ombow: You are right about the markets eventually reflecting the underlying fundamentals. Say I make $100,000 a year but I borrow an extra $60 K because interest rates are low and I want to spend more. So I spend the $160 K and for a while it makes me appear to be richer than I am. My future spending will have to be reduced to reflect the interest and principal I must eventually pay back on the borrowed funds or I default at some future date. But in the year of spending I sure look prosperous. That's where we are as a nation. We raise something like $2.2 Trillion in taxes but spend over $3.5 Trillion with all our borrowing. On top of that the Fed is in the process of creating another Trillion this year. So we're actually spending (as a nation) twice what we collect in taxes. It makes us appear more prosperous than we are and future spending will eventually have to be severely curtailed or we risk a future default. Meanwhile housing starts are way down. The shadow inventory of unsold bank owned properties is upward of 8 million units. Food prices just saw the biggest one month increase since the 1970's. Peripheral Europe is a basket case. Japan has its crisis and that will mean they will not be a buyer of US Treasuries any time soon and are already net sellers in an attempt to repatriate capital for the rebuilding efforts. Bear markets begin with a topping off pattern of lower highs and lower lows, which is exactly where we are right now. Don't be confused by the overnight efforts of the Plunge Protection brigade with their futures manipulation. I expect nothing less from the Bernanke cabal. They will stop at nothing to keep up the illusion of our "Potemkin Village' economy.
News 
Market Data 
Discover 
AI
