Looks Like Something Other than a Financial Crisis to Me

I wish that they would stop calling this a financial crisis.

I checked the stock prices of Goldman Sachs, Morgan Stanley, Bank of America, Citibank and JP Morgan. If I believe the media, then these things are toxic and they are the things that the government is refusing to bail out. Yet, every one of these company is trading 25 to 50% higher than they were some 2 weeks ago before the Paulson plan was introduced. Wouldn't the House's rejection take these companies down to their knees?

I thought that I would avoid the housing and credit issues in the US largely by investing in stocks like Apple, Google, Intel, EMC and the QQQQ. I even balance my portfolio out with some stocks like Teva, the generic drug manufacturer, and Northrop Grumman, the defense contractor. I am not aware of a single stock in my portfolio owning CDOs, mortgage-paper, etc., and they all have strong balance sheets. Yet, in the weeks leading to yesterday's collapse, these stocks were taken down sharply, and yesterday they were all sold like there is no tomorrow.

We've reached the point where this is no longer a financial collapse. In fact, the leading banks seem to be using this as an opportunity to make acquisitions, grow their deposit base and expand their branch networks (with the help of government). In yesterday's collapse, many of these stocks only gave back their gains from Friday. The Nasdaq wasn't up on Friday and was down 9% yesterday. Apple and Google sliced to new 52-week lows. Sandisk, which I also own, and which has a $26.5 a share cash bid under it from Samsung, also managed to fall $3 to 18.

If you didn't know that the housing and banking markets were bubbles, then you were probably in one yourself. But, the US economy is a tech-driven economy, and it is our positioning here that will make the US competitive in the future. It is the massive selling in these sectors that really concerns me.