Gold at $1000 soon? Morgan Stanley Troubles MS, CitiBank C, Washington Mutual WM

Another day, another injection of capital. Seems like the public is waking up to the solid gold hedge against massive inflation in the years to come...

Gold's up a convincing $85 yesterday and continues at $29/ounce so far. 

Back at $890, those who sold to the low flocking away from what is the true value while this unbelievable financial crisis unfolds further must be kicking themselves. 

Words from the wise, trust the fundamentals of the stock market and not the daily fluctuations. Mr. Warren Buffet and his famous mentor Benjamin Graham (the Value Investor from Columbia University):

"To understand the irrationality of stock prices, imagine that you and Mr Market are partners in a private business. Each day without fail, Mr Market quotes a price at which he is willing to either buy your interest or sell you his. The business that you both own is fortunate to have stable economic characteristics, but Mr Market's quotes are anything but. For you see, Mr Market is emotionally unstable. Some days, Mr Market is cheerful and can only see brighter days ahead. On these days, he quotes a very high price for shares in your business. At other times, Mr Market is discouraged and seeing nothing but trouble ahead, and quotes a very low price for your shares in the business."

"Mr. Market has another endearing characteristic, said Graham. He does not mind being snubbed. If Mr Market's quotes are ignored, he will be back again tomorrow with a new quote. Graham warned his students that it is Mr Market's pocketbook, not his wisdom that is useful. If Mr Market shows up in a foolish mood, you are free to ignore him or take advantage of him, but it will be disastrous if you fall under his influence."

Believe in the fundamentals - inflation and USD$ is set to fall. Trends are pointing back to the commodities once again as banks no longer believe what others have on their balance sheet.  

At the time of writing, another Wall Street landscape firm Morgan Stanley appears to be the next big meltdown target. Keep in mind this was a firm that had $779 billion under their asset management just a short 8 months ago.

Listed as the second largest investment dealer in New York Stock Exchange, this news no doubt created more

panic amongst traders. Let's hope MS doesn't make the mistake of turning down offers when/if they are down on their last straw - and end up not being bailed out like Lehman Brothers (when turning down Korean buyers) 

Lehman Brothers' shares rallied Tuesday as the firm's on-again, off-again discussions with the state-owned Korea Development Bank (KDB) switched back to the "on" position.

At issue is both the terms of the deal -- Britain's Sunday Telegraph says $6 billion for a 25% stake in Lehman -- and what other firms are involved. KDB officials want to "form a consortium with private banks as [they] believe it is more desirable to acquire Lehman Brothers jointly rather than alone,'' The New York Times reports.

Also at issue is whether Lehman's embattled CEO Richard Fuld can afford to play hardball over the price -- as is also being reported -- and whether he can survive at Lehman's helm regardless.

Morgan Stanley's perilous news below... what do you think? Another LEH or bailout target? Are they so big that a complete wipeout will shatter more investor's confidences.

Sept. 18 (Bloomberg) -- Morgan Stanley, the second-biggest independent U.S. securities firm, may sell a larger stake to China Investment Corp. and is in talks about a possible merger with Wachovia Corp., a person familiar with the matter said.

China's state-controlled fund may buy as much as 49 percent of the New York-based investment bank, said the person, who declined to be identified because the talks aren't public and may end in no agreement. Morgan Stanley resumed its decline on the New York Stock Exchange, falling as much as 22 percent.

Morgan Stanley, led by Chief Executive Officer John Mack, and Goldman Sachs Group Inc., the biggest U.S. securities firm, tumbled the most ever yesterday as the deepening credit crunch fueled concern their funding sources are drying up. Morgan Stanley shares plunged 42 percent this week through yesterday after Lehman Brothers Holdings Inc. filed for bankruptcy and Merrill Lynch & Co. sold itself to Bank of America Corp.

``Morgan Stanley must be talking to any suitor,'' said Roger Lister, a credit analyst at the DBRS Inc. rating firm in New York. ``But I'm not sure whether a merger with a bank will solve the problems. It's not a deposit-base issue but a crisis of confidence. And getting a capital infusion from the Chinese or somebody else brings huge dilution due to the depressed stock price, which scares investors even more.''

Morgan Stanley fell $4.32, or 20 percent, to $17.43 in New York Stock Exchange composite trading 

If you're unsure, you're not the only one. Silver and gold bullions are up for a reason, retails and institutions alike are flocking back to commodities - perhaps we'll see $900/gold by day's end. By 1980's adjusted inflation figures, $900 gold is still cheap, remember!

With another $150 billion of injections (additional)announced today by USA, gold and gold juniors's time in the spotlight once again is coming sooner than you think. Better get in before this run takes off again like the gold run earlier 2008 to $1000!

People flocked to gold back then thinking things were bad... well subprime may just be the first step. Credit Swaps, defaulting bonds at the municipal level... what do you do when your supposedly safe GIC and Money Market isn't, anymore?