Interesting, and for once clear and lucid statements on what you really think.
I'm inclined to disagree with the depth and length of the disasters you see. Most of the information in the US that is negative tends to be lagging information, not leading, at this stage. That, of course, has a deadly effect on psychology...which is what drives markets, hence the bear market (which I've never denied was in place).
I disagree about Greenspan being wrong about anything, as well. He raised rates responsibly, as he thought he should, during the bubble until it burst. He called the irrational exuberance before it actually was truly irrational. He has acted very responsibly in lowering the rates, though one would hope that he would stop "tantalizing" us with hopes of lower rates.
I, for one, remain in the market for a number of reasons. The main one being that if you're out, it's tough to know when to get back in, especially if you're not a technical analyst (I am not). The second being that moving money between various money earning vehicles (cds, money markets, bonds, stocks, etc) is too much effort for somebody like me with a full time job who doesn't have enough to pay somebody to do it for him.
I agree about diversification, but that's a no-brainer and should be engaged in at the best of times.
I agree that SOME choice locations will suffer real estate setbacks...unlike the post you made many months ago about a COMPLETE collapse of the real estate market. Nice to know you've returned to reality.
Still...none of the things you point to, nor any of the indicators (leading or lagging) indicate particularly desperate times. The SOLE indicator that currently gives me pause is the negative savings rate. However, it is clear that this number has been manipulated over time because when I was in college so many years ago, our economics professor was lamenting the abysmally low (3% at that point) US savings rate. However, I recently read a paper about the negative US savings rate, and the numbers they were using didn't jibe with anything I've read over the last 20 years....so I'm still trying to figure out which savings rate is negative and just how negative it really is.
That said, a negative savings rate is only a bad thing if people aren't improving their cash flow situation. That doesn't seem to be the case.
So, we remain on separate sides of the chasm. You still think the glass is 2/3 empty, I still think it is 1/2 full. |
