”You know, I’ve lost more money in smaller positions and made more money in smaller positions in the last year than I have in 12 because of the spikes. Volatility has been unbelievable,” Firas Askari, head of foreign exchange trading at BMO Capital Markets, said at the Reuters Investment Outlook Summit.

With that in mind, ”If you know a trader, buy him a drink!” he said. 

Click here for the sound clip. 

“I think it’s fair to say it will not be as deep a recession, if
 it is a recession, as many people had feared not that long ago.
 There certainly is not a black hole developing in the U.S. economy,” Cohen told the Reuters Investment Outlook Summit in New York.

To hear what Cohen, one of Wall Street’s most influential strategists, had to say about the economy,  please click here.

 Cohen also said she thought the technology and energy sectors were likely to be strong in the intermediate to long-term.  To hear her view on sectors, please click here.

Asked to give a letter grade for the performance of U.S. Treasury Secretary Henry Paulson during the credit crisis, Goldman Sachs’ senior investment strategist Abby Joseph Cohen laughed. “I spent several years where he provided a performance review to other people,” she told the Reuters Investment Outlook Summit, about the former Goldman CEO. To find out how Paulson fared in Abby’s eyes, please click here  

Republican presidential candidate John McCain didn’t leave the best impression on Dr. Doom.

“I was a little bit dismayed when Senator McCain said flippantly that he does not know too much about economics but carries Alan Greenspan’s book under his arm. That does not encourage me,” Henry Kaufman, president of financial consulting firm Henry Kaufman & Company told the Reuters Investment Outlook Summit.

For a sound clip, please click here.

   Credit ratings agencies have been under fire from investors for giving the highest ratings for what turned out to be risky assets.
    But Standard & Poor’s President Deven Sharma told the Reuters Investment Outlook Summit investors just didn’t really understand what a triple-A rating meant.
    “It’s a question a lot of people ask: Is a triple-A a triple-A a triple-A?” Sharma said. “We reflected on it and recognised one of the things we didn’t explain to investors as much as we should have done is what comparability of ratings really  means.”
    To listen to what he had to say, please click here

Veteran Wall Street banking analyst Richard Bove sees Lehman Brothers surviving – but he doesn’t think they’ll be making a lot of money.
   There’s just not a lot of business there at the moment for brokers like Lehman, he told the Reuters Investment Outlook Summit in New York.
    To listen to a clip of what Bove had to say, please click here

Veteran bank analyst Dick Bove gives his views on the fortunes of the banking sector, including the risk of double-digit inflation on the horizon, that bank earnings are going to double over the next couple of years, and that Lehman will survive.

He also discusses how bank managements can’t seem to fight the trend.

 ”If the surf’s up they make a lot of money, if the surf’s down, they drown,” he said.

Listen to all of Bove’s musings here.

Compiled by Thomson Reuters Proprietary Research Group

• There have been five terms out of the last 16 where the last year of the term has a negative return on the DOW, and four of those terms have been during a Republican president’s term.
• When we look at the previous 90 day returns before the new term, we see that the markets are generally positive (only four negative in the last 16 terms).
• Elections are generally held in the first week of November. When we take the previous 60 day returns before the new term (from Nov. 20 - Jan. 20), we see that the DOW returns are even more positive, with only two terms out of 16 preceded by negative returns in the previous 60 days. This says that the lack of uncertainty after the elections usually give a boost to the market.
• Only three four year terms have had negative returns. 1973-1981 (Oil crisis) and 2001-2005 (Dubya’s first term).
• On average, the 90 days before the new term performs much better (3%) than the 90 days after the new term starts (1.1%).
• The last three terms have started with negative returns in the first 90 days.
• Since WW2, the Dems have had 7 terms and the Republicans have 8 (excluding the 2005-2009 Dubya term). The Dems have done slightly better (8.3% vs. 6.7%) in terms of average annualized returns over this period. However, these numbers are skewed in their favor because of the Clinton-Bubble era.

The stock market and the Federal Reserve have been acting like partners in a ”failing marriage” following Tuesday’s 25-basis-point interest rate cut, said James Grant, founder and editor of Grant’s Interest Rate Observer.

He was referring to the stock market’s sharp drop after the Fed’s rate action on Tuesday. Many on Wall Street thought the move was not aggressive enough to help stave off a recession.

“The Fed and the markets have had a kind of duet,” said Grant, speaking Wednesday at the Reuters Investment Outlook 2008 Summit in New York.
 

Jim O’Shaughnessy, chairman and chief executive of O’Shaughnessy Asset Management in Stamford, Connecticut, said the sell-off in U.S. financial stocks may have run its course, and that the sector is “looking attractive again.”

The market has already seen large write-downs from financial companies, he said.

Also, he said investors always need to pay attention to valuation when picking stocks. “Valuation matters. It matters in any market environment,” he said.