Hello Folks,
Today I had discussion with NYSE floor trader while having two cups of coffee (his one with milk and extra shot) and he came up with the phrase, which seems very interesting for me. He said that after government survived big names on wall street now there is strong belief that big companies like citi, BOA, GE, will never go bankrupt. Their shares may rally to historical highs or fall to lows but there always be magic man or group of magic men who will not admit total collapse. So the belief briefly is like "too big to fail" the term which was broadly used during crisis. After the fact that designers and policymakers of deregulated financial system are still in power in Obama's administration and the vast majority are former executives of big names like CITI for example. Also most of them admit and experts confirm that it was mistake that US let Lehmon to fail while it could intervene earlier and save like did in others' case. So now what I want to say if you want to buy shares of big companies your risk is equal to country risk. US will not admit bankruptcy of those companies. If US declares default that's different story which is unlikely to happen anytime in near future. Because of this I decided to invest part of my savings in "Too big to fail" companies' shares. No leverage trading. Just pour investment.
any comments welcomed
Today I had discussion with NYSE floor trader while having two cups of coffee (his one with milk and extra shot) and he came up with the phrase, which seems very interesting for me. He said that after government survived big names on wall street now there is strong belief that big companies like citi, BOA, GE, will never go bankrupt. Their shares may rally to historical highs or fall to lows but there always be magic man or group of magic men who will not admit total collapse. So the belief briefly is like "too big to fail" the term which was broadly used during crisis. After the fact that designers and policymakers of deregulated financial system are still in power in Obama's administration and the vast majority are former executives of big names like CITI for example. Also most of them admit and experts confirm that it was mistake that US let Lehmon to fail while it could intervene earlier and save like did in others' case. So now what I want to say if you want to buy shares of big companies your risk is equal to country risk. US will not admit bankruptcy of those companies. If US declares default that's different story which is unlikely to happen anytime in near future. Because of this I decided to invest part of my savings in "Too big to fail" companies' shares. No leverage trading. Just pour investment.
any comments welcomed
kiss the trend