Nationalization?

I saw an interesting interview with Henry Blodget the other day. He was talking about capitalism and letting the markets fall apart with the laissez faire approach, and how the government should not intervene.

It is financial survival of the fittest at its best.

I agree to a certain point. However, with that, we see massive fear, volatility and complete turbulence. And that is not just with the stock market. That's with society itself.

When companies fall, even the small ones, it not only casts people into unemployment, but it causes a shock to their phyche. Spending stops, which hurts people who have been doing business with them, and the cycle continues.

It also causes a cloud of negativity that permeates, even after the financial conditions improve. That, I feel, is the major force holding back our economy. Way back when, a year or so ago, the market was clearly in trouble, and the media was communicating consistently that all was well, and we were not even in a recession. Once it was clear that we were definitely in trouble, the tone went from rosy to rubble. All of a sudden, the entire markets were doomed, and the US would never be the same. Ever since, we have been bombarded with bad news.

I feel the bottom is setting in when the bandwagon goes 100% negative. Once the pundits see a risk in being positive, and no risk in being negative, then I am hopeful that the worst is done. The cycle that seemingly plays out over and over is one of the "safe call".

Right now, people look at BAC and XLF and say that it will never be good again, and we are going to nationalize the universe, and that capitalism is dead - and no real market voices to refute this - it tells me that many people have turned sour on things and already sold their positions.

This means to me that it's a good time to get in.

While I don't think that we are out of the woods yet, I do believe that we have seen the worst of it. Once the feeling of fear turns to greed we should see things turn around.

Good luck all,