Hi CB, Just observations: <<"Shorting the market is unAmerican. Because I am long." ... Is it a better idea to listen to people who are disinterested and have no stake?>>
No easy answers, you are right.
There are no disinterested people on what has happened and will soon happen. There were lots of ill informed people on what had been happening all along, myself included.
On Monday, let's see, a guess, and it does not look pretty ...
(a) the insurance companies need to sell bonds to pay claims, so long term interest rate will rise
(b) people will believe the governments all must 'print' money, so long term interest rate will rise again globally
(c) mutual funds will need to sell, if only to prepare for redemptions down the various forks of the many roads, and so will sell bonds and stocks
(d) the real esate lending engine will grind to a halt, and so asset backed securities will be sold, raising interest rate some more
(e) but foreigners will determine that the US is no longer the place to invest or to park money, and so will sell ... in fact all money will go back to their natural home because investment interest will collapse everywhere
(f) US and global consumers will simply stop buying, and so turning off the trade deficit engines of all countries, with US having the largest engine, short circuiting the capital flows back to the US from net exporting nations
(g) companies will finally conclude that recovery is not around the corner or the next block, and so will put in contingency plans, cutting people and investment budgets
(h) short rate will be cut by FED, by, say, 100 basis points
(i) currencies, harder to guess at, so lets just say "volatile"
(i) all little guys are encouraged to allow the big boys a clean exit from their positions, for the good of the nations
(j) security related non-productive cost will rise, productivity will decline, and oil price will rise
all possibly resulting in deflationary stagflation, or the Perfect Storm.
I do not know if Soros is still coming to HK this Wednesday to receive the faithful, and even if he is, I am not sure I want to go any more, given that HK is an open society and we may have many enemies in our midst.
Just an admittedly politically-incorrect guess.
Chugs, Jay |
