Panic Room

Interesante artículo de Hugh Hewitt.

[...] If everyone knows it is a "panic" and not a correction based upon looming recession, then the panic-driven selling must be close to an end as rational investors assess the basic facts that companies like IBM posted great numbers, companies like Apple keep unveiling amazing new products at very attractive prices and American innovation keeps throwing up new goods and services. The Washington Post can put out nonsense stories like "The End of American Capitalism," but even an enormous loss of wealth gained over five years is only that and not a repudiation of laws of supply and demand or the marvelous effects of liberty on markets, and of course the eventual and widely expected rebound will erase some of that loss. There's an enormous amount of cash on the sidelines waiting to enter at the perceived "bottom," and not eager to miss the expected dramatic move up, and that will be just the beginning of a recovery in share price for most of the companies that are still doing in October what they were doing in August. As Victor Davis Hanson noted this morning: "Sometime in the next few days, wiser investors should see that trillions of global dollars are now piling up and could begin to prime the economy — and that still valuable stocks, for a brief period, are up for sale at once-in-a-lifetime bargains."

These basic truths are hard to keep at the front of mind when expectations are shattered, but this is the fourth time I have watched this in 20 years --1987, the dot.com meltdown, after 9/11 and now this. Each time American capitalism came roaring back. There are lots of bank failures out there, but lots of banks are very, very strong as well. The Fed and the Treasury are flooding the zone with credit and will continue to do so. Inflation may be a problem down the road, but deflation doesn't look like a realistic possibility. [...]


Go forth and read the whole thing.