Chapter 21. Do Investors Dare Return to the Market?


“There is no equity in the equities markets.”

 --Michael G. Oxley, Republican, Ohio, House Committee on Financial Services, October 2, 2002

A Bear Market, Yes, But Not Only a Bear Market

What will restore investors’ confidence in our financial system? Some observers believe that we have merely entered a bear market, akin to many we’ve had in the past, and that as share prices fall and the economy strengthens, stocks will begin to look cheap, people will reenter the market to buy, and the bear will again give way, in the time-tested manner, to the bull.

But things are different today. The equity market collapse this time did not originate in a business downturn, but in the sudden recognition by ...

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