Tuesday, August 14, 2007

Good Morning World

Good Lord, everywhere I turn there is a national media outlet doing stories on the sub-prime mortgage and credit crunch. When I start to hear National Public Radio, the Glenn Beck show, and the early morning T.V. news stations airing bits which are ultimately more complicated than their average viewer can comprehend, I begin to wonder, is this a bottom? Or is something much worse in store for us?

I still think there is more downside left. I feel this way because of all the media attention. Likely, Joe Chucklehead is beginning to catch-on that something is happening (but you don't know what it is. Do you, Mr. Jones?). I think that the public, whether they are retail investors or mutual fund owning 401Kers, need to panic a bit, and do some capitulating.

Also, everyone is waiting for the other shoe to drop. Who is willing to go 100% long until we see some honest reporting from the major financial institutions? Personally, seeing a major bankruptcy / blow-up will make me start wanting to put more money to work. Bottom line: investors need to see the worst-case scenario. Once our greatest fears are realized, then we can move forward.

4 comments:

Dogwood said...

Have Time, Newsweek and USN&WR had the subprime problem on their covers in the same week yet? When that happens, then the bottom will be in.

Brent said...

Fly's "Golden Bull" about to be cremated.

Woodshedder said...

I just got off the phone with the guy that manages my retirement dough. Yeah, that's right. Its mainly indexed, before you go busting on me. However, 10% of it is in bonds, and I dumped the bonds and went 10% cash. Really, that part of our conversation is immaterial. What is important is that he is getting very very few calls from clients pulling money out, rebalancing, or going to cash. I think this is a bad sign. I would rather see a sense of panic from the public.

I still can't figure out why everyone is trying to trade this market. There is no rhyme or reason to it, unless it is financials, and then it is just down.

TraderCaddy said...

WS-IMO the public has never really participated in this market (other than with a 401k) and the rally since 2003 has been driven by institutions, hedge funds, LBOs, etc. I don't think the public has come back in since the 2000 bust.