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This Isn't a Bottom, It's a Disturbance in The Force
This Bear Market is Worse Than I Thought
Good luck with holding.
There's Light At the End Of This Tunnel
I think you're spot on with the impending opportunity. We are almost certainly due for a snap back upwards. The problem, of course, is timing it. When it comes, it will probably come quickly. Move in too soon, and, well... it could cost you. Two days ago, there were plenty of folks screaming "this is it" and "shorts are idiots." Today, those people are down around seven percent (annualize THAT, suckers).
Yeah, there's probably a short term rally coming, and it will be a great way to make some quick cash if you can get the timing right. Dangerous, but, wow, you gotta try. Those of you thinking about how very obvious it all is... a little humility, please. None of us really know diddly.
Congress' Economic Literacy (Or Lack Thereof)
A Bad Day, Yes, But Enough with the Hyperbole
5 Ways to Diversify Away from the Dollar
Couldn't agree more about the world's unwillingness to lend us money at such ridiculously low rates. My God. Of course they'll get paid back, but in dollars that have a hell of a lot less purchasing power than the one's we're using today. Gee, do you think Chinese economists understand that? I'm kinda guessing they do.
What Effect Will Hyperinflation Have?
China, while definitely destined to eat our lunch, is not going to be rebuilding the world. They, instead, produce cheap toys and Nike knockoffs. They sell us all that crap we like to buy. In a true meltdown, if it happens, no one is going to be running out to buy the latest Ipod (or anything else). Business will suck for everyone, though I do admit they would be a lot better off than the U.S.
glta.
Details of the Financial Bailout Package
A Paulson Fan's View of the U.S. Mortgage Company
On the upside, we, the taxpayers, actually stand to make out pretty well. First of all, Wall Street probably won't melt down now, and you guys won't lose your jobs. Most of you are in "unrelated" professions, but following that melt down, you'd probably still be hurting ...bad. No credit, no loans. No loans, no businesses. No businesses, no employees. No employees, no customers. No customers, no jobs, etc.... There's some hyperbole here, I know, but not much. This thing was a big shit sandwich, and we all would have had to take a bite.
Second, these "bailouts" were more akin to vulture capital. AIG, for example, basically just needed a bridge loan so they could make some short term payments. After that, they'd be able to sell some assets to pay off their bad bets. The short term money crunch threatened to destroy them. So Paulson, like any good Wall Street shark, gutted them. "Here's a relatively small loan at a very high interest rate, plus, oh yeah, 80% of everything you own." They were dying, so he robbed AND raped them, and they had to thank him for it. ...And you're complaining. Jesus.
The key to this whole thing was time. Someone with skads of cash (like the U.S. government) and no time pressure stood to make tons, and Paulson recognized it. Make this guy king. At this rate he wouldn't need taxes in five years, and in ten the government would be paying you dividends.
He saved our asses. Get the man a medal.
An End to Efficient Market Theory
Yes, I'll be missing the bounce, but there's no way to know when that will start or where it will stop. Since the long term trend seems pretty clear, it's time to develop some patience.
Take a look at the historic actions taken by the Fed, then ask yourself if you really think your being on the sidelines will cause you to miss out on the next bull market. I think not.
Lehman Bankrupt, Merrill Swallowed, AIG Wilting: What It All Means
Lehman Bankrupt, Merrill Swallowed, AIG Wilting: What It All Means
2) Crude hit a low because the economy is tanking. Lowering a price from "totally unaffordable" does not make it cheap.
3) The current PE depends on the P AND the E. 14X is still high by historical standards, and if you don't believe the earnings will hold (and I don't), then it's really a higher ratio than you think.
4) The economy is not growing at a 3.3% clip. The number is complete, well, ...bullshit. They used a fictitious inflation number. If you really think the economy is growing that robustly, then maybe you should look out of a window.
5) The dollar is not rebounding against other currencies, they are falling to our level because their economies are also slowing (that's bad for us). Having everyone fall down after you doesn't mean you got back up.
A recovery will come (oh sorry, I forgot we're not in a recession), but that requires business expansion, which requires loans, which requires that most members of your financial sector not be fighting for their survival. The recovery will come, but it will be awhile.
Think about it. Fannie and Freddie have effectively been nationalized, 100+ year old firms are going belly up, housing continues to fall, the Fed is low on dry powder, we're still involved in two expensive wars, the global economy is slowing (not bottomed, SLOWING), consumers are in debt up to their eyeballs, and, most importantly, the financial firms that fuel recoveries DON'T HAVE ANY CASH.
We are not close to the bottom. Hate to sound negative here, but please. Just because everyone knows something is obvious doesn't mean they're wrong.
An Optimist Looks at the Market
Just because everyone believes something doesn't mean it isn't true.
Joy Global: Waiting for Hedge Funds to Finish Dumping
Investors: Down the Rabbit Hole