Big Dog's Boom Boom Room Message Board

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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: patron_anejo_por_favor who wrote (89126)	8/11/2007 7:56:27 PM
From: Broken_Clock	Read Replies (2) of 206242

Buy the energy dip.(jmho!) bigpicture.typepad.com Barron's Trader column observed: "The Market's worst fear is summed up by James Melcher, who runs Balestra Capital. "The equity market is just a sideshow to the main event, which is the bursting of the credit-market bubble," he says. A decade of muted borrowing costs and lax credit have created a vast pool of liquidity that has inflated home prices and reduced sensitivity to risk. Liquidity has flooded so much of the financial system that mopping up its excesses will take time, "and we're not there yet," Melcher says. Because money managers cannot accurately gauge the value of mortgage securities on their books, the losses suffered have yet to be fully quantified, and selling assets to meet redemption calls can play out for some time. That's one reason gold prices have slipped 3% even during the flight to safety over the past three weeks, and why energy bulls nonetheless are selling oil stocks -- because that's where they have profits."

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