Stupid Analysts! how can we sue?
Lulu is down 10% based on an analyst downgrade! In the worst bear market in 80 years, the stock drops $30 to $20 in 3months (not bad), and on the day the market capitulates, the stupid analyst comes out with a downgrade! What's the point!?!? Is someone paying this guy to observe this stock is down, along with every other stock in the universe? If you are brave, and still have some cash, this stock will pop 25% over the next few days as the market recovers.
I also want to highlight the role of the Ratings agencies in this mess. They use the i-banks stocks price as part of their credit scoring, so when the stock drops, they cut the rating, which in turn makes the cost of borrowing/capital higher for the distressed bank which in turn drops the stock. No wonder there was a run on Bear and Lehman, this was the easiest money for the short hedge funds!
Nevermind they were complicit in the initial AAA investment grade of subprime CDO's, by taking the fat payouts from the dealers across the street!
These Ratings agencies have to go!
posted by Junk Bonds @ 10/14/2008 12:17:00 PM
1 Comments:
I'm afraid the Paulson plan didn't include abolishing these ratings agencies! We'll have to wait for the next piece of legislation.
I would have expected more of a bounce from the financials when the Dow was up almost a thousand points! The big winner on that day was energy. I see that today financials are up when the general market in the US was down!
Nothing makes sense in this market anymore. You either have to give up for awhile or be very nimble with your day trading! I've decided that any stock previously trading above a few dollars and now is under $1 deserves a close look! It just can't possibly fall much further right? Anything higher than a dollar has the potential to go lower. Don't try this at home or with capital too dear to lose!
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