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Originally Posted by mmerlinn
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It isn't about you being right or wrong, anybody can see that things are going to get worse before they get better, that is the nature of a recession.
The problem with your predictions is that you take an extreme pessimistic view to everything (IMO) and that leaves you open to a lot of problems, the closer we get to the bottom.
Like it or not, the world isn't going to come to an end or turn into a Weimer Republic, the Politicians have a lot of tools at their disposal to keep that from happening, even if what they do is totally illusionary...
In my view, the Market is a bunch of BS anyways and governed more by the overall cycle Positive and Negative emotions than any underlying market fundamentals. If the Market Fundamentals actually mattered, the DOW never would have broken 8000 or 9000 in the first place and our market booms and busts would be much rarer.
It is clear most of the traders on Wall Street watch CNN, FOX, MSNBC and a few other sites for their "news" and react on that, not on any fundamentals, thus they are pulled by the nose by positive and negative emotion, not balance sheets.
Oil is a prime example of this. It shot up to $150 this summer due to speculation only and it is going down to negative speculation. OPEC wants to bump their price right now, but we are in a negative cycle. For them to get the price up, they need to do such a cut that it shocks the negative downward spiral into an upward spiral. Good luck with that. They cant stomach a cut of 10mbpd either.
I do believe that once the Election is over, a lot of negativity that is out there will finally come to an end because you wont have the two Parties telling people "VOTE FOR ME OR THE WORLD WILL END!". At that point, things will become slightly more "stable", as that political factor will be removed.
So do I think that we are in for Happy Days in 6 months? Nope.
I think that we are headed for 2-3 rough years and the DOW will go down further and probably bottom out in the 5000-6000 range.
However, history has shown in the past that the greatest amount of fear always happens as the DOW nears its bottom, just like the greatest amount of hype always happens as the DOW nears its top.
I am also a big believer in self preservation. The idiots on Wall Street, Main Street and 1600 Pennsylvania Ave will work out something, even if its illusionary because at the end of the day, that is all our current system is:
A series of crisis and calm periods.