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Technology Stocks : Semi Equipment Analysis
SOXX 346.30-4.1%Jan 30 4:00 PM EST

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To: Jacob Snyder who wrote (56698)6/26/2012 5:57:20 PM
From: Return to Sender1 Recommendation  Read Replies (1) of 95821
 
Also on recessions it is possible that they will become more frequent in the future. On average the economy has fallen into a recession every 4.5 to 5 years.

Recessions are a normal part of the economic cycle. Here is what WIKI has to say:

en.wikipedia.org

According to economists, since 1854, the U.S. has encountered 32 cycles of expansions and contractions, with an average of 17 months of contraction and 38 months of expansion. [5] However, since 1980 there have been only eight periods of negative economic growth over one fiscal quarter or more, [42] and four periods considered recessions:

Back to me commenting now. I'm certainly not Wikipedia! ;-)

Over the last 30 years recessions have happened less often but the bubbles that have been used to avoid them have been gigantic. Take into account the amount of stock market speculation that led to the top in 2000. That was a huge bubble. Nothing like it since 1928.

Then the housing bubble. Loans going to people who never should have been able to afford a home in the first place with balloon payments, people trying to flip houses like they were stocks in 1999, of course that could not end well.

Now we have a huge Federal deficit and artificially low interest rates with money being loaned to banks who have very little incentive to share it with consumers. If this tepid stock market advance cannot do any better with near 0% interest rates then how do we stimulate the economy?

This credit bubble will end badly. You can only push on the string, or kick the can along, for so long before people realize that it's just not working. Anyway, I hope we have a social security system and Medicare when I retire but I sure am not counting on it.

Still, the next time we get the VIX doing it's thing and more bears than bulls in the Investors Intelligence Poll I am 50% in the market asap. That's regardless of how much worse everyone says things are going to get at the time. Greed wins out in the end. An individual asset can appreciate forever giving a huge percentage gains. And the most you can lose is 100% of your investment by going long. Going short... look out!

RtS
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