Nationalisation

Economic News:

The word of the day was apparently "nationalisation". At least according to Bloomberg and on wall street in general. The US government reiterated its stance that private ownership of banks is the way to go, but it has not yet come up with a plan that demonstrates this belief. Instead, uncertainty and lack of details continues. Moreover, Greenspan stated last week that temporary nationalisation may be the only way to overhaul the financial system and get the economic back on track for sustainable growth. And Paul Krugman today agreed with Greenspan's view, noting that major banks, mainly Citigroup and B of A, are effectively zombie banks and the US government has very little choice but to temporarily nationalize them.

Market Reaction:

Stocks continued their slide from the previous week as investors demonstrated their frustration and the lack of certainty surrounding the bank bailout plan and the possibility that equityholders would be wiped out in the event of a nationalisation of the banks.

I think it is safe to say that we are in the midst of a downward trend and there's not much that can be done to stop it, except for concrete signs that the economic decline is at least slowing its pace. And any such signs won't be coming until at least the middle of the second quarter of 2009, but most likely later.

Stocks:

My stocks followed suit with the overall market. GE hit a new 52-week low at below $9 and RIMM had some downward pressure too. But I'm at the point of no return. I'm not selling; I'm riding.