No more tryin to catch up moves for me, today was painful. Im short or sidelines until the second coming.
It is true that we are in a deleveraging economy with lots of layoffs up ahead, but all of this has been discounted by the worse market sell-off since the 1930s. The question is, whether things can be turned around. I think that there is a distinct possibility that the new administration can. The Feds will continue to borrow and print money, and even leverage its own balance sheet as much as necessary. There will be no inflation until the velocity of money begins to increase. When - and if - this happens, the Feds will then begin to remove the excess money from the economy in a process that will induce inflation (which is what they want), but hopefully not create hyperinflation. But that is a story that the Feds have no concern with at this time - borrow, borrow, borrow, print, print, print, and do everything required to prevent deflation. This will all begin to turn around when Obama is inaugurated. The market will most probably rally in anticipation, since the amount of money entering the system will be unprecedented and beyond belief. In the meantime, Paulsen is simply helping his buddies who are probably short. What a do-nothing to have running a nation's busines. The really scary part of all this, is not the economy, but that there was a healthy minority of voters who actually put Palin (Bush II) just a step away from the Presidency. Terrifying. Rich
FRAK! Okay so we expected a little correction... What the #@Q*$&*#^%&#^!!!!! God I hate it when those morons come on television. Who is the monster behind the curtain in this land of Oz?
I tune off the talking heads. They tell the public to buy high while they are selling, and tell the public to sell while they are accumulating. Joe Battipaglia, Gary Schilling, and Nouriel Rubini, I find worth listening to for a more macro view of events.
But what happens if that 'unprecedented' amount you speak of is worth less? What happens if you need a wheelbarrow of dollars just to buy a loaf of bread? THAT in my opinion, would really be 'beyond belief'.
I really expected the market to reverse at some point to-day. started accumulating on the way down. did not sell out at end of day. i would expect a gap up or some sort of reversal tomorrow as well....worst sell off since the 1970's.... in Toronto we were -9.3%. After a reversal, we may well test the lows and go even abit lower.
I had a limit order to Buy in today, but the price of QLD is hovering right above it. I am not going chasing though. I will watch the action tomorrow. If I can buy it lower, that is great with me. My objective is to buy as much as possible at this level, while maintaining cash reserves for purchases, should the market go lower than expected.
You are somewhat more optimistic than I, nevertheless i agree in general with your views. My concern is that the productivity increases that will be ultimately needed to support the level of debt that the US must assume can not be achieved rapidly enough to satisfy our creditors. Most likely the market will eventually be lifted by inflation as inflated sideline dollars return. Whether for many years to come any progress at all in constant dollars can be achieved is another matter. Sad to see so many losing jobs at Christmas time. Once the tax selling is complete by the third week in December, perhaps we can have a little end of year rally fueled by an improved outlook, as the incoming administration is so obviously much more competent than the last.
Yes, everyone is simply guessing at this point, as to what will happen, other than everyone knows that the government is going to flood the economy with dollars, by borrowing (from China, Japan, etc.), printing (electronic printing is very efficient nowadays), and leveraging its balance sheet. I think it may take almost a decade to dig ourselves out of this mess. Just long enough for the next generation to come along and believe that it is possible to lead a good life by just continuously borrowing. C'est la vie. In the meantime, creditors will have no choice, but to allow us to rebuild slowly - the alternative is bankrupting the U.S., which is unlikely to happen. If Citi Group is too big to fail, surely the U.S. is way to big to fail. Everyone will have to learn to consume and live on less. This is actually not a bad outcome, as long as people have jobs and some savings to fall back on. I am not look for a Cinderella ending to this story. I think that most investors will end up losing money, since they bought high and are now reluctant or impatient to buy low. But the market will recover next year - maybe a 50% retracement from its high, and there it will get stuck for a period of time. I lived through the 70s which was equally awful. That is why I am relatively conservative and thoughtful of how I spend my money. Buying up the U.S. at this price is, for me, a no brainer. If I don't, then China will. Cya, Rich