Zeev: Here's another view as or more pessimistic as yours
for the long term, but without any of your useful market timing outlook:
safehaven.ca
An excerpt of his grim reaper perspective:
"The dilemma, as we have addressed for some time now, is not that policy is ineffective in stimulating normal borrowing and spending patterns. The insurmountable problem is that a Bubble economy of such historical proportions requires enormous sustained credit excess – feeding to all the beckoning valleys, cracks and crevasses - to maintain the semblance of a normally functioning system. Clearly, excesses of such magnitude are problematic and increasingly destabilizing for both the economy and financial system. This then explains why the frantic "terminal stage" of Credit Bubble excess is generally (and fortunately) short lived.
Nonetheless, the authorities have embarked on a futile and increasingly precarious course of attempting to resuscitate unsustainable boom-time demand. Do they truly believe it is advisable to stimulate a wild burst of vehicle sales, unprecedented mortgage credit creation, and such extreme money supply growth? While these actions are indeed forestalling a severe downturn, they are significantly increasing the probabilities for much worse down the road. The U.S. economy’s greatest ills are structural, the unavoidable consequences of previous gross borrowing, speculating, and spending excesses. It is our view that these types of deficiencies and imbalances are only growing more dangerous. The patient has been poisoned by credit and speculative excess, has suffered severe damage to internal organs, and is in critical need of extended bed rest and carefully guarded recuperation. The Fed is injecting steroids and prescribing an aggressive exercise program. This will be a regrettable case of the Federal Reserve being forced to learn the hard way that there is no shortcut for a necessary healing process/adjustment period.
It does not today take a wild imagination to come up with a scenario where collapsing demand in the overheated auto and residential real estate markets lead the economy into a very deep and protracted downturn. Indeed, objective analysis would today have to consider such a circumstance as a reasonably high probability scenario."
Like you, I used to never short. Being a valuation-oriented investor, tired of losing money via LTB&H, and without the time or inclination for much trading, I've this year resorted to shorting. Your market timing prowess works as well when heeded for the downside. Don't eat those turnips! |
