The usual jet lag is still my constant companion as I finally made it over to Europe, or more specifically Hamburg, Germany.
The picture is of the Port of Hamburg (800 years old), which is a seaport and deep water harbor off the North Sea, on the river Elbe in Hamburg, Germany.
It is named Germany’s “Gateway to the World” and is the largest port in Germany. In terms of numbers of containers handled in 2004, it is the second-largest in Europe and ninth-largest worldwide.
It should be no surprise, as I mentioned yesterday, that the challenging economic problems have not gone away and are still in place despite Monday’s huge relief rally. The bulls were disappointed about a lack of follow through to the upside on Tuesday and, despite wide swings, the major indexes closed down.
The government will now partner up with banks and will be spending as much as $250 billion to buy their shares. Of that, about $125 billion will be invested in nine companies, including Citigroup, Bank of America and Goldman Sachs. Officials will also offer guarantees on new bank debts and start purchasing commercial paper in two weeks.
Citigroup and JPMorgan will get $25 billion, Bank of America and Merrill will get $12.5 billion, Goldman and Morgan Stanley will get $10 billion, and Bank of New York and State Street will each get $3 billion, reports said. The banks are expected to get the funds before the end of the year.
Treasury secretary Paulson had to chime in with another classic quote: “These are healthy institutions, and they have taken this step for the good of the U.S. economy.”
Yeah, right; if they were healthy, we would not need this partnership, wouldn’t we?
Again, my view is that this volatile market may offer some opportunities to aggressive traders but not to conservative investors. With what we’ve seen, one move to the wrong side and big losses are a guarantee. If you’ve followed my sell recommendation, you should be safely on the sidelines, which is a great place to watch this circus from. The down trend is firmly established and is likely to continue despite bullish rebounds.
Given the events of the past few weeks, this quote about investing still applies as much as ever: “I’d rather be out wishing I was in, then being in wishing I was out.”