Beware the Bear Market Ebb Tide

Investors would be wise to beware the Bear Market ebb tide that is currently just getting underway.

The old Wall Street saying that a rising tide lifts all boats is even more true in reverse. Once the tide starts flowing out it becomes a dangerous self reinforcing force.

Those investors who still think that the government and Federal Reserve Bank will still somehow save the economy from a severe recession are just not aware as to how severe and dangerous the challenges overhanging this market are. They also underestimate the speed at which unpleasant events unfold to the downside. Many years of price appreciation can be wiped out within just a few months.

What Crisis After Bear Stearns?

What Crisis After Bear Stearns?

After 85 years of being one of the leading financial institutions on Wall Street the Bear is dead.

Well, perhaps not completely, not yet. But to the employees of Bear Sterns who watched in horror as the stock fell from a high of over $160 a share last year to all of a $2 a share buyout price by JP Morgan death must seem like a reality.

The big question is what now and who may be next?

There are those who believe that the failure of a major firm like Bear Stearns may signal the low point of this down cycle. Others believe that with the huge uncertainly of toxic debt instruments in the trillions of dollars over hanging the market that the worse by far is yet to come.