A few points soros.
1) Savings rate is irrelevent, USA citezens invest money and savings in IRA's and 401 k's. This is where Americans save their money. WHy would you save money in the bank at 4.9%? It is not effient use of capital, one of Japans problems.
2)Japans market was 2-3 times higher then todays market in the USA
3)Japans economy had real fundimental troubles including dwindiling population of workers, and slowing productivity.
4)Their Government created bubble by providing credit that was almost free in an attempt to manipulate their ability to export. Real Credit rates here are two high not to low
5)They learned the faults of Govnt controlled economies, and banks hand pupets.
6)USA has created more real economic gdp IN LAST 10 years then in predeceading 30. PC, cell phones, bio tech, fiber optics are not smoke and mirror business's. They have real fundimental export value and will drive the next 10 years of growth.
7)Ralgh Ancompora also said QCOM was his best pick this year? He is the class dounce and has done nothing but call bottoms as a contrary indicator
8)In 1990, 1987, 1998 etc huge 30% corrections were short lived, why would now be different.
I dont disagree with you market sentiment, but I do disagree with the mentality that it will be some end all collapse. The big collapses were caused by REAL macro issues. In 70's it was inflation, in 1929 it was Tarrif barriers,Deflation and unbelievably poor central Government. In Japan it was a matter of Central planning gone amuck. It was also set off by the war in the gulf in 1990. BIG collapses are caused by extroneous events, like wars, embargo's, LTCM collapses. I see no major problem that a 20-30% re-evaluation wont correct. The stock market is not going to 6000 as long as the Baby boomers are in their prime. That is what is driving this market, just the same people who drove the Real estate market 10-15 years ago when they were all settling down. It isnt going to last forever, but it aint over yet either.
In the worst casethe market will bottom and rally to test old highs, a good tradeable rally IMHO. |
