[dante]

So, since the market's down another 300+ pts, I figured that the Lehman thread was pretty much dead since there's now new companies that are floundering.

Now after the AIG buyout, and since WaMu is treading water, it looks like MS is the new target for short-sellers? They made a profit last qtr, they beat estimates, and they're getting hammered by 30% today. Not a pretty sight.

 

[Samirol]

Deregulation owns

 

[ohio]

On the MS short, I grabbed dinner with a buddy in hedge funds last night. He explained the the market is basically inverting as people try to unwind leveraged deals as creditors ask for their money back. This means:
1) people need to buy out their short positions - suddenly there is huge demand for companies that have been heavily shorted... bad companies
2) people need to liquidate their long positions to cover the shorts - suddenly there is a huge supply for companies that had promising forecasts and were heavily long.

It's the opposite of the way the market should function, so you'll see horrible companies going up temporarily and good companies dropping. If you can weather the storm, it will eventually correct as the deals are pieced back together with new leverage, but not everyone can weather the storm.