Thursday, August 06, 2009

SUBJECT " BUY AND HOLD THE NIKK"


Deflation can be a nasty beast, zombie banks are one of the reasons deflation came and never left. Initially caused by a historic REAL ESTATE BUBBLE IN JAPAN and subsequent POP!
Does that sound familiar? Did buy and hold work in Japan? 40K the high 20 years ago, now 10K.
This sad pattern has repeated, with each new lower high sent to a new lower low for 20 years now THAT'S a SECULAR TREND.
One difference, Japan is a nation of savers, we are not.
Is this what WE are destined for? Are we in a SECULAR BEAR trend now? Isn't our market LOWER than almost 10 years ago?
Did we clean up our banking system? Did they acknowledge their losses? MY answer is NO! That was too painful, instead we PROPPED them up, gave them $trillions and changed accounting rules to HIDE THEIR CONTINUED LOSSES. IMHO SPX earnings with financials a huge part, with BOGUS accounting standards throws a shadow of doubt on reported earnngs.
If large institutions cannot make decent return on bonds, SPX dividend yield BELOW 3%, if banks arent loaning money like before, only a few companies going public, well these fancy dudes had to make it up somewhere.
IF GS was so strong, WHY did they change their business model? why did they accept TARP funds? ARE they going to the FED, taking money at 0% and buying S and P futures running the market up? DIDNT GS report 80% of their $10B in earnings were from "trading profits"
WHY does every politician use the word "CHANGE" to get elected?
D

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