What a ride! At one point this afternoon, the Dow was down almost a thousand points. The plunge was sudden, dramatic and scary. Such a price plunge could not be attributed to the fear of Greek contagion, nor the uncertainty of the national election in England and a regional election in Germany this Sunday. At this point, it looks like a trading error of massive proportions, attributable to the entirely computerized trading system we have today. We recovered from a loss of 998 to a “mere” loss of 347 within two hours.
I have cautioned many times this year that we are subject to a heart attack, which would come thru the financial system. Today, it happened and financial stocks got killed. Now, you know why I have not bought hardly any financial stocks this year, despite their nice earlier run-up.
Despite surviving today’s heart attack, we may yet have another. If Trichet of the ECB does not indicate quantitative easing soon, there could easily be another. We’ve long sold our bank stocks, and I’m still not buying any more any time soon.
