Thursday, October 16, 2008

This morning, I have been reading "Slope of Hope" again, and Tim Knight's prediction is that the market might begin to turn around the week of Oct 20 when it could also reach new lows. Yikes!

This morning, I also watched CNBC's excellent all-star panel for the most part of an hour 8-9 a.m. with Paul McCulley - Pimco, Abby Joseph Cohen - Goldman Sachs, Jack Bogle - Vanguard, Bob Doll - BlackRock. Fortunately, it is reprinted and video-ed at CNBC.com.

http://www.cnbc.com/id/27214096

Here are my favorite excerpts of their most memorable lines:

Paul McCulley, Pimco Managing Director

"I do think that we have, in place, the right set, finally, of government policies to counter this paradox of deleveraging," McCulley said.

"The reasons for optimism, if you want to be optimistic, and I do, is that you've seen the right kind of (government) response," he said. "They are going to stand up to the challenge in a very forceful way."

Abbey Joseph Cohen, President of Global Markets Institute at Goldman Sachs

The U.S. economy should start to see growth in mid-2009 and it will start to show signs of improvement in early spring next year, Cohen said.

If the global policy actions "are effective, we'll start to see the system unfreezing," she said.

Jack Bogle, Vanguard Group Founder

"This is my tenth bear market and what's different about this one is that the problems of the financial markets are spreading over to the real economy," Bogle said.

"Stay the course".

Bob Doll, BlackRock Chief Investment Officer

The government actions have gone a long way to helping the financial situation and the governments need to follow through so the markets can move on to the "normal" issues of recession, Doll said.

"I'd say things are improving," Doll added. "Forced selling will continue but probably at a lesser pace…volatility will remain but probably in two years from now we'll look back and say why didn't I buy more stocks in October 2008?"

As expected, they are saying to begin to buy again, even though this and the next few quarters don't look "pretty".

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