Wall Street has a had a wild ride this week, from the bankruptcy filing of Lehman Brothers Holdings to the government rescue of American International Group , investors have had plenty of news to digest. As the market absorbs the latest reports, which include steps by the world's central banks to shore up global liquidity; Morgan Stanley's decision to enter into advanced merger talks with Wachovia ; and Washington Mutual's attempts to raise capital, CNBC asked the experts what investors should do.
Time to Buy
"I don't want to come across as blindly optimistic; my guess is that at some point, Joe, a couple of years from now, we'll look back and say, 'Why didn't we buy more U.S. equities with the S&P below 1200?'"
-Robert Doll, BlackRock, Vice Chairman and Chief Investment Officer
Time of Fear
"I remember an old wizened trader telling me, 'There will be moments in life in Wall Street where fear and/or greed will dominate the scene most of the time, and they'll be the most exciting times,' and we're in one of those fear periods, and they sometimes go on longer than people think."
-Jon Corzine, Governor of New Jersey
A Bazooka in the Pocket
"To go back to what Secretary Paulson said about the bazooka in the pocket, firing the bazooka, you need to fire four bazookas simultaneously. The first bazooka is to reliquify the system, and that means putting in funds like the central banks are doing, and cutting interest rates. The second bazooka is to deal not with liquidity, but with capital. The system lacks capital, so it's to inject capital in some key financial institutions. The third bazooka is to stop the deleveraging, which is buying top-quality, highly-rated securities, and the fourth bazooka is on the regulatory side, to go from a pro-cyclical regulatory risk function to an anti-cyclical regulatory risk response."
-Mohamed El-Erian, Pimco Co-CEO and Co-Chief Investment Officer
"Clearly, this is a once-in-a-lifetime opportunity. You don't see this very often, and I'm not sure I want to see this very often, but for people who have capital - we have about $40 billion of dry powder to invest around the world - for people who have capital, this is probably going to be one of the unique times to invest capital."
-David Rubenstein, The Carlyle Group, Co-Founder & Managing Director
Private Equity on Hiatus
"Until you kind of know where the bottom is, until you have some sense of the assets you're buying, you can't do anything, and so, you're going to see for the most part, a period of hiatus in private equity, as everyone kind of regroups, finds out where the values are, and of course, you can't borrow any money right now to do a classic leveraged buyout."
-Steve Rattner, Quadrangle Group, Managing Partner