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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: MulhollandDrive who wrote (265102)	7/30/2010 8:51:44 AM
From: TH	Read Replies (2) \| Respond to of 306849

MD, It's just plain ugly. It will still take a while for the bulls to really understand the systemic shift in this "recovery". Most of the idiots bulls (and it seems there is an endless supply on CNBS) have been sticking to their story that this one was a just a particular deep cyclic recession, yada yada. As this thread knows, that is not accurate. I expect the dollar sellers to do their thing, but I bet they fail to get any equity bump and perhaps will fail (the Ten will tell us the truth anyway). And the drum for QE2 will start beating loudly. There are two major problems with QE2 and equities. First, pumping more into the system may not return anywhere near a "positive" return for earnings as the constraint is more a demand problem. Sure QE2 will smack the clownbuck (potentially, as it depends on the true level of deflation and if the dollar still gets the flight to safety play) and that will help export based earnings (which is why I'm shorting the RUT, as exports are not as significant a factor as the big caps). Second, as Les indicated yesterday with his comment on senior spending, more QE won't do anything for wages and that feeds back into the first point. Bullard is actually not an idiot. He is still a believer in a policy that won't work and only result in a can kicked a little bit further down the road. And, when J6P revolts, we are still going to hang him with all the rest of the corrupt and criminal Fed Heads <g> Today could be very interesting. Bulls are going to have to have to face up to a bit of reality and at such a critical juncture from a TA perspective. I will probably increase my shorts on any bounce. GT TH