Ild:
My supposed expertise (a highly questionable assumption) is strictly limited to the tech sector. This sector is experiencing the worst environment for sales that I have ever witnessed (close to two decades). Tech inventories are also historic. This quarter's warnings will be the worst we have ever seen unless some new lies can be created, which I doubt.
Tech has been and continues to be the main focus for speculative "investing" (a joke) and a very large part of the supposed success story of the U.S. economy. Thus as the tech sector comes apart, it has potent impact on the rest of the economy. Many aspects of the U.S. economy are already sagging badly and the lay-offs continue unabated. I just don't see how we avoid a collapse given the momentum that this nasty spiral has already accumulated.
For those who think that the economy isn't experiencing fairly generalized deterioration, trucking stats should be examined. As I have been pointing out for a year, trucking activity is in linear descent. That is an indicator of general economic decline, not tech sector economic decline. There are plenty of additional economic indicators that are also turning bleak. From my point of view, an investor who can't see where we are heading just by looking around or reading the newspapers occasionally, has a self-imposed blindfold in place and gets what he deserves for his stupidity and stubborness.
Each of us must sift the evidence at hand and make a determination as to what the general trend of the market is. In my case, I think the economy is in a tail-spin and the markets are in the early stages of a severe contraction.
Obviously, there will be potent bear market rallies and this recent example of the breed is a good one. That said, the bad news just increases, so from my perspective, there is little evidence of the general trend reversing, in spite of Greenbat's insane printing marathon. Some folks in the market obviously think his printing may be able to turn the tide, but so far, the evidence suggests otherwise. It takes more and more debt money to keep such a monstrous balloon inflated and "pushing on a string" always waits in the wings.
We have total saturation in many end markets. The consumer is now borrowing just to stay in place on the tread mill. Corporations are massively debt-encumbered and their cash flows are drying up. Offshore and peripheral markets are showing serious signs of stress. The quality of the outstanding debt is deteriorating, even as Greensputter tries to shove more into the engorged system. And with each passing day, the evidence suggests that "the supertanker" (thanks AJC) ain't turnin' and the iceberg draws nearer at our twelve oclock. To play the long side in this scenario makes little sense at this end.
Bear market rallies can be brutal and a good short doesn't fight them. Unfortunately, they are not easily spotted in advance. That said, if one sees momentum building, it makes sense to take the early (small) loss and stand aside until the upside momentum peters out. If one is fortunate enough to have been on the sidelines during the rally, another delicious opportunity to enjoy yet another downside ride is available. My sense is that we are at or very close to just such a nifty point, hence I am once again foraging.
Best, Earlie |
