Money managers know they cannot keep this charade going. They know, while this recent rally feels good, it’s all based upon far reaching assumptions.
For example: The recent buying frenzy into “early cycle” stocks (retail, homies, banks) is absurd, considering we are pricing the end of a recession that has not even begun.
Anyone manging their money on that premise is delusional or fucktarded.
I’ll say it again, Federal Reserve rate cuts do not ensure the market will go higher. As a matter of fact, markets do better when the Fed is raising rates. Furthermore, the only reason we rapidly emerged from the last recession (2000-2003) was due to the creation of the housing bubble, coupled with good tax cuts.
Do we really want to create another housing bubble? And, if the democrats get in, kiss those tax cuts goodbye, by the way.
Remember, we have a consumer based economy. As of right now, unemployment is on the rise. Wages are being squeezed. The dollar is depreciating. Credit is still very tight for people with 800 FICO scores. It is non-existent for people with damaged credit. Finally, home values are not reflating.
Tell me, over the next six months, how does this scenario change?
As far as I’m concerned, I cannot get overly bullish until the jobs market improves.
What good is a fucking solvent bank when people are unemployed?Comments »