Bear Stearns
Thus far the global sell-off has not continued in the US. In my opinion the market is in complete denial. This is a big deal people. Bear was fine early in the week and then bam. I can appreciate this being an isolated event, but there are troubling aspects of this deal that should transfer to the rest of the market. Mainly, PE ratios are still too high given the risk in the market. Also, once the calm sets in, interest rates must go higher. That means those using the fed discount model to value the market are using a rate that is way too low. In my opinion the market is over-valued by 10-20%. We either see that correction in a panic or we see it over time.
Tell me your thoughts.
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