of the comments made by the Wall Street Trader: -

"This is one of the most amazing times I have ever seen. Any CEO of a company who can spell the word "Finance" is being hit. The credit default swap ratings are exploding all over the place. There is a sense of general fear in the air.

It concerns not only who is going to be next, but who can I trust to trade with.

In past crisis, there would be a problem and it would drag on for a week, and then the government would be involved. This is a day by day, almost hour by hour, thing.

We've seen one or two institutions disappear in the past. We've never seen a series like this, where they disappear rapidly. And so, it's been very painful to watch this, and I look around at the empty spaces and empty phones. Conrades; this have been a great place. During the day, we've been competitive like anything. That's the way we played down here; hard, day after day. I feel badly for them and their families, and I miss many of them.

The key lesson to be taken from all this is that things should be watched far more carefully. Each of these firms that ran into trouble had leverage exceeding 35 to 1. That's unconscionable by the standards I grew up with; and if you have leverage like that, you'd better believe you are superman.

I don't know if it would mold the minimization or disappearance of Wall Street, in fact we may be mopping up into a whole new financial world. The world I knew is changing, and I doubt if it would come exactly back."