Hi Tradelite, Is it possible that negative equity, devolution of career, rising interest rate, need to cut back on consumption, saving for kids' college cost, and shrinkage of financing pool will act in concert to make a good number of the baby boomers want to sell?
If yes, then the lack of liquidity and transaction volume, due to reduced or negative economic growth and bad psychology will dictate a relatively low market clearing price.
It then follows that the very motivated sellers, at the margin, will cause other "nothing downs" to go into negative equity; and at that point, the still developing equity market implosion will do further damage, in discouraging international cash flow to the US, and raising interest rate.
Consider the possibilities. Above admittedly embellished scenario had happened in bits and pieces before, in the US and elsewhere. The construct of the scenario requires no imagination (I had always admitted I have none), and believability of the scenario allows no hope for single minded nifty-fifty, dotcom, slashnet, tech, currency, and real estate bulls.
Chugs, Jay
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Message 16267873 |
