The global slump of 2008-09 has begun as poison spreads - Telegraph
The above article is incredibly gloomy but it brings up a couple of points that are worth considering regardless of whether the outcome is as dire as posited in the article.
By now you know that Vallejo, CA filed for chapter 9 bankruptcy but what I did not know is that Half Moon Bay (a very neat little town) is facing the same path and it seems as though there will be others.
The article also mentions several recent corporate bond defaults that while small could be canaries.
These things are all reasons to be concerned and while the magnitude may be within the realm of normal (my opinion) or not it seems very difficult to believe that the lift in stocks in anything but a feel good rally and it seems difficult to believe we will avoid a recession of some sort.
Wikinvest Wire
8 comments:
Boy that was a cheery read!
My guess is we've seen (or are near to) the top of this feel-good rally. Sentiment has now ebbed back somewhere between neutral and over-optimism, typically where you see intermediate peaks in bear markets.
My timing model fell again last week.
how can it be ending? it feels so good, lol.
Looks like things are going from the sub prime to the ridiculous, but the author's always one for sensationalist articles. Predicting a global slump because of a high oil price and housing problems in the US is pushing the boundaries of logic a bit. The recent boom has taken hundreds of millions of the global population out of poverty.
you write often about watching the 200 day ma for the overall mood of the markets. do you always get defensive when the index drops below the ma? or do you apply some other metrics (ie. closes below the ma for a certain amounts of days, certain percentage).
seems like a quick dip below the ma would cause some fakeouts over the years. just curious on your approach
Could this 'feel good rally' be controlled? Maybe.....
http://tinyurl.com/3kpq9l
my short positions are hurting... very itching to close them... which means the rally is just about over.
Roger,
How much of this article do you believe? An article with this much doom and gloom calls for more than a defensive Portfolio. this paints an end of times of the US and world economy as we know it to be.
BWJR
i think i touch on this all the time. i agree directionally but not with the magnitude of consequence
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