There is too much PAIN and PANIC on wall street this week. No surprise with a mammoth failure of LEHMAN BROTHERS and AIG in an emergency vehicle heading for a lifeline- will it get it? To my mind `they' whoever they may be- FED, PRIVATE wealth owners, Sovereign FUNDs, have to, have to HELP a solvent company to remain solvent- ! The rating agencies have to, have to, have to give AIG time to sell its assets ($trillion... worth) there always is a buyer eventually- and to raise money.
The only trade I can think of is AIG at $1.5 trading at bankrupt levels- because you got to have some conviction and confidence that SANITY will prevail. The reverberations of an AIG bankruptcy all over the globe will be DEVASTATING. Mona awaits an AIG survival and the consequent reversal in the markets moves. We also await FED meeting today- and a half basis point cut ... to calm the fear and panic if not anything else.
If the crash has come in so hard- 500 pts in the DOW last afternoon and VIX shooting upto 34-35... highest level in years... we could call it CAPITULATION and one of these days STAMPEDE buying should ensue.
IF there is money on the sidelines its the smartest money and should be put to work NOW ... !
DRYS at 47, EXM at 20.5,... are trading at forward p-e of 3 or 4 I believe- assuming that global trade will STOP. Once China settles down- and starts moving goods again.... shipping rates (baltic) will pick up- and these stocks will SOAR. I also like commodities- they are failing alongwith the huge unwinding in hedge fund p'folios, I guess. FCX at 60 is VALUE, some others could be RIO at 20.5, and ALCOA. FWLT at 36 and WFR at 30 are beaten down but will reward once the market starts moving up ... when it does. COAL and Natural gas stocks are mutilated- ha, havent seen so much opportunity ... wish I had more money to put to work. DO YOU?
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