Day three of our GREAT BOND CRASH!
And, the Job Joy seems to be fading into a realization that
nothing has really changed with the economy.
The TWIN DEFICITS are all alive and well.
Iraq is still a gathering nightmare.
The dollar rebound will reduce multinational earnings.
And, earnings may not be all that good after all, based on demand.
The GOODS GLUT continues apace;
And China is still sucking up commodities; and India is still taking
jobs out of America. US Layoffs continue apace.
And, perhaps that HOSANNA NUMBER of 300,000 jobs might have been a
combination of a one-off SEASONAL AND "FUDGE" FACTORS IN A HAPPY
COMBINATION.
Every so often the stars occasionally do, "line up," at least for a
while.
BUT STILL, THE ROOF IS ON FIRE IN OUR BELOVED HOUSING SECTOR;
REITS CONTINUE TO PLUNGE; NO MATTER THAT THE CURRENT
ALLEGED "GOOD ECONOMY" SHOULD BE GOOD FOR REAL ESTATE TRUSTS TOO.
DON'T YA THINK?
Or, is all this higher rates sweetness and light only good for those
NAZZ small cap hotties?
And last, and possiblity most important;
IF YOU GIVE MOM AND POP A 6% BANK CD...............?
ALL WALL STREET WILL SEE OF THE "OLD FOLKS" IS THE BOTTOMS OF THEIR
FEET!
That's right! A 6% yeild at the bank will suck money out of stocks
big time.
NEED PROOF?
JUST GIVE ME AN HONEST CD 6%, AND I'M OUTTA HERE, BABY!
Finally, while the bond market is presently raising rates.
THE FED ISN'T! AND WON'T!
I STILL HOLD TO MY CONVICTION THAT GREENSPAN WILL NEVER RAISE
RATES DURING HIS CURRENT TERM AS FED CHIEF.
WHY?
WELL, DESPITE THE RECENT "IMPLIED JOY" ABOUT THE STRONG ECONOMY AND
JOBS.
I REALLY, REALLY DOUBT THAT THE STREET CAN HANDLE TOO MUCH
HARD CORE "REALITY" AT THIS POINT;
LIKE, FOR EXAMPLE, AN HONEST TO GOODNESS RATE HIKE BY THE FED.
That just ain't gonna happen.......
So, deal with it.
P.S. On the REIT CRASH:
REITS had been soaring everyday just prior to the recent
unpleasantness. So, even now, they are only back to the levels of a
couple weeks ago.
The REIT crash is really just some old fashion profit taking, with a
little help from the momo boys on the short side. The REIT crash is
probably just about OVER-DONE, whether you look at theory or
practice.
If higher rates mean a booming economy, then the dismal rental market
should pick up. But higher rates will never be good for the NAZZ
penny stocks which rely on being "default investments" in an ultra-
low rate environment.
