It isn't subprime that is the enemy anymore, it's the FED. The rate cuts are killing the US consumer which is killing the US economy. The FED needs to start raising rates, get inflation in control and attract foreign investment into the US as the $$ starts to strengthen. Until he starts raising rates, you can forget about a long term bottom.
What I fear is having a few banks failing followed by a run on the banks. Accompanied by people sucking money from their 401K's and taking the penalty. Everyone is talking about INFLATION but the one to fear lurking behind the door is DEFLATION.
Judging from the responses here, it probably is. Ironically, "elite traders" appear to be some of the best contrarian indicators. Joining them are financial media like WSJ and FT, who sound more like David Tice and the Daily Reckoning crowd than respectable journalists these days. That's nothing new, though. I remember all the doomsday stuff they wrote in 2001 and 2002. I recently heard about someone who read 70,000 newspaper articles written just before previous bear markets and steep corrections turned around. Not surprisingly, the "sky is falling" them was at its worst at the bottom. Not sure if we're there yet, but I don't think the contrary indicators can get too much worse.
real estate here in los angeles is only down 17% off peak. I expect real estate to follow bank stocks. They both have a pretty good correaltion over the last 10 yrs i guess. So with banks now down 30-70% i expect RE to play catch up. Nobody can qualify for a loan so i dont know who can buy a house.You need about 20% cash down here now and the avg home is 550k(this is the foreclosure price!) even though the median price in la county is 470k(lots of poor areas diluting reality).Banks are holding so much foreclosure and short sale inventory its nuts and we have not even touched the next 2 yrs of mortgage resets-summer of 2008 and 2009. Most of the houses we see are foreclosures and short sales.Weve only just begun the RE implosion.
Its far from over, we are currently in a bear market and recession, however I do see a bounce in the market very soon, Im bearish on the overall market, but think the dow gets a slight lift back to 12000-12200 area.
Long rates are very sensitive to inflation. Dropping short rates is actually causing long rates to rise. this is due to the effect it is having on the dollar.
Its over (for today only). Bear protection team all over the world is covering in the futures right now. Just give me one strong relief/sucker rally today.
SELLLLLLLL SELLLLLL 12,000-12200 IS GOING TO BE THE SELL POINT, surprised to see this prediction come true in less than 24 hours.... if you took any positions yesterday today is an opportunity to sell, I did. Will be buying back after the next sell off.