EScroogeJr (< 20)

Another gloomy day

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?