In the next few months, the flow of macroeconomic and earnings news will be much worse than expected. The credit crunch will get worse, with deleveraging continuing as hedge funds and other leveraged players are forced to sell assets into illiquid and distressed markets, leading to further cascading falls in prices, other insolvent financial institutions going bust and a few emerging market economies entering a full-blown financial crisis.
also...
With governments and central banks bringing private sector losses on to their balance sheets, fiscal deficits will top $1,000bn for the US in the next two years. The Fed and the Treasury are taking a massive amount of credit risk, endangering the long-term solvency of the US government.
Full article here.
Also if you're in the mood to surf, check out Why Is Roubini's 401k All in Stocks?
Tuna Melt (who gives all the disclaimers about taking investment advise from Internet blowhards) also likes stocks as a long-term place to park one's butt. Treasuries and cash are instruments of government. Right now government is the only player whose stability seems a sure bet (after all, they get their revenue whether people want to pay it or not). But load a couple trillion in debt onto the government's balance sheet, and private companies starts to look much more stable in comparison.
1 comment:
So - does the market finally reach bottom when the average Joe gives up and then pulls his money out of stocks? We've all been trained by our financial advisors to not sell and just wait it out. It now seems like we will be waiting for a lot longer than anyone originally expected.
on another note -
If the best advice is to "not do what everyone else does with their money" - then maybe we should be day trading... Seems like I could make some fast money with all the market fluctuations.. (but I'm too chicken)
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