The Strength In The Market Has Been Surprising

April 25, 2008 10:10 PM

I have mentioned that i am normally skeptical of any highs or lows that do not have firm reversals, so it doesn’t completely surprise me that we are pushing higher as no reversal has been made recently. With that said, the market is completely ignoring reality - the economy is going to get worse. I think people are hoping the $600 checks being mailed out will solve consumer problems, it won’t. The reality is that AT BEST it will simply stall them for maybe 2 months. Do not argue with the market, but understand that these moves higher are most likely not warranted by any sense of economic reality. Consumer spending is going lower, probably much lower, because they cannot service existing debt levels. That will not change with a $600 check when the average US consumer has a $10,000 credit card balance that most cannot pay. Not to be redundant, but this is a fundamental problem, NOT a cyclical one, as in the past downturns.

Here are the facts:

Consumer confidence plunging

Housing numbers are at record low

Consumer debt levels at all time highs

Home values are going lower

Inflation is grossly understated and is having a big effect on discretionary spending

Real wages have not budged in 10 years and are going negative

All, of this is NOT good and will not change anytime soon.

So, take what you can, when you can….Jack be Nimble, Jack be Quick…. on the trigger…is still my motto here.

Written by Tom@StockBlade.com · Filed Under Current Market View

Comments

One Response to “The Strength In The Market Has Been Surprising”

Bear Market Plunge: StockBlade Timeline Of Views For 2008 | on October 28th, 2008 12:16 am

[…] 25th: “Market Strength Surprising”. Post is about the fact that the $600 rebate checks will do nothing and the market was ignoring the […]

Got something to say?