WH, there are heaps of problems now...perhaps personal debt is 'not out of historic bounds', however, there is (imo) a housing bubble and many a newbie to the market could get burned, particularly if interest rates rise. you have a massive current account deficit, and you can pick up an issue of the Economist, and note that no other major country in the list in the back of the mag runs such a huge deficit...and have you noticed (woo-hoo) that the canuck loonie is starting to strengthen against your greenback ?
I also think that some that may have been in debt were bailed out by rising equity prices (i.e. lets sell the mutual fund that doubled and pay off the condo type of a situation). Of course, you'll tell me that equity prices are bound to rise in leaps and bounds again just like the 90's, but, with the heavy p/e ratios, (if there are any e's at all), the growing distrust of wall street, the 'name brand' bankruptcies starting to roll in, i think we are looking at a time when PRICE/EARNINGS ratios retreat back to SINGLE DIGITS...after all, RISK is more than a board game and people will want to be compensated for it...
when i first started following the market, it seemed that newbies here in Canada would get involved this way :
1) they'd get a hot tip on a penny stock (usually mining)
2) they'd lose their $ or most of it
3) they'd think the game is manipulated and quit
now, Ma and Pa Kettle are losing money on the PHONE COMPANY...you think Ma and Pa Kettle are gonna hang around or quit in disgust ?
remember the old expression, sell to WHOM ? |
