No, a shallow recession into this Summer/Fall is priced in,
but things will get worse than that. We'll get a bad recession.
GM and C is not at levels where I'd short them, but not at
levels where I'd buy them either -g- Stocks are still cheap
relative to bonds, so I don't think a comparison to 2001 sharp
drop (that Jesse puts on his site) should be valid.
Stocks were way overpriced relative to T-bonds in 2000.
Nevertheless, a water torture drop as
earnings come down, and a sharper drop if long rates spike.
The tech beta darlings (AAPL, GOOG, BIDU, RIMM) have a long
way to fall. RIMM is a good short, some banks as well. -g-
JPM and C own the Fed, so despite their huge derivative
position, I don't think any of these banks is going BK,
that despite the gold bugs desire -ggg-
You can always compose a shopping list. The bear will end
some day, and usually it leaves plenty of buying
opportunities. I'd think this wave will end this Summer or
Fall.
I still wonder if there will be a major WS casualty, such
as BEAR, C or MER, or that stuff will not be allowed. In the
worst case scenario the banking system will be loaded with
bad debt and be insolvent for some time like in Japan, then
the bad stuff will last for years. |
