The markets are rowing with one oar these days.
And, sooner or later people are going to lose interest.
Consider:
WHERE'S THE NEW MOJO GOING TO COME FROM:
Corporations spend the "special currency" that Mr G gives them in
the form of ever higher stock prices.
And, Individuals spend their ever higher real estate equity in the
form of home equity loans or refis with some cash out.
BUT THAT'S ALL OVER NOW.
THE ERA OF EVER LOWER RATES HAS ENDED. NEED PROOF? LOOK AT GOLD AND
OIL. THE DAYS OF HYPER-LIQUIDITY ARE DONE. THE BOND MARKET IS
COMING WITH THE MOP AND BUCKET!
And, to put frosting on the cake, Dubya's tax cuts for the idle rich
have ballooned the deficit to the point where a weaker dollar will
balloon the trade deficit which is now ominously "structural."
ALAS, THERE IS NO CHOICE NOW BUT TO RETURN TO THE OLD DAYS OF
INVESTING FOR YIELD! THE 20 YEAR GREENSPAN BULL MARKET IS OVER.
WE HAVE BEEN IGNORING YIELDS FOR YEARS--BUT AT OUR PERIL--BECAUSE
YIELD IS THE BACKBONE OF REAL INVESTING.
Why invest if you get nothing in return?
There simply must be a return on investments OTHER THAN the
lottery ticket of speculation and the popular bigger fool theory.
IT MAY BE TIME TO PUT THE FOOL BACK IN THE CLOSET FOR A
WHILE...............because this is going to be a slow and grinding
decline; under current conditions stocks have nowhere to go but
down.
ALL THE CARDS HAVE BEEN DEALT. ALL THE BETS ARE MADE. AND, IT'S
TIME FOR EVERYONE TO SHOW THEIR CARDS.
ON THE STREET IT COULD BE TIME TO: READ 'EM AND WEEP.
BECAUSE;
THERE IS GOING TO BE A NEW PARADIGM SOON FOR THOSE WHO STILL HAVE A
PAIR OF DIMES TO INVEST!!
A RETURN TO HISTORICALLY "NORMAL YIELDS" LOOMS! CALL IT THE
COMING "MOP JOB!"
Stay tuned............because this return to normal levels of liquidity could get real sloppy.
