Re: gotcha there for a moment, eh? buy the dip...-g-
heinz, you can't be serious.
The BK could happen any day. Funny thing is, I'm probably the only person under 30 that can see this.
A while back, I predicted it would happen when a few of the big techs missed at the same time. You said, according to history, this doesn't have to be true. I agree, but think this is what will eventually cause it. It really could've happened a few months back if there wasn't enough cash on the sidelines to save the day, but there was. If you look at the state of the market, what's there to support these techs valued at $20+++ billion market caps with 100+++ P/e's (or better yet, no P/e)? Honestly, nothing, except a whole lotta cash. Should a group of techs miss at the same time, it would be disaster.
We have many things working against the BK, for starters, low expectations by ANALysts and a big supply of cash looking for a home. On top of that, many books are cooked and ignored by the ANALysts.
The worst thing of all is the gov deciding to buy back bonds. I was listening to CNBS this morning and heard a blurb about how the recent bond buy back created a bunch of cash looking for a home. The gov is caught in a catch 22. Do they buy back bonds to create more cash to further inflate the bubble? Or do they not do any buy backs and leave the debt at unreasonable levels?
IMO, they're screwed either way. I like the analogy used before about speedballs, because I think that is what our gov is stuck doing. They either crash the markets or inflate the bubble even further? Or they try to keep walking the tightrope and hope nothing goes wrong. The margin is the problem. Earlier in the year, many were looking for the BK and had cash on the sidelines to save the day. At times like this of overwhelming bullishness, the cash isn't there to save the day. Margin calls cause people to sell more than just the dot bombs, they even have to sell the "good" stocks.
I think it's only a matter of time. It will hit like a brick wall and leave a lot of people screwed, IMO.
chic |
