jason2713 (< 20)

It's madness I tell you, MADNESS!!!!

August 21, 2009 – Comments (1)

Popping my blog cherry with the first of what I hope is a long line of them to come in the future.

So I think this market has really gotten WAAAAY ahead of itself based on a lot of pretty phony data, that if you had half a brain, you could see through the smoke screen and get to the real picture.

 1) Unemployment rose this week "unexpectedly."  Really??  I forsee this continuing to rise each month, or at least stay very elavated.  Reason being, companies just trimmed their labor force to levels where they can sustain their business.  Many haven't finished their cutting, and states like Cali and Florida will have massive lay offs due to the gov't being out of money.  None of this is unexpected.  Which leads me to my next point.

2) Earnings keep coming out all gravy, doesn't that mean the economy is better???  Sweet, let me pour my money into the market!  Wrong!  With the trimming described in point#1, their bottom lines are looking much better than they actually are, and in some cases, they are STILL losing money after laying off much of their labor force.  

3) Housing hit record sales last month, everything is rebounding, we hit a bottom in the real estate market, right?!!??  Pour our money in the market, the recovery is under way!!!  WRONG AGAIN!  Didn't we just hear that foreclosures are at record paces in the last few months and I forsee this continuing.  Reason being...NO ONE HAS JOBS!  More foreclosures means banks have tons of bad entries in the books (which will lead into my next point).  It also means that the real estate values will continue to decline cutting even more into people's personal wealth.  Whoever has a home now better brace for at least another 10% drop in the value of your home.  If you're considering buying a home, unless you find your dream house, better rent, it's still the best option.  Don't even get me started on the comercial real estate crisis.  Less malls = less value for your home.

4) Banks are cooking their books beyond recognition.  There is no way we have record foreclosures and their still making tons of money without moving a number or 8 in their accounting.  Plus, you have to be SQUEEKY clean credit wise to get a loan for another home, or pay cash ->  which isn't realistic with all these people with the foreclosure scar on their credit scores.  When are they going to be able to purchase another home?  Not anytime soon, that's for sure.

5) Credit card defaults, car loan defaults.  I don't need to get into this, its pretty self explanitory.  Without jobs, you can't pay your credit cards or cars.  

6) Govt spending is out of control, we will not see the affects of this until next year, is that when the bubble they are creating now bursts?

China is reporting growth, which I highly doubt..considering they believe when a product is made and shipped to the retailer, that's a sale and count it as such.  Their exports are down 22% and their power consumption keeps going down (that you can't fake or cook books on, its a hard number).
Article on this:

http://dailyreckoning.com/what-chinese-depression/

So what say you FOOLS out there to my points?? This is why I've shorted the market.  I was lucky enough to ride the market from March until now...I cashed my chips in and now I'm shorting, waiting for the next huge dip.  I think there will be at least a 10-20% dip to come here shortly.   Unfortunately , as my dad says, the market will stay irrational longer than you expect...so brace yourself.  The bigger this bubble keeps going, the harder its going to fall.

Can't wait to hear your comments :)