by KYW's Salil Gutt
A major impediment in determining the true cost of the current financial crisis is the inability to get a true price for the esoteric investments manufactured by Wall Street. A house may fall in value but at 50 cents on the dollar there is always a buyer.
However, with some of the sexier financialinstruments there are no buyers at any price. Every few years there is a major market meltdown. Some times Main Street is responsible like the speculation in tech stocks or Wall Street as in the current mess from bad bets on mortgage related products. Investors always experience huge losses but history has shown that the tide will change. The worst thing one can do is bail at the bottom of the market.
There is a huge lesson here. Do not buy any investment you do not understand. I am always amazed that people will plunk down huge sums of money on an investment pitch over the phone from a stock broker without doing any homework.
The big profit on Wall Street comes from the sale of proprietary products manufactured by the firms and flogged endlessly by its huge sales force. Easy in, hard to get out.
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