If economy does a deep dive…
On September 18, 2008, maverick_rich posted the following:
Apple is selling off because of funds needing access to cash.
However, the markets crashing may not prove to be a good time to invest this time around. We have a huge variable here not seen in the past: credit contraction. This is a huge sum of money being taken away from the economy. The Bond market is extremely huge relative to the stock market. The problem we have is in the bond market side and there is no way that the stock market or the economy is going to survive a bond market contraction. The bond market can swallow the entire stock market and still be starved for more. If you are looking what the bond market is saying, it is predicting a nasty contraction of the economy.
People here are making a huge assumption that the money on the sidelines will somehow be put to work. Hate to break it to you, but there is no money on the sidelines. That money is being taken away to deal with the bond market damage. People want their money back in cash or treasury bills. There is no interest in putting that money to work in investments.
I’m not saying get out. I’m simply trying to tell people be very careful. Looking towards history for help on how to invest is a poor decision when what we are experiencing has not happened since 1929 and the 1930s. This is no longer 1987… it is far worse. 2001 is a joke relative to what we are seeing. There is little leadership because cash is king. It may not rebound this time around.
This is why I’m preaching for folks to start preparing for the worst, and pray for the best. I just don’t believe we have the leadership in Washington to handle the problems we are facing. There are too many crooks who are looking out for their own best interests and don’t give a rats ass about America. The invisible hand is great when building wealth by investing. It does not work when individual goals are to destroy capital for profit. There is no secondary economic benefit from shorts…
techstock2000 @ September 18, 2008