天下縱橫
隨筆而已。不必當真。
正文
Successful investing requires the ability of seeing the long term trend.
When one can not see clearly the trend, the likely scenario is he will hold wrong asset class at wrong time.
I am neither a bull or bear. Bull or bear is relative. It often is bull in some countries in some sectors while bear is in other countries and other sectors.
So where are we now? The market is turbulent. The turbulance reflect the counter trends that fight each other. At one hand, we have RE and Financial going down the tube. In the other hand, we have Fed Reserver Bank trying its best to fight for the crisis with ever increasing liquidity. But liquidity itself can not save the the crisis, it just put a bandage around the wound.
US banking industry has structural problem. Leverage, is causing an entire banking industry marching on the bankruptcy direction. Can Fed Reserve save the banking industry? Well, it needs to address the core problem. The core problem today is their holdings - mortgage bond holdings and derivatives around it. Fed needs to address the housing crisis. But how? So here we have bills in the congress to be passed so governemnt can buy out the foreclosure homes.
If this bill passes, the banking industries maybe saved, with the consequences of transfer the bad debts to tax payers. We will see high inflation, high income taxes down the road.
If this bill still can not save the housing, we will see wide scale of crisis in the bond market and then stock market. Even if FED cut rate to zero, it may not be able to save the street.
God bless America. For this time around next year, we will think back that we had a such wonderful time in 2008.
The blind people in the stock market today will regret not to get out in 2008, for from now on, any rally is the time to sell and sit tight.
Save big, spend less, payoff the debts, and work hard, those may very well be the strategies to stay above the water.
When one can not see clearly the trend, the likely scenario is he will hold wrong asset class at wrong time.
I am neither a bull or bear. Bull or bear is relative. It often is bull in some countries in some sectors while bear is in other countries and other sectors.
So where are we now? The market is turbulent. The turbulance reflect the counter trends that fight each other. At one hand, we have RE and Financial going down the tube. In the other hand, we have Fed Reserver Bank trying its best to fight for the crisis with ever increasing liquidity. But liquidity itself can not save the the crisis, it just put a bandage around the wound.
US banking industry has structural problem. Leverage, is causing an entire banking industry marching on the bankruptcy direction. Can Fed Reserve save the banking industry? Well, it needs to address the core problem. The core problem today is their holdings - mortgage bond holdings and derivatives around it. Fed needs to address the housing crisis. But how? So here we have bills in the congress to be passed so governemnt can buy out the foreclosure homes.
If this bill passes, the banking industries maybe saved, with the consequences of transfer the bad debts to tax payers. We will see high inflation, high income taxes down the road.
If this bill still can not save the housing, we will see wide scale of crisis in the bond market and then stock market. Even if FED cut rate to zero, it may not be able to save the street.
God bless America. For this time around next year, we will think back that we had a such wonderful time in 2008.
The blind people in the stock market today will regret not to get out in 2008, for from now on, any rally is the time to sell and sit tight.
Save big, spend less, payoff the debts, and work hard, those may very well be the strategies to stay above the water.
評論
egghead1
2008-04-12 18:23:29
回複
悄悄話
thanks for your thoughts. I wholeheartedly agree with your last paragraph. I was stupidly optimistic about the economy two months ago because I was too young to have experienced real hardship in the economy. After reading some commentaries and seeing recent economic data, now I think it is going to be really bad. Even if the economy is not terrible, the stock market will perform very badly. I wouldn't be surprised if S&P goes to 1100. Hopefully it's not too late for me to realize the danger.
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