Am I too hairy and need my claws trimmed?
I think perhaps just a little off the ends. <g>
I agree that all of the factors you listed are at least worrisome, and if they all were to hit, full-force, at once, we'd be in deep doo-doo, (as Bush Sr. allegedly says), but I just don't see it happening in that way.
On the other hand, the S&P 500 is still at what, three to five times its historical PE? "The bubble," IMHO, is still with us, and will need to be corrected out of all the markets. But, I think this will happen over time -- two, three, maybe as long as five years.
During that time I think that the markets will go up and down and up and down, but without really going anywhere. Instead, I think the indexes will swing back and forth through broad ranges -- say 1000 to 3000 on the NAZ and 7000 to 12000 on the DOW -- ending up about where we started. During that time, the cumulative effects of growth will deflate the bubble(s).
Not that it will be gentle or pretty -- far from it.
I think we'll see a series of phony "recoveries" based on B.S. interpretations of dubious economic data. Then, when enough of the shorts are sucked into the "new bull," (or at least "sustainable rally"), the Boyz will "discover" something really nasty which will bring it all back down again.
To see what I'm talking about, just consider this last quarter. How long has it been now since "they" announced that everything was rosy because we hadn't really even had a recession, and corporate earnings expectations were now so low that nobody could possibly miss, etc. A few weeks at most, right?
Then what happened? "They" figured out that pro-forma earnings are B.S.? He!!, I can remember Mish bellowing about that crappola on the FOOL back when the NAZ was still above 4000! And the big boys just figured it out?
What else happened? Oops! Looks like those "can't miss" earnings numbers can be missed after all! Gee, how could that happen? Could it have something to do with the fact that the corporate world overspent on capital improvements, buyouts, takeovers, acquisitions, etc., etc., etc., manyfold over the past few years?
In short, all of the potential horrors you mention -- and many more neither of us have contemplated -- are in the BOYZ's tool box, waiting to be pulled out at the right, i.e., most profitable for the BOYZ, moment.
But, with all that said, two facts keep me from worrying too much.
First, the BOYZ won't let things run too far, too fast, because that is untidy, and untidiness tends to confuse their A.I. buy-sell programs. (Bad for the bottom line, don't you know.)
Second, whichever way the markets go, there will be a trend -- a "channel" if you will -- and good old HAL will keep us updated on which way it is pointing.
augieboo
Disclaimers: All of the above is based on rank speculation and cynicism. Your mileage may vary. Do your own TA and DD. Drinking too much soda may make you fat and rot your teeth. The surgeon general has determined that cigarette smoking will most likely kill you one day, and, in the mean time, it will make you a social pariah if you live west of the Rockies. |
