Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: westpacific who wrote (67228)	8/6/2007 7:58:54 PM
From: ballsschweaty	Read Replies (5) of 116555

westy, the correction has now ended. I think we now rally to new all time highs in the spx and dow. We may see some non-confirmations in the small cap and mid cap indices. I see us rallying into early/mid September at the very least and perhaps all the way into year-end. I expect tech, financials and cyclicals to lead. Cash will get trashed as rates come down and inflation remains high. After tax real returns on t-bills will be negative and this will make cash a hot potato and trigger a massive stock rally. Lots of savers remember getting burned by 1% T-bills and not having the courage to move into stocks. Fool me once, shame on you..... This next declining rate cycle will be very powerful for stocks even if fundamental news weakens. Wealth effect from stocks, rate relief on mortgages keep the economy out of recession and a soft landing intact. Bernanke will be heralded as a genius for avoiding a crash landing. The whole thing will come crashing down in 2009 as the democrats take office.

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