These markets look really sick, and I think the bad news is not over yet... the stimulus package may rally these markets, but I suspect these rallies will eventually fail... my best guess is that we're going to see another massive wave of selling...
The stimulus package is not going to bring the end of a bear market and the start of a new bull market, I think the banking problem is far more serious than putting a few bucks into their pockets... I suspect the problem is bigger than that, the world is entering a completely new phase of economics and a change in the culture of how we live in that economy, a change from a life of borrowing and spending to saving and waiting... banks are not going to lend so easily anymore... luxury items such as recreational boats and yachts will have to be paid for in cash, banks will likely be fearful of lending for frivolous luxury items for many years, I expect to hear about Las Vegas hotel and casino and failures before this year is over... in other words, I doubt we'll see the "business as usual" return so quickly... and this is a worldwide phenomenon and much bigger than governments can manipulate or control...
What we're now witnessing is a global phenomenon that happens only once in a hundred years and much bigger than any ordinary recession, we're now witnessing is a mistrust of government and massive deleveraging worldwide, an unwinding of leveraged international relationships... I doubt the government wants us to realize this, so they attempt to give us all kinds of reassurances with more spending packages, although I always thought it was spending that got us into this mess in the first place...
Stay short or flat... today, flat is the new long...
GZ |
