re: "chasing shadow's around corners"
...I don't know about anyone else; but the only thing that I've seen is a lot of pom-pom waving, cheerleading hype about this rally and the still MIA-economic recovery.
The market tanks on IBM & Oracle seeing no turn on the horizon for tech one day, then rallies like "it's 1999" the next when all Cisco does is release yet another pro-forma, posterchild for financial engineering release... !?!?!?
- a little schzio imo ?
All we've seen is the fundies and the ESF/PPT gun the "futures" at the open on the Cisco news and then on the Retail Sales numbers.
All this Rally is about; is fund managers "chasing each others shadow's around corners" - as the entire Money Mgmt game in the late 1990's was & evidently still is about keeping up with your peers and not missing any rallies.
The only reason fund mgrs bought these rallies is because someone else did... and they can't afford to be left behind.
This reckless fund management philosophy hasn't died yet... but, die it will...in time.
I think most investors who can fog a mirror; recognize Cisco for what it is, recognize it isn't cheap by any sane historic market multiple valuation metric, realize it is the posterchild for all of the accounting problems in this market environment... and see that nearly half of it's customers are, will, or have went bankrupt ?!?!
As far as the Retail Sales numbers...here's a nice take from the "Daily Reckoning" site:
[..."Business investment is both the sine qua non of a decent recovery and the one thing this recovery hasn't got.
Instead, what it has is what Dr. Kurt Richebacher calls
"Ponzi financing," in which "debtors have largely
stopped financing their interest service out of current
income, meeting it instead by further borrowing."
"To get an idea of the possible amount of Ponzi
financing," Dr. Richebacher continues, "we did a simple
calculation: At the end of 2001, outstanding credit in
the U.S. totaled $29 trillion. How much interest may
this monstrous indebtedness presently require? It can't
be far from $2 trillion annually. Strikingly, this
amount roughly corresponds with the recent annual credit
growth. Rapidly rising unpaid compound interest appears
to keep the American credit machine running at full
speed..."]
***************************************************************************************
All we've seen is consumers regurgitating the last round of Mortgage Refinance's, Tax Refund's and easy credit morsels.
We just churned the entire Mortgage Refinance market with rates that had not been seen since Kennedy was President... and what that did was the same thing that "0%" Financing did for the Automakers - it stold business from the future.
The US Consumer can't say no !
...it's that simple.
Greenpimp & the Rubinites allowed Main St. America to put themselves and their homes (at the peak of a Real Estate Bubble)deep into hock, to an unprecedented debt level... via another wave of reckless credit expansion.
We didn't just "mortgage" our homes; we mortgaged our future; as anywhere from 30% to 50% of refinances took cash out and emptied their equity to whatever the "max" Loan to Value limitations they could...and THAT "aint" a good thing; when you "max out" atop a Real Estate Bubble - when the consumer is all ready at unprecedented debt levels.
WHEN, NOT IF... the consumer debt bubble is going to burst.
THAT is an important and completely ingnored concept going forward where any prolonged economic recovery is concerned.
All Greenspan is doing imho; is recklessly pumping and pimping this reckless debt orgy up another notch; to inject enough cash to move a couple of economic stats to the degree he can proclaim the "recession" over, or non-existant... and retire.
...don't be fooled.
...for those taking profits, or getting goldstock stops triggered; waiting for a pullback and rotating to the silver side isn't a bad idea imo.
The anti-Gold Cartel strategically should come out of the woodwork here - so plan accordingly. This has been a nice run; we're due for a pullback...trade accordingly. |
