The Dow is off its lows for the day, and we are awaiting the results of the Lehman CDS auction. The market is looking hopeful, but it could intervention that we keep seeing. Look at the open of today and then the sharp rebound. As an investor would you actually purchase a long position at the moment? Depending on the results from the auction we may have a serious bounce, free fall, or complacency. I really don’t know… If I did I’d choose the respective position and make a killing.
The auction is going to provide some clarity to banks as to the true value at present of all this “worthless” paper they are holding. One good thing regardless of the market’s reaction is that now people will have an idea as to their worth. Up until today there has been no market and pure speculation as to what they are valued. I’m not going to partake in a transaction if what I’m buying has no market and no exchangeable value.
Thus we are awaiting the results of the Lehman auction. See it here.
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