True.

————–

Things aren’t as bad now as they were last fall and this spring.

Banks are not failing right now so the panic has gone. But the crap is still there, the fed et al. have just put it in their freezers. But when the electricity gets cut off because you can’t afford to import your oil anymore or when your freezer gets full, the stench will come back.

——————–

We’re no longer falling off a cliff.

It’s like in Road Runner, you know when the edge of the cliff is cracking but the coyote is still stanidng there.

—-

The crap is still there.

You are still net importers of oil yet printing money and about to embark on infrastructure expansions and mainteance project galore which means your energy demand will only increase.

Your consumer debt servicing ratio has never been higher while rates are at all time lows.

It will come from where YOU are not looking.

The people I know in the construction world are more crooked than the bankers. Now we’re throwing even more money their way. Out of the oil into the frying pan. That’s what I meant.

Big picture, long term, history can be a guide. But, visibility into our specific path forward is limited right now.

Equity Independent – day trader with no overnight exposure?

It was really bad, it got worse, people panicked. Things aren’t as bad now as they were last fall and this spring. We’re no longer falling off a cliff. We may or may not be coming off the lows, we may or may not be going through a dead cat bounce or a W shaped severe depression. Things may or may not get better from here. We might have deflation, we might have inflation . . . . etc

I guess what I’m trying to say is that there are equally valid points made by both the bulls and the bears. Economic data can more often than not be interpreted in any way you want to interpret them (less bad = good!). I think Ahab makes a very good point 601K new claims is considered good news. Is this government and media propaganda or is this the psychology of a population coming out of panic?

End result – no one really know where we’re headed – frankly, that’s more terrifying to me that anything.

Tangent – is there a term for someone who is neither a bear or a bull? Equity Independent?

“thanks for the history lesson”

I can’t help it. It’s in the family. Many teachers. :)

rc

“Alt-A mortgage resets/failures/defaults, Option ARM resets/defaults, Commercial RE resets/defaults (see earlier TBP post), CC defaults.”

Yes, I know. I have mentioned it here myself. And there is also the issue of the total credit market debt to GDP ratio of 370%. But this is real economy. I am talking stock market. This is a probable flood of bad news for the stock market in the future. But not now. And not really for the rest of the year. The reset/recast schedule will go up later this year and peak in 2011. Then you also have to consider a lag before an increasing number of defaults leads to writedowns of bad loans and before it affects other sectors of economy. Before this happens and before there may be a not reconcilable disconnect between the perception in the stock market and reality the market could have gone up further from here. Maybe to 1100? Thus, if it crashes back from there, it just might go the range of the February/March 2009 lows again. It depends on where the starting point is before it retreats again. I really don’t have any opinion where it will go from where it is now. It could be further up, it could be down again. Test the March lows. Or not. Betting on either of both directions is risky right now. In contrast, in 2007/2009 I had a clear opinion. I sold all my stock funds in my retirement account in spring 2007 and put everything into a money market fund. I am not going to change this for now. I only do short term trading in my trading account.

As for the 370% credit to GDP ratio. It’s a huge number, it can’t go up forever, since debt has to be serviced at some point. I expect a day of reckoning regarding this. But you shouldn’t underestimate the ability of governments to make debt. What is the public debt to GDP ratio in USA? About 70%? Japan’s is at almost 200%. Other countries have also higher ratios. Thus, still way to go for the United States. Thus, before the debt burden of the capitalist world economy crashes over all of us, it still could take many years. This recession might not be it.

rc

thanks for the history lesson- initial claims are 601,000- continuing claims are 6.8 million- a record- additionally- last weeks continuing claims were revised from -15,000 to +6,000. That initial claims were 14,000 less than anticipated does not hit me as exceptional news-

was my only point

June 11th, 2009 at 11:21 am
@ schoolsout

Have you heard about HR 1207? It’s a good start.

——

Yes, I am a Ron Paul supporter