Confidence Is Key
Source: http://feeds.feedburner.com/~r/ContrarianProfits/~3/402834672/5708Posted on Thursday, September 25th, 2008 | In Market Commentary
Oxford Club investment director Alexander Green says government intervention to shore up money markets should ensure your cash is safe… for now. But this doesn’t mean the financial crisis is over. Confidence has been severely damaged, and the healing process is only just beginning…
This from Investment U
Yes, the U.S. government is protecting the money in your money market account – for now. And the FDIC and SIPC are protecting your other cash.
But for a few days last week, the financial markets were coming apart at the seams. The Federal government rushed out a bailout plan (details pending) and suddenly the stock market shouted Hallelujah!
But don’t uncork the good champagne just yet. I believe the worst is behind us for now. But this financial crisis isn’t over.
Confidence has been badly scarred. Investors have gazed over the edge of the precipice and gotten a serious reality check. Many more families are now thinking in terms of return of capital rather than just return on capital.
The financial markets will rise again. At some point they will rise dramatically, as they always do after a crisis. But first there has to be a healing process.
As James Madison said a couple hundred years ago, “The circulation of confidence is better than the circulation of money.”
And in today’s complex, interrelated financial markets, you simply won’t have the latter without the former.
Source: Money Markets: How Safe Is Your Cash?
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Alexander Green, contrarian profits, Fdic, Federal Government, James Madison, Market Commentary, Oxford Club, SIPC, United States, Us Government
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