Kyros, you hit it on the head: deeper trouble ahead
the central prop to the entire economy is residential RE
its support of consumer spending (kids college, second car, vacations, even vacation home, boat, furniture, clothing, room additions, bill consolidation, etc etc) is much more comprehensive than available margin on stocks and mutual funds
my guess is RE home equity and refinances are worth 20-25 times as much as stock margin lines
when property prices begin to descend, we enter the deeper phase of this recession
this phase is not gonna be expected by Main Street
their mantra has been "everyone needs housing"
we also need retirement funds, but those are gone
the USdollar is also trending down
it might catch its breath downhill for a while
but I expect parity with the Euro before next spring/summer
if both happen, then FULL BLOWN RECESSION
it would last for at least a year
as in, at least into 2003
the silver lining is that true economic recovery cannot happen unless the USdollar is lower than current levels
but the slide down is to be painful
European investors will step to the sidelines, as has begun
they will re-enter when our recession is ebbing
I think what ACFlyMan is seeing is a reflex mfg rally !!!
/ jim |
