<p>Morgan Stanley, Goldman May Gain Investment From U.S. Treasury </p>
<p>"Morgan Stanley and Goldman Sachs Group Inc., the biggest independent U.S. investment banks, may reap cash infusions as part of Treasury Secretary Henry Paulson’s plan to buy stakes in financial institutions, investors said. </p>
<p>Paulson, in a statement yesterday, said the U.S. will purchase equity in a <code>broad array’’ of banks and other financial firms to restore market stability and ensure economic growth. The Treasury is working on a</code>standardized program that is open to a broad array of financial institutions,‘’ he said. </p>
<p>Morgan Stanley Chief Executive Officer John Mack, 63, and Goldman Sachs CEO Lloyd Blankfein, 54, failed to regain investor confidence by converting their firms into bank holding companies last month and raising new capital from private investors. Morgan Stanley’s stock dropped almost 60 percent this week, while Goldman’s fell 29 percent. </p>
<p><code>Based on the fact that they’re allegedly commercial banks now and are moving that way, I think they’re likely to get protection,‘’ said Benjamin Wallace, an analyst at Grimes & Co. at Westborough, Massachusetts, which manages about $700 million.</code>Whatever solution they come up with for the banking industry as a whole will apply to them, because they’re no longer special.‘’</p>
<p>Rumor Major Player Soon to Dump Stock … rumor? started where? here ? </p>
<p>What an irresponsible (and ridiculous) thread title.
Some of the largest mutual funds are index funds. What do you think they do when small investors get out in a panic? An index fund must sell stock. They can’t make a judgment call that stocks are too cheap and it is better to buy. If they have redemptions, they must sell. So many major players have been dumping stock in the past few weeks. Gee, why do you think the market is down? Mutual funds forced to sell from redemptions. Any type of leveraged player has been forced to sell due to margin calls. </p>
<p>If my stocks go to zero, then so be it. In 2001 I had $50,000 invested in two mutual funds - $25k each in Janus 20 and VIGRX, a Vanguard index fund. My investment grew to about $75,000 before the market tanked… and went down and went down. I remember thinking that I couldn’t just sit around and watch my investments go to zero, so I sold out… for $20,000 total, taking a 60% loss, $30,000 loss on my original $50,000 invested. So this time I will ride it to zero.</p>
<p>One of the problems that came out last night is that there was a determination on the value of Lehman CDS that sellers have to pay. It came out around $0.92*** per dollar and that works out to something like $270 billion. So banks have had to sell assets in the past few weeks to pay for the insurance that they wrote.</p>
<p>I had a look at the $SPX chart and an argument can be made for a bottom. At least a short-term bottom. A long-legged doji (a morning star would have been better), and huge, huge volume, indicating capitulation. Valuations are attractive in many stocks.</p>
<p>Is the dumping over? Only those needing to dump know that. Is sideline money moving in going to be greater than the dumping. Noone knows. I’m in cash waiting for an entry. There are lots of others in the same position.</p>
<p>A good year to take some losses on your tax return- sell for a loss, take the loss, buy back in in something different enough not to invoke needing to wait 30 days. Get your tax loss, improve finaid? and buy back in at the bottom</p>