Meltdown!

Well there you have it....Citigroup closes and $4.71 down 26.41%today....its on fire..they need to suspend the shortselling and ramp it up with cash...the only good news is a Saudi Prince increased his stake in the company...and after that good news it fell like a rock.
I hope there is more than one exception! ...or else we are going to be in tremendous trouble.

Comparing these banks to their performance 80 years ago during the depression should not be consolation of any sort. Even "honourable" and "conservative" insititutions like AIG, Fannie Mae, Lehman Brothers, Wachovia and Bear Sterns survived the Great Depression, only to go bankrupt now. These institutions are structured completely different in the 21st century and this crisis is very different from the great depression.

Yes... BAC has been in good shape because of its conservative banking practices. It positioned itself with a low amount of collaterized debt obligations by limiting exposure to the housing sector and it has a tremendous amount of liquidity. But, it has been pounded this last month as well...it has lost 50% of its market cap in just the last month...right now its trading at a dispicable $11.25 (a 20 year low for this company). Maybe the Meryll Lynch (another bank that survived the great depression but not this collapse) takeover was a bad idea?

If citigroup goes under, nothing is "safe" anymore. If you were to take the entire worlds money supply and come up with a number that is how much capital flows into and out of citi in a period of 72hours. The amount transactions going through this bank are phenomenal. The loss of this type of institution will send the market into unchartered waters.

Look at Europe, conservative banks like Deutsche Bank, ING, RBS, Lyods groups, Barclays are in horrendous shape...much of them nationalized already...after shedding an excess of 50% of their market cap each.

the U.S banking sector will never look the same, whatever banks do survive will be shackled by regulators, they will rebound very slowly, and they might get mopped up by emerging eastern banks or the Canadians!
the parties over....lets wait and see who goes under first... the auto sector or citigroup.

slow recovery (provided we find a bottom in this market)

c h e e r s

 
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The situation with CitiBank is very worrisome. But the loss of value in BAC stock is a reflection of the market not the underlying value of BAC. In fact, BAC would be a bargain for anyone who is looking for a long term investment. Another bank/financial that is in relatively positive territory is Wells Fargo. So everything is not a disaster.

Even Warren Buffet has lost money. Everyone has lost money. But individuals who have cash and want to place some of it at risk can find bargains right now and can limit their risks. The guiding principle should be -- find value. Which means buy or hold stocks in companies with sound balance sheets, limited debt, positive mid- to long-term trend lines on sales, sales-volume, profits, and price/earnings ratios. Investments right now should be about long-term strategy so that investors can take advantage of market price averaging.

What would the Sikh perspective be on this?

Would is be something like this, people who were obsessed with Lobh, were so consumed with Krodh that even when they had lots they still wanted even more Moh, and when times stated to get bad they were still in denial because of their Hankaar?

Randip ji

The amount of money personally acquired by the people at the top of these corporations was obscene. Based on selling illusion to anyone who was too lazy to do their homework and to investment counselors who were to proud to admit they did not understand "financial derivatives." The people at the top are walking away with millions, mansions, and their wives are complaining because they can't afford the social risks of plastic surgery and expensive nannies for their children until the dust settles and no one is paying attention, once again. Everyone else who tried to do the prudent thing and put what they could away for retirement (so as not to be a burden on their children and the government in old age) are looking at 30 to 50 percent losses in retirement plans -- all that they could manage to save. And there is no where to invest if you have anything left to invest. Bonds, mutual funds, insurance -- all tanked.
Reference:: Sikh Philosophy Network http://www.sikhphilosophy.net/business-and-lifestyle/23091-meltdown.html

And the American financial markets brought the rest of the world down with them. We are not talking about a class of people who are capable of moral reflection. What would Sikhi say about this? Bhagat Trilochan Could be he had it right?