Thursday, May 19, 2011


CS topped in 2000 and again in 2007, importantly though it made a lower high....even as stocks edged to NEW ALL TIME HIGHS, Consumer Sentiment did not even come close...and now with stocks soaring in one of the most dramatic rallies in 100 years......CS is not even close to the lowest levels after 911 !!

This suggests the 2009 rally is NOT a new secular bull market but a reaction to the extreme pessimism in 2009 and historic govt and FED intervention......which has propped up the markets, but it is a false dawn.

You don't cure a debt hangover by adding more debt and hiding the bad older debt by use of fraud (GAO accounting change).

SO sure this folly can last a bit longer, IMHO one should be making preperations for what will happen when this bull runs out of steam...and it will.

Because of LAX, LOOSE FED interest rate policies after 911, rates were held down at 1% TOO LONG....wild speculation followed, then housing CRASH....home values are STILL FALLING even if at slower rate. From 2003- 2007 many homes DOUBLED or TRIPLED in value!.....some including my nephew ( I SAID TO WAIT!!!) think because of current price correction NOW IS TIME TO BUY!......bubbles tend to retrace most of the gains.....housing most likely has not bottomed.....and all this occuring with near record LOW mortgage rates....


No comments: