The new economy pillar, Cash For Clunkers is the funniest economy- wrecking- scheme of all the new economy- wrecking- schemes!Cash for Clunkers!! Just saying it makes me smile.
The Market, the S&P 500, meaning the biggest, bluest of blue chip American companies index is trading at a 700 earnings multiple.
The last time we had a multiple like this was dot.com mania Nasdaq 2000.
That ended well, I recall.
Speaking of bubbles, remember the new metrics being thrown around then, like "eyeballs" or "price to sales" ratio which eliminated the need for those companies to actually make money.
Same now, you'll hear the mainstream crazies talk about next year's "operating earnings" which equals projected earnings if we do not count all the bad stuff.
The good news is if you played ostrich-style financial management for the past 2 years and are just now able to look at your statements, you have the opportunity to extricate yourself from all US stocks at great prices.
It's conventional wisdom that the market is brutal and unfair.
That's not what I've seen however. At each pre-crash period, you had ample time to sell and get out if you were paying attention.
Subprime was in the news in 2006, you had over a year to figure out it was not "contained" per Ben Bernanke, before the first leg down, if you were curious.
Bear Stearns went down in March of 08, giving you 6 months to figure out every other investment bank was just like them, before the October crash, if you were curious.
The market gave you another shot to get out the first days of January this year, rallying because January means new beginnings!!
And here we are, August of 2009, S&P at 1000. Nothing fundamental has changed except trillions in taxpayer liability, even though the bad assets are still on the banks books, now marked to fantasy via new accounting rules.
Insiders are selling at a record clip, yet the same prognosticators who were bullish all the way down have declared victory over the Recession.
Hmmm... At the current job loss rate, everyone will be unemployed by 2011.
And our consumer credit economy is 70% dependent on us buying stupid shit we don't need.
But if you don't have a job, you can't get that bad-ass $2000 limit 18% APY Capital One card, so how the fuck we gonna borrow our way out of this debt mutha-fucking black-hole, bitch!
Hallelujah!!
Oh yes, the dollar continues it's collapse which temporarily props up all asset prices, so when you sell your US stocks, do not sit in US dollars. Buy gold, or sit in other currencies, or high yielding foreign shares.
Stay long US equities and the next leg down will wipe you out.
That's all. Enjoy your day.
