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Strategies & Market Trends : John Pitera's Market Laboratory
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To: John Pitera who wrote (4575)8/31/2001 7:43:22 PM
From: Yorikke  Read Replies (1) of 33421
 
John, I don't dispute that, but I think that there are many who would agree that the FED has played cheer leader to this move and brought about much of the change in attitude. Irrational Exuberance aside, the hedge fund bail out was a confirmation that high risk taking was acceptable. It may have been AG's big bank/securities buddies who benefited directly, but it was also a green light to everyone else when it could have been made a warning signal.

Now the FED will try and dance away from any responsibility. Blaming it on the investor. They fueled the rocket, lit the match, and everyone jumped aboard. Now they want to say it was just fire works and any one who got hurt should know not to play with dangerous explosives. Most people's money is being burned by professionals (401 K holdings), and not all 401's even allow you a reasonably secure option.

When the Real Estate market crashes it is going to be worse. My opinion is that this cycle will take the savings of many average people as payment for the FED's self agrandisement of the past. Then after that the government will admit that it messed up social security and millions of people will be left clueless as to what happened to their retirement plans. Dog food companies may prove to be a good investment near the bottom of this cycle.

Yes I'm probably over reacting. But a year ago, six months ago I was over reacting and we seem to be passing all those markers that were scoffed at then. I believe that our situation will prove as bad as the Japanese. The problem with the Japanese model is that it just wont stop devolving. We are at 10 years and moving toward 12 to 15 before they likely bottom out. Lets say our situation is only half as bad. A five to seven year bear? That's not impossible if the real estate market crashes and takes all those highly leveraged buyers with it.
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