always good to have a look at both sides. I am short term bearish, middle term bullish (until end of 2009 to mid 2010) and long term bear/neutral. Long term bull for several emerging markets. Big money is not to be made in USA next years but elsewhere (South america, China, vietnam etc.) As I said I think there is a reason behind the run up of the BKX, borrow short and lend long is heaven now for banks and this will definitely be seen during the next quarters. Banks can fill their pockets on the expense of industry (who would need the cheap money) and tax payer. But this will push the S&P higher. Also I don't agree on your low inflation scenario. Inflation will gain momentum from end of 2009. This will also help push up indizes.
The article is so poorly written, and the logic so flawed, I stopped reading it two-thirds of the way through. Now that I've learned the author is only eighteen I'm a little more sympathetic, but still not willing to waste my time with this drivel. Pity his suffering English professors.
Bylosellhi, Of course this is a great article, it defends your beliefs. I am not here to argue the validity of his facts and opinion but I did take away something. "I want to say here that I understand there is no arguing with the market. It is never "wrong" as only price pays." Kev
I think the percentage of people who believe this rally is the beginning of a new bull is very very low. This makes it even more interesting. If you compare 2003 and this rally the similarities are striking. 2003 I heard the same arguments and people only discussed points to reopen short positions, no one was talking about opening new long positions and still the market kept rising. I don't 'feel' 2003 here. March 2003 I remember some very good people were calling a buy in stocks, I hear a few now but not with the same conviction. The Iraq war was going better than expected, we were not in a recession, the 2001 recession was pretty tame, people were still feeling a little exhuberant after the 90's, and corporate accounting scandals were nothing like the the scale of the present bank failures. I went all-in and felt very comfortable. I would not be comfortable going long now but that's just a feeling. At least wait for a pullback. The 2003 bottom also seemed to spend more time there, it wasn't a V, more like a multi-month painful and frustrating double or triple bottom. Should that matter? I'm not sure. The 82 bull started after an extremely long period of malaise and a dramatic shift in monetary policy, the post depression period was built upon the fact that global competitors were leveled. 95-2000 was a tech bubble, 2003-2007 was a housing and credit bubble. So we need another bubble in something, a war, or some type of big positive change in the financial system.... The wild card are foreign economies, maybe this time they could take over leading and consuming then all this won't matter as much. I am worried but maybe that's the wall this market is clinging to. It seems at some point though there needs to be real growth to sustain it, I doubt government printing presses will be a substitute for real organic growth.
At least in the current rally we aren't seeing the phrase "secular bear market" every other post... that drove me nuts in 2003. In the 90's it was "nosebleed levels". People complained about the nosebleed levels all the way up!! And then they couldn't deal with the market on the way down !! Who cares about anybody's opinions let alone some kid that discovered word processing last year...
It is all about the banks. Until they are healthy, you are going to be continually looking over your shoulder.
It's about the toxic assets and investment money sidelined out of fear. The Obama Admin is taking the necessary steps to get that sidelined money off the benches. I'm sure that McCain would be doing the same thing. Once the world is convinced that we have a workable banking system again and that the toxic assets are not still waiting to kill us, the money will flood back into the market. My guess is that it will happen so suddenly that even the Fed Reserve guys will be taken by surprise and won't be able to reign in the inflation fast enough before it does it's damage...