The S&P500 has wiped out almost every financial firm that had leverage of greater than 10:1. Leverage in this case is the measurement of ROE/ROA. We don't have to delve deeply into financial statements to get these numbers, but it is fascinating that all of the firms in the S&P500 that were above that level are gone or merged or backed/bought by the US Gov't. SO, I COULD CONCLUDE that the leverage "in the system" has already been taken care of to a large extent.
The S&P500 is up 2% overnight here to get started for the week to confirm the "bull market".
Get ready for a busy day & week.
9:52PM Sunday Nov 9, 2008
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