So, after the last two day's love fest and AIG's near-insolvency, how much do you want to bet that mom and pop retiree are going to jump on the computer or call up their fund company, take a look at how their retirement accounts (mostly invested in equities, thanks) have taken a pounding, and go "oh my god, I won't be able to retire." Mom and pop will say: "Tell my broker - Move it all into bonds, treasuries, and cash. Get me out of these risky equities." And mutual funds, unlike CEF's, have to sell for NAV redemptions. We ain't even close to a puke point here. Those sorts of moves come late and take time. And every guy who says, "Well, I'm investing for the long term...." has his puke point too. Spiral. Very bad. Disclosure: Long SPY puts, SDS, ADX, PRPFX and multiple long US & international equity positions.
And many of these people have been very patient for years..... Many years of almost nothing.....and then faced with a severe loss ? The message is quite clear..... Good post.... ................................................ But... Greed will be back !!! And so will Fear be again !!!! ................................................ Real capitulation....is when the real patient people have had it.......and toss in the towel..... ......................................... But capitalism works.... Just look at what Barclay's pulled off....