Saturday, August 8, 2009

When the Bears become Bulls, Give It Up, It's Only Up from Here in the Intermediate Term

If you don't understand this post, then no offense, but I will be enjoying the money from those who bet wrong. I called the top a few weeks back and there have been minor gains, but that's it.

The credit market is almost 400% of GDP

Household debt is 130% of disposable personal income.

The savings rate is rocketing up, although income is going down.

Government consumption is going up a bit, and private consumption is going down quick.

Capacity utilization is at 68%, the lowest since 1970.

Household net worth has the longest string of losses since 1950.

Comments appreciated.


  1. Its a bullish and bearish comment. So I guess he's right. LOL

  2. This situation with all the "fair weather bulls" (myself included) reminds me of some thoughts I had on the houseing market back in 2005. I told my friends - this (housing) market doesn't need a shock or correction in order to crash. All it needs is for prices to stop rising so fast. Because the speculators can't carry the costs and are so leveraged and marginal that as soon as they can't turn 50=% profit in 3 to 6 months they'll dump their inventory and that's all it will take to start the chain reaction.

    Although mutual funds are starting to feel a need to chase returns and outperform indexes (as detailed in pension pulse). After having been burned so badly they'll be careful to turn around quickly this time. Only other thing that looks bullish is that we don't have as many hedge funds in highly levered, illiquid, exotic arbitrage strategies.


Insightful and Useful Comment!