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Microcap & Penny Stocks : Trading post-bankruptcy bounces

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To: LLCoolG who wrote (65)6/4/2009 3:43:40 AM
From: RockyBalboa1 Recommendation  Read Replies (1) of 93
 
That what I was thinking; if something is expected to happen and priced in, the markets shall not move;

Example: GM filed Ch.11 and the market actually went up as if nothing happened.

By the way: the CDS settlements for FNM and FRE were the lowest on record - with reference bonds valued at 95 to 99.5%; so the payout was minimal in FRE, FNM.

Lehman was on the other side of the spectrum with reference bonds valued at 8%:

Why I think such a crash is not possible right now:

The october incidents occurred because of the perceived consequences of Libor at +400 over fed funds etc (which again was a the result of the failure of money markets, which again was the result of general distrust).

But when is such a crash possible again:

Similar to 2008 when commodities went bananas - the fed , and other CBs will have to drain money, big time to stop a liquidity bubble from growing too big; and to break momentum this drain must be severe and fast.
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