I'm Sorry--I Underestimated The Stupidity Of Mankind``
Two things are infinite: the universe and human stupidity; and I'm not sure about the universe.--Albert Einstein
I sit here dumbfounded.I cannot believe we are within 3S&P points of a new yearly high. The economy has been utterly collapsing since January, earnings have dissappeared into the mists, and yet people keep buying. Today, we have the ultimate in bad news--a century-old American institution is bankrupt; no second chances, no "one last bailout" and more importantly--no shot for suppliers to get paid. Dozens of GM suppliers large and small will go bust, already some like Metaldyne have folded. Hundreds of thousands of auto related jobs will soon be lost as dealerships continue to shutter, steel mills cease and suppliers vanish.
If that wasn't bad enough, the mortgage market is again collapsing this morning as the bond market has nary a bid. The Chinese are asking Uncle Benny for the "arithmetic" of how buying our crappy bonds will not be a disaster for them. As the Fed is incapable of even basic math, the Chinese will be disappointed and the selling of our bonds will continue. As I've explained, lower bond prices equals higher yields equals more foreclosures equals falling housing market equals worsening economy and man--you really don't want to look at a chart of MBS today--the mortgage-back securities are taking a beat down.
I could go on--California having to shut down 80% of their parks because their tax base has collapsed but why bother? Morons will keep buying again like its 1999. The fact that GM which is CLEARLY AND UTTERLY BANKRUPT BEYOND ANY SHADOW OF A DOUBT still trades at 50 cents is a testament to people's abject stupidity. Why oh why oh why are you paying 50 cents for something that is INARGUABLY WORTH ZERO?
The good news is that the madness will end soon. The bulls have to overcome 943, 1000 and then a whole range of resistance points just over 1,000. To get there, they have to ignore the collapsing bond market. The government has to sell new long-duration bonds this week. Ho ho ho, good luck with that Benny. People are also going to turn bearish when their mortgage applications start getting denied. As Mr. Mortgage said, even at 5.5% rates on 30-year bonds, the ever-so-slightly recovering housing market will again dry up.
Whatever. I don't honestly care. I got stopped out of most of my positions so I will see no further pain if we keep rising. In fact, my long positions in JAG and NXG are doing quite well as the unjustified fears of inflation return. It just makes me sad that so many amateurs are going to get their heads handed to them when the stock market plunges another 40% from these levels.
I invite people with a rational response to reply in the comments. I expect this to get flooded by trolls who have the time horizon of my ADD cat but whatever, I'm ignoring you trolls and I ask all you reading this with an IQ over 75 to ignore them too.
Enjoy the delusional bubble and sell some stocks before they plunge.