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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (4244)	12/31/2003 2:44:13 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

From Tod Harrison on MInyanville As we eye the new year, there remains a seemingly impervious bid to the market. The major indices have broken out anew, the structural forces (and electoral agendas) remain firmly in tact and the return of momentum investing has the (remaining) bears on the run. We've lived through one bubble and witnessed first hand how nutty things can get. With my newfound lessons in tow, I humbly respect the ability of this beast to feed on itself and fend off exhaustion until such time as she runs out of gas. When she does, I fear that the once salient lessons--the very lessons we promised ourselves we'd never forget--will come back to haunt us. Bubble me once, shame on you. Bubble me twice, shame on us all. The Fed, in my opinion, has been buying time (and who knows what else) in an effort to sustain a self-fulfilling recovery. The ramifications have already began to emerge as the continual printing of dollars has eroded the value of the once precious greenback. While most are assuming a normalized recovery cycle, it's myopic to believe that the biggest bubble in history is "three and out" (especially with everyone already on board the Hoofy express). I've yet to wrap my arms around whether it'll be cancer or a car crash but, taking a step back, all of the historical warning signs are there. Massive complacency, record insider selling, lofty (peakish) valuations, leveraged holders, a maze of debt and derivatives, a housing bubble (yes), rising commodity prices, increased global risk and an eerily familiar bravado from the bulls will all seem obvious with the benefit of hindsight. As long as the screens are green, however, chances are that investors will ignore the risk and chase rewards.