Posted on 10/17/2009 9:08:06 AM PDT by SeekAndFind
The contrasts are too stark to ignore. Stocks are supercharging ahead, while home prices are stalled and likely to dip further. Emerging markets are eating the developed world's lunch. Asset prices in general are rising far above the economic reality that would rationally support them.
Main Street Americans are struggling to pay their bills, while Wall Street executives are getting record bonuses. Two Americas; trust me it's more than just a campaign slogan. It's the cold hard reality.
The dichotomy continues. Stocks, gold and oil all continue their amazing climb as the dollar descends to new lows. A smart move indeed would have been to heed the advice you read here in June that the real suckers were the ones in cash and that the Dow would retake 10,000 by the end of the year. (See "The Real Suckers Are In Cash.")
A glance at the chart below illustrates the degree to which U.S. and Japanese stocks are getting skunked by their emerging market cohorts. Russian stocks are up 136% this year, and Brazil is up 117%, far outpacing the meager gains here and in that sick dog of an economy, Japan.
China and India have been kind to investors of late. You can even earn 8.75% on Brazilian bonds while you've lost 16% to date this year holding dollars. That's the most important dynamic in global markets.
Look at the dichotomy another way. The FHA is handing out mortgages on the basis of a 3.5% down payment of the home's value. That's leverage approaching 30-to-1, the kind that brought down Bear Stearns and Lehman Brothers.
Meanwhile, 15 million people are competing for 2.5 million job openings. The amount of time people are looking for a job has hit a new record high.
(Excerpt) Read more at forbes.com ...
I’d like to sell a little stock...after the New Year...so hoping it holds on...
Lenzer is more optimistic than me.
Some of old geezers who have been through this before, refer to the current rally as “A Dead Cat Bounce”.
Hang on to your money and get out of personal debt.
Since our money is devaluing rapidly and most of us expect big inflation in the next couple years, wouldn’t it be wise to use some cash to buy now items we were planning to get in the future that will be more expensive in the next couple years?
ping to answer
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