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Strategies & Market Trends : Heinz Blasnik- Views You Can Use -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (4067)	1/8/2004 7:24:13 PM
From: orkrious	Read Replies (2) \| Respond to of 4912

Date: Thu Jan 08 2004 16:59 trotsky (face it...) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved the consumer is finally tapped out...no more buying stuff they don't need with money they don't have. the last refinancing orgy has put in the blow-off top in the mortgage credit bubble, and for the US consumer it's downhill from here. the rise in energy costs will crimp spending power considerably, and wages have actually declined this year in nominal terms ( for the first time in ages ) . no-one in the mainstream believes it can happen - but it can, and will. the ugly part of the recession where housing and the consumer get bombed is straight ahead imo, and as noted in a recent contrary-investor piece, capex spending booms occur in 10-year cycles, so there will be no help from that quarter. think the stock market can't go down in an election year? that's what everybody seems to believe, so i'm very suspicious of this consensus as well. also, note that there are NO bond bulls anywhere. Rydex bond ratio in the clouds at 21, and a recent JPM survey found 59% of traders short and 41% neutral, as in NO bulls at all. credit spreads are at their lowest point in decades - a sign of the overconfidence that always reigns at tops. note that the market lows were made with spreads at or close to all time highs, and VIX readings in the 50 region. the VXO ( successor measure for the VIX ) now sits at 14.7 which i blieve is the lowest since the early 90's. credit default derivatives trade at throw-away levels...15bps. for BAC debt for instance. all of this is crying out for punishment.