Everything you wrote makes sense, which is why the wise should be cashing out their gains, slowly but steadily. Slowly, because illogical as it may be, the market stil appears to be mandering higher, and steadily because stocks are quite overpriced for the current and forseeable economic environment.
Millions of retiring baby boomers are upset and may vote for change if their portfolios and retirement plans don't rebound. Thus, propping up the market until the next generation acquires the retiring boomers toxic financial assets may be perceived as sound public policy, and concerns have been voiced that the market is being manipulated, as in "We'll give you billions of taxpayers' money and y'all make sure the market goes up". This argues against shorting, and for taking any profits slowly, as the next big drop may be a long time coming. On the other hand, if and when it comes, it is likely to be like a bursting dam.
These are challenging times for any rational long-term investor.
I am still not convinced that the fed will be able to reflate the asset bubble to anything near its former size. The collateral damage of increased consumer inflation will be hard to control, and it will be very difficult to inflate incomes in tandem with consumer prices.
The misguided bubble policies since the mid 90's have caused the ratio (incomes/assets) to become too low, and this needs to correcet through income inflation, asset deflation, or a combination.
With the consumer satiated, overcapacity in many sectors of the conomy, and globalisation, income inflation at any significant rate is unlikely.
The market responded by attempting asset deflation, but the fed is thwarting it.
Thus, the economy will remain mired, with asset prices disproportionately high compared to the wages of productive labor, killing the upward mobility that has always been a part of American psyche.
The crisis is by no means over, as the fed has just kicked the can a little farther down the road, with the fundamental imbalances not only still present, but exacerbated.
The Cult of Peter Schiff - Is It Deserved? [View article]
Many members of the investing public have, over the years, been subjected to a continuous "buy" recommendations by the mainstream media sources. This is not surprising, because the media earns advertising dollars from the financial services community, and the latter make higher profits as the markets go up, since many charge a percentage of a portfolio's value each year.
This inherent bias, even conflict of interest, by the mainstream media has contributed to the stock bubbles of the late 90's and 2006/2007. Many innocent people were sucked in and lost much of their savings.
The public needs to hear all points of view, and the way Peter Schiff was being ridiculed in 2006/2007 on mainstream TV was apalling. I don't personally agree with all of Peter Schiff's bearish views, but the investing public need to hear all points of view to be able to reach their own conclusions.
Why the Dow Is Headed to 6000 [View article]
Millions of retiring baby boomers are upset and may vote for change if their portfolios and retirement plans don't rebound. Thus, propping up the market until the next generation acquires the retiring boomers toxic financial assets may be perceived as sound public policy, and concerns have been voiced that the market is being manipulated, as in "We'll give you billions of taxpayers' money and y'all make sure the market goes up". This argues against shorting, and for taking any profits slowly, as the next big drop may be a long time coming. On the other hand, if and when it comes, it is likely to be like a bursting dam.
These are challenging times for any rational long-term investor.
Thursday Outlook: Another Bubble? [View article]
The misguided bubble policies since the mid 90's have caused the ratio (incomes/assets) to become too low, and this needs to correcet through income inflation, asset deflation, or a combination.
With the consumer satiated, overcapacity in many sectors of the conomy, and globalisation, income inflation at any significant rate is unlikely.
The market responded by attempting asset deflation, but the fed is thwarting it.
Thus, the economy will remain mired, with asset prices disproportionately high compared to the wages of productive labor, killing the upward mobility that has always been a part of American psyche.
The crisis is by no means over, as the fed has just kicked the can a little farther down the road, with the fundamental imbalances not only still present, but exacerbated.
The Cult of Peter Schiff - Is It Deserved? [View article]
This inherent bias, even conflict of interest, by the mainstream media has contributed to the stock bubbles of the late 90's and 2006/2007. Many innocent people were sucked in and lost much of their savings.
The public needs to hear all points of view, and the way Peter Schiff was being ridiculed in 2006/2007 on mainstream TV was apalling. I don't personally agree with all of Peter Schiff's bearish views, but the investing public need to hear all points of view to be able to reach their own conclusions.