May 1st, 2009 by Alec

The Bear Market?

In the first quarter of 09 I visited and screened a number of brokerages, who all, despite overwhelming evidence to the contrary, predicted a market rebound by the 3rd quarter of 09. While I sat listening to, what I considered foolish pandering for a new client, I couldn’t help but wonder how the simple keynsian cycle could apply when such a steep decline as we have seen in the past few years was predicated on hard losses (such as housing market crash) as opposed to simple dissolusion of investment, as I had understood the theory to apply.

As we are now amidst an 8 week stock rally, and are seeing increases in commodities and etfs as well, I have to wonder if I was wrong about the cloud of depression I predicted two years ago. After contemplating this for a while, I realized I wasn’t. Depression is still on the horizon, but it’s being postponed by greed. People have stopped selling, and fix suggests that investor confidence has risesn because too many Americans can’t pass up the opportunity to play Russian roulette with the market when stocks are so cheap. I must admit, I’m guilty of this also!

America is still broken, let’s take a lesson from GM – we pumped 15b+ into their old ways of doing business, and they still couldn’t make their 1b interest payment- artifically inflating the market over precieved good deals doesn’t negate the serious infrastructure problems that MUST be fixed before a real upswing can happen.

– Post From My iPhone