This afternoon I heard from a close friend who is quite knowledgeable of the markets. I highly respect his opinions and I will share one of his paragraphs to me.
"It has been a brutal market. The selling has been across the board. I guess the hedge funds sitting on sub prime mortgage based paper have been dumping and shorting everything in sight trying to raise cash to cover losses and margin calls. Of course others jump in and short everything. Just about everyone else sells out of fear. What a mess. I have no idea what is next, it depends on when these things are washed out. I think the economy will be okay, financial instruments will bear the pain. Batten down the hatches I guess."
I entirely concur with the above statement.
What cooks my goose is that I was once a bank examiner with the FDIC for a short period. Wow, I can remember going through mortgage files and standards "back in the day" were so strict.
What the sub prime lenders did was unconscionable. Regulators and governments were totally asleep to allow these mortgages to be made without complete loan documentation which offered evidence and assurance that loans could be paid. Just holding a mirror under someone's nose to see if they leave a film of exhale does not guarantee regular payment of loans. This situation is tragic.
Then to package the loans and sell them as securities to pension funds, college endowment funds, insurance companies and others, both in the United States and overseas, will have far reaching effects for years to come.
What is my assessment of Dejour in this atmosphere? Your guess is as good an mine. I sure didn't expect it to go down this far, but my friend's E-mail put things in its proper perspective.
As many of you know, this is my primary Peak Oil and Peak Gas energy play. I have added all the way down including today. I will cease buying, as my funds are depleted.
I will share one experience with you. Last October I bought a big chunk of this stock at $1.60. It collapsed just as I was going to visit my Mother for a week. I was then able to buy a smaller chunk at $1.23. When I left, I was down $18,000 and stranded without a computer for a week. When I returned, I was up $18,000. I can't guarantee that the same will happen within the next week, as this sub prime thing will go on for a long time, in my opinion. But I do think we are in the right investment as we near the entrance of a new era of energy, which will elevate Dejour's price and the entire energy sector.
As my friend said to me, "batten down the hatches." That's all we can do at this point. The financial markets, because of the failing sub prime mortgages, are now a festering disease and not even a bandaid will help. What a tragedy, what a disgusting tragedy!
I would feel totally helpless, but I think I have good insight about the energy future and it is very bright, indeed. That is all I can offer. Please read the introduction to my Peak Oil site and you will see why I have this feeling:
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