R word.. JdIn.. show me the recession? Two quarters of negative growth is technically a recession, on the contarary we are seeing some stable prices and a slowing economy.
Carter era, the wealth creation of the last 1 and half decade has added 15 trillion to national wealth (Forbes) although 1.5 trillion was added to the debt, every debt $ added 15 $ to the national wealth, the productivity gains since last 15 years have been un//lled, a comparison of this economic model to Carter is gross academic error that I repectfully would reject.
In a recession or pre-recession environment BKX do not trade at new or near new highs, the companies revenues do not maintain from 30% plus to 10-15% plus growth rate, the market had a inbuilt growth rate of 30% on high P/E stocks now that has to trimmed to 10-15% that meant a drop of momentum of the market, from 5000 plus to 2500 we have seen that cut, now if the earnings and new stance of Fed revitalise the economy the 10-15% growth rate in earnings of the Tech sector may propel us to better pastures, the problem with the present situation is the percarious situation of the eaker hands who need to manage stay afloat due to extended nature of this correction, I would like to think that this new fed cutting and this new productive economy is not dead and cannot be sacrificed on the altar of 'malaised economy of Carter era', it simply show that how oversimplification has resulted into death knell for many weaker holders, oversimplification and absurd comparisons to Japan or stagflation may hold the market down few days but the strangle hold to break becomes thatm ore difficult as the ability of the market bears weaken with new evidence of better future.. I think it is not that bears who will win it will be the nOK and TXN who will ultimately comeout winner, for short trades nothing is better than trading future options to protect and average down your holding cost.. |
