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EScroogeJr (< 20)

Another gloomy day

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4

May 01, 2008 – Comments (3)

I am feeling melancholy. The economic news is getting worse and worse. No hope for recession, no hope for $200 oil, no hope for 25% unemployment. And, most importantly, no hope for bank runs, and no hope for a major collapse of the financial system. Instead, we get 0.6% growth and a booming stock market. Even the housing market is showing a paltry 13% decline, a drop that is a) useless and b) happening everywhere except New York. And it won't be even that if you take actual sales prices instead of the exaggerated Case-Schiller numbers. Buyer stikes are not getting us anywhere, Bernanke is simply inflating away any problem encountered by homedebtors and their bankers. New money fresh off the printing press is flooding the stock exchange, competing with my hard-earned real dollars for the most lucrative assets. So things are bleak on both markets. It's not that I was caught off guard like some stupid permabear. I got myself fully invested, my portfolio is in the green, and theoretically, I should be feeling like a genius. But I feel sad. These returns are no match for the real benefits that come from a crash. Instead of scooping stocks priced at a PE of 3 and retiring rich, I have to buy them at PE of 15 and hope to sell them for a 20% gain. Instead of saving tens of thousands of dollars by watching extortionate prices of housing become slighly less extortionate (I am not even saying "fair", that would be asking too much), I have to content myself with earning a few hundred dollars here and a few hundred there. Why don't we ever have a nice great depression that would send S&P to 120 and send Wall Street executives collecting food stamps so that I could buy things at a price that makes sense?

3 Comments – Post Your Own

#1) On May 01, 2008 at 8:34 PM, nuf2bdangrus (< 20) wrote:

I couldn't agree with you more.  But I wish we would have a healthy shedding of fluff and wish the fed would get out of the way.  Rewarding risky behavior only creates more of it, and intertwines everybody, thus making our economy dependant on risky behavior, which then we must always "this time" bail out.  There is still an u healthy ocersupply of FIRE (finance, insurance, real estate) in our economy, which must be shed off.  Inflating the problem away is the lazy way.  But we are essentially lazy.  The problem is the increased chance of a black swan even, when too many people again indulge in risky behavior, and they will.

 

BTW, I took a position in SDS today, with a tight stop.  AM sitting mostly in cash. 

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#2) On May 01, 2008 at 9:00 PM, abitare (49.76) wrote:

Here is a good up video to share with the bulls!

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#3) On May 01, 2008 at 9:41 PM, RVAspeculator (29.57) wrote:

The econ news is getting worse and worse.   I am a permabear who went bullish after the Jan lows and now I am bearish again.  Citi from 19 to 27 pretty much says it all.  Overextended selloff lead to a bear market rally.  Bear market rally is coming to an end though....

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