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Mullooly Asset Management

Mullooly Asset Management

Fiduciary Fee-Only Financial Planner | Investment Advisor in Wall, NJ

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How Wall Street Brokers Effect the Stock Market

September 16, 2007 by Thomas Mullooly

The big reason why the stock market fell apart this summer was because the financial stocks — the brokerage firms in particular — really struggled. We’re just learning these firms held a LOT of mortgage loans in their portfolio.

And there’s really no accurate way to value these assets. There have been reports where these mortgage loans are being marked down in value from 20% to 50%. There are few buyers for these types of investments, so there really is no support line, or “bottom,” for the price of these assets.

They’re all simply guessing what these assets are truly worth.

This coming week, we’ll get third-quarter earnings from Goldman Sachs, Morgan Stanley, Lehman Brothers and Bear Stearns. Later on, we’ll get earnings from Merrill Lynch. Every single one of these firms has significant exposure to the mortgage market. So we’ll finally learn how much exposure each of these firms has to these near-worthless assets.

It could be huge.

We continue to see improvement in the overall market. But keep in mind that the big cog in the wheel, the financial sector, may upset the markets this week. Additionally, we have a Federal Reserve meeting on Tuesday. And if The Fed doesn’t say exactly what the markets expect, there could be additional turmoil.

If you have any questions whatsoever please do not hesitate to call the office at 732-223-9000. Please understand, I’m becoming more optimistic on the markets, but I prefer to take a slow approach and see how things unfold.

Tom

Thomas Mullooly
Mullooly Asset Management LLC
Our Only Business Is Fee-Only Investment Advice
www.mullooly.net
support@mullooly.net

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Filed Under: Asset Management

About Thomas Mullooly

Thomas Mullooly is owner and founder of Mullooly Asset Management, Inc. In 2002 Tom opened Mullooly Asset Management, a fee-only investment advisory firm. As an investment advisor, and not a broker, Tom works strictly for his clients. With the help of point and figure charting, Tom builds a realistic game plan for clients.

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2052 NJ-35, Suite #203
Wall Township, NJ 07719
Phone: (732) 223-9000
Fax: (732) 223-9600
Email: support@mullooly.net

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