Hi Show-me:
I haven't had a conversation with you in a long time. Miss all that daily trading we use to talk about.
I do too, hope you are well and enjoying life. My life has changed dramatically over the last few weeks. Eventually I hope things will settle and I can go back to the slow hum drum existence I enjoyed in the past, but it will take six months to a year. Until then I will continue to pop in and out.
Let me take this opportunity to get this off my chest.
I missed the run up, but I feel it is artificial and as history has shown we alway run up to the 200 dma before we retest the lows. I made major mistake last year and jumped in with that thinking and got spanked. The low was much lower that the 1000 or 1200 I thought it would be.
The rally is weak at best, we are rallying because the finacials did not completely fail in one failed swoop but they are slowly failing. The gov. once again rewarded the losers by bailing out the mega banks, but it does not end there. These lenders are not lending, they are hording cash getting ready for the next storm of defaults. They know it is coming. Yes I know profits are profits, but at what expense. Massive job and budget cuts can only go so far and you have to produce something to show next quarter profits. It is like throwing the excess off a sinking ship. It works for a while but after you run out of stuff to throw off the ship you have to fix the hole and bail out the water.
Credit card companies are cutting credit to existing customers, hiking rates and fee's to all and consumers are becoming savers whether by force or choice. I have received the letters in the mail saying that they are raising my rates to 25% plus prime. They can kiss my ass!
Just this week revolving credit debt fell by $21 plus billion, surprising economist because they expected a single digit number off set by cash for clunkers.
Prime mortgage defaults have exceeded sub prime default high and there are millions more defaults on the way according to the Treasury just this week.
Half a million folks fall off of the extended unemployment rolls and another 1.5 million fall off the first of the new year. I believe Congress will extend their benefits but they will become more savers and they are stretched to the limit now.
Cash for a car we don't need or can afford a payment and full insurance has turned into another give away to big business. Survey done on buyers rated the highest buyers remorse ever after they realized they went from a little or no debt on a car to BIG payment and FULL insurance. Rate is normally 6% to 8%, but on cash for clunkers it was 14%. Wait for the defaults on this program. Taxpayer made nothing on this program, but the auto industry cashed in by selling old inventory. Do you really think they will rebuild that inventory back up? NOT! They are just glad to get rid of the old model years.
Edmund.com reports that we did not need cash for clunkers and that the next quarter auto sale will equalize the massive quarter we just had. So what does that mean.......................it changed nothing! It just cost the taxpayer more money that we don't have. Most of the folks that bought a care were lying in wait for the "program", biding their time waiting for the best deal because they are in the drivers seat. Then along comes the free money and sucked all or the ligament buyer and a few reluctant soon to be remorsefully buyer out of the market prematurely. Now it will have to equalize.
Same thing is going on in the housing industry. The frugal folks are taking advantage of the cheap homes and interest rates and cashing in the the huge tax credit to buy a new home. Artificially propping up the market again, making it look better than it really is. Standby this too will correct or equalize itself.
What happens when the economy, two thirds consumer driven, has to stand on its own without taxpayer stimulus or give aways?
I've ran out of time and have not ever touch on the money supply.
. Working on a wrap around porch and fire wood stock sound like heaven to me!
What you made since the march lows some of the investors who are kind enough to allow me into their investing circles would make your jaw drop. Not bragging or trying to show you up but we are in a different investing environment so it sometimes benefits the investor to keep in mind that you are running that race against yourself which will keep things in perspective for you.
