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| 1. We are, regardless of what folks say (politicians & stockbrokers have great difficulty in pronouncing the R word)..in a recession.
2. The stock market is trying to form a bottom...I think it is has to be tested a bit yet, but I speak from a different perspective as I leaped into some addition mutuals about 500 points higher from where we currently are on the dow & am down about 8.6% on that particular investment. I am going to be patient & see what this market does after the current crowd of shorts are run in....at the moment there is a large short interest. If I had not been so "smart" a few weeks ago, I would be a light buyer on these hard breaks.
3. As I have mentioned several times in the past couple of days, the FED is running those presses 24 hrs. a day. The big check book is open. Bernanke, in his academic life, studied the great depression and is considered an authority. The presses are ROLLING!
4. When the presses roll, we are re-inflating the economy.
5. A month ago, ECB (europe) did not follow the US Fed down in the rate cut. Current expectations are that at their next meeting, Europe will follow the US FED.
6. People are scared, pessimistic & have seen bad news for quite some time. Those are the conditions for which you seek a buying opportunity. And, my earlier point is, the housing debacle is not over & will most likely motivate the Fed into another rate cut in the next couple of months.
7. So, in inflationary times, do you want to own hard assets or cash? Cash which when the presses print loses value.
8. In my opinion, if we were to experience any sort of 'crash' it will occur from a higher level in the dow. There are massive amounts of dollars floating outside the USA & they will return to purchase something.
The grain market, of which I still want to buy the breaks in wheat & beans, and corn very lightly, could see wild swings, my buy points could well be too high, except at the points I have chosen, I can measure the loss I am willing to accept if wrong.
more later
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A Thought or Two.
