Market Panic Advice

                     

A market panic?  Some history:

U. S. financial breakdowns usually have to do with governmental “experts” in the past, reacting to problems in a panic mode. I’m referring to the Great Depression and our 2008-2009 “Great Recession.”

                       

The 2008-2009 rescuers had come from the financial community, attuned only to the short term, and thus could not see how caution and avoiding panic would overcome problems. Nor did they truly envision the danger of acting in haste.

                       

Example: The value of collateralized debt obligations, CDOs. or their derivatives, were “marked-to-market,” under so-called fair value accounting rules.

                       

But such rules could have and should have been

suspended for the emergency. CDOs were not some other product that accountants usually measure on balance sheets.

                       

As a result, bank and investment company net worth figures were daily being devalued to so-called “toxic” levels. Those levels were actually a fiction, brought on by an illiquid market, where true fair value was impossible to determine. The rescuers were blinded by their own personal and business backgrounds. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)