So whoever the people are that you are talking about, that have “so much cash”, there are an equal an opposite group who have gone all in and no longer have cash to invest. So this is not a reason why stocks should go up.
Dave

Seems to me that the systemic problems of global debt (and US total debt in particular) have GOT to be resolved in some manner or other before we can have any kind of a sunny future. Increasingly, it’s looking like our failure to allow large institutions to die (instead absorbing them into other large institutions and making even BIGGER problems) are putting the nation at risk.

I expect to see other nations besides Iceland hit the skids in the months to come. Credibility seems to be waning in the ability of nations to cover their institutions debt exposure.

In the face of that kind of risk, any “bottom” is likely to be transitory, lasting only a short while before taking the express elevator down once more.

I have been 100% cash for over 2 years, as you have been noting from my posts. I bought a little of this a few weeks ago when Karen and I were discussing the Baltic Dry Index and how severely it had dried up..as you know. We were discussing dividend stocks, and also how Jim Cramer had mentioned PRGN in June, followed by a 2/3 decline, another good call, Jimbo…

One of PRGN’s competitors announced a few days ago, and I took a chance knowing this and had a wonderful day…owned Prgn for 5 hours and made 23%…I bought it today, not to sell or trade, but to hold through this downturn, thinking that in a few years this could treble, maybe…it has a wonderful dividend history..

Not a lot, but I will hold it…virtually all my holdings here are cash, and this will just be my “toes”…as Barry says…and I assure you, I will not place any major wagers on any stocks until I am sure the bear market, and severe recession is over….

Just think of it as a “Christmas Club”…if it goes to zero, no harm to me….if it turns into a five bagger, still won’t affect my retirement, with the amount I bought today….

Bruce in Tennessee

I looked at PRGN, it’s a Greek shipping company, with about $600M in property plant & equipment assets (presumably floating), and $300M in debt. It has a nice dividend history, but does not appear to be a bank with limitless central bank support (unless Bernanke is shoveling money to them too). OTOH, gross profit is VERY nice — if it can be sustained.

International trade appears to be in “shrinking-to-nothing” mode, with some risk of trade barriers being raised in an ill-advised “protect the home markets” gambit. If the planet does slide into a 3-7 year-long depression, their profits would seem to be at risk fer sure.

In short, this looks utterly poisonous to me, but y’all all clearly not stoopid, so I must be. Is a quick 10% return the enticement here? And that can’t be the case, as the stock will drop by the amount of the dividend tomorrow. So I have to assume that this is a contrarian buy, on the assumption that the global economy will lurch out of the pickle it’s in within months rather than years. Is that the rationale?

Please enlighten me — I have no interest whatsoever in the transaction (out of my area of expertise — obviously), just want to understand the rationale behind it. I figure that once I stop learning, they can turn off the support machinery, I’m dead. (although of late, learning has become increasingly painful)

Two quotes that are quite revealing: GS at 62, and BAC at 15. My, oh my. I wonder if BofA has any regrets swallowing Merrill and Countrywide?

~~~

BR: Nice call

U.S. Stocks Surge, Gain 11% from the lows
http://www.bloomberg.com/apps/news?pid=20601087&sid=abYNY5WnERMo&