Jim, it is all borrowed money, so people only care what their monthly nut will be. The public has been drunk on borrowed money for years. Just like all the dot coms were drunk on ridiculous ipo money.
I recently read a piece by Andy Grove, of Intel fame, and his thinking is that the infrastrucure for the internet was built on the backs of investors, many whom now have nothing but losses to show for it, but the infrastructure lives on...
Mortgage rates are stuck, being that they are more or less tied to 30 year bonds, they won't get much cheaper, Imo, no matter what Greenspan & co. do to short term bank rates.
However, Geenspan said yesterday that household wealth is and has been bolstered by rising home values, which means 2 things, to me anyway, housing has been in it's own inflationary bubble, and with rising values, people are sucking every penny of equity out so they can keep spending. It leaves no margin of error, no cushion in case of bad times. Reminds me of a rat on one of those spinning wheels..
Rather than look for index, or the big final total market bottom, the one that none of us will recognize when it happens anyway, I think it is much more constructive to look for rounding bottoms in individual stocks, which has been working for the past year in the low price rat type stuff. |
