It’s not bad news, It’s the market. Play it. (It’s Global now by the way)
Hey, I hear you. The key is to buy low and sell high, right? Where do you think we are right now, high or low? I would argue that we are going through some pretty extreme market conditions right now, so now’s the time for those with some liquidity to make some money. If you think the American economy still has a long way to fall, stay in your current positions. However, this mortgage mess won’t last forever. Most of the hits have been taken by the big banks this quarter, and they’re all still standing. One quarter of bad earnings may spook the stock market, but it doesn’t tell anyone else much about where the economy’s heading.
The market’s are driven by fear, and what we are seeing is the market reacting to all the bad mortgage news here in the US. But is the underlying strength of the US economy relative to Europe’s really in question? Does anyone really believe that Europe’s huge entitlement obligations and lame work ethic will lead to sustained currency strength? If you believe that, I guess you believe should be racing towards socialism. For all the problems here in the US (and I’m not saying we don’t have them), we at least still have high productivity and a relatively free economy. I believe that is what will win out in the end.