Bid buster, the reason you believe we are heading into a recession is 2 fold, Stocks have CRASHED, and Corporations laying off with earnings warnings, but what you are failing to understand is I believe many prices of securities HAVE ALREADY CRASHED!! Every single stock I follow is down at least 50-70% IN JUST 3 WEEKS!!! Lets look at some MO-MO stocks BRCM, AMCC, EMLX, QLGC, BRCD, EMC, PMCS, Look at where these stocks were 3 weeks ago...........ITS INCREDIBLE HOW QUICKLY WE HAVE CAPTULATED/DECAPITATED these stocks.
I have been a trader since 86, and I will tell you now FED POLICY DOEs DICTATE ECONOMIC EXPANSION. You must understand when the fed tightens, economic expansion slows down, we are now experiencing the effects of the feds bias last 9 months. They believed we were growing too fast at like 7-8%, which is historically extremely fast, with that type of growth......INFLATION follows quickly.
So the fed policy has put the brakes on our economy? No it just feels like that, we were like traveling from 1990-94 at 55 mph, then in 94 we slowed to 45, but we only went down 10 mph so you really could not feel the slow down, then the fed eased in 95 and the economy really started to pick up speed. We went from like 4% growth to like 6-7% in early 98, so we were traveling about 75MPH, and picking up speed, hit a bump in the fall of 98, then from 98-Dec of 00 we were traveling at 8% growth and like 85MPH. Then the rate hikes start to trickle into the economy but this time unlike in 94 when we were traveling at 55MPH, since we were at such a high speed, when the speed bump showed up we lost control............ BUT WE DID NOT STOP YET!! The effects are like hitting a wall going 75MPH and it hurts, but FED POLICY will dictate a more meaningful and longer growing economy.
This is why as I stated in my posts that we have definitly CRASHED in the stock market. The prices of stocks( and I am not and will not speak about INTERNUT COMPANIES) on a historic perspective have just fallen way too fast not to expect a recovery soon! I am not saying EMLX will go from 24 to 75, but from 24-55.
Good luck my friend and I will tell you one thing I believe in Alan Greenspan, he may of went too far in the tighting cycle but we make up for it on the other side. A good study of 94-95 will show what can happen when everyone thinks we are going into the shitter.....95-00 were the best 5 years to be invested in the history of the markets!! |
