JQP, why I am not bullish:
geocities.com
Rate cuts are having no effect to this point. Although short term rates such as those on CP have fallen dramatically in the past year, demand for borrowing is still dropping. Even on a percentage basis, the drop from the peak is the greatest on record (data begin in 1979). When I see corporate borrowing turn around, and stock buybacks being announced, then I will feel differently.
Note how little short-term borrowing dropped during previous recessions, compared with the current plunge.
How can this chart be reconciled with a bullish stance? I'd like to be buying ahead of the crowd, and I would like to be persuaded that I am missing something if that is the case.
Also, it seems that releases of well-known economic statistics are just noise, and are already priced into the market despite appearances... to gain an edge, IMO one must monitor non-traditional indicators such as shipping rates, prices of cardboard, blank/used billboard ratios, residual values of leased vehicles, etc. |
