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Stock Ideas Investors Daily Edge Half Way to Hell
Stock Ideas Investors Daily Edge Half Way to Hell 
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By Andrew Mickey Chief Investment Strategist, Q1 Publishing "I know Americans are concerned about the adjustments that are taking place in our financial markets." – President Bush Adjustment!?! What on earth is a financial market “adjustment?” |
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| Half Way to Hell |
| Saturday, 27 December 2008 | ||||||||
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The US is in a mess that will inevitably be seen as one for the ages. Comparisons will be made with the Great Depression of the 1930s but that one won’t hold a candle to the presently unfolding one. How long is it going to take to get through this financial and economic disaster? Three of my friends from dental school and I just got together for a Christmas dinner. This has been going on for 32 years. This year we went to a steak house appropriately named “Bones”. I was shocked how crowded and thriving this high-end restaurant was. No economic problems on those plates. The real world is another story altogether and this was a main topic of conversation amongst the four of us. I suspect we all save up BS and bluster during the year to throw at each other during these meetings but I can only prove that on my part. Last year I threw out the 2008 label of “Year of the Bailouts”. I’m not sure any of my fellow diners remembered so I was a little more emphatic this year. Regardless, the same result with their memories is expected. 2009 should see the US dollar fall by 30 to 40%! One buddy asked if that is a bad thing and I assured him it will be. You’re looking at a global earthquake here as a cascading dollar will disrupt a multitude of other markets. Precious metals, Treasury debts, stocks and business in general will be impacted by a falling dollar, "Plunging Dollar - What, Me Worry?" You will be also. The conversation veered to how long it will take to hit bottom on the economic and financial side. I stated we’re about halfway there in extremely bad news coming our way. One friend agreed but another wanted to believe we’re close to the bottom here and now. The fourth was distracted by a waitress, his steak or a shiny object and had zero input. What are the signs that tell us we’re only halfway to the bottom? The magnitude of the fraud coming out of the NY/DC Axis of Weasels is just becoming apparent. Americans are in denial. Global observers are completely astounded that the various officials, like Paulson, Bernanke and the SEC, remain in charge of our economy and finances even though their policies and phony ideals are what have caused these problems to begin with.
History is replete with appropriate methods of dealing with those who fleece the public: It’s time to hear a few large thuds. Bets should be made on which shaped heads will roll the truest and furthest. We’re way past tar and feathers at this point. In all seriousness (as if I’m not) the US public needs to wake up. Here’s a partial list of events yet to unfold: Commercial real estate is every bit as compromised as residential * Insurance companies are full of toxic financial products * Pension funds are full of toxic products and failing investments * Credit card debts, tuition loans and car loans are going belly up * Fraud remains endemic in our money and our markets * The remaining big banks are on life support * Bailouts have only shored up crony capitalists to date * Derivatives continue to implode behind the scenes * Resetting of mortgage loans is going to cause another round of defaults and foreclosures * Government “solutions” are destined to worsen the problems * Municipal bonds are failing * Numerous states like California, Arizona and Florida are bankrupt * A lot of hedge funds are imploding Interestingly, I’ve recently read commentary about what exactly the definition of a depression is. The “D” Word is now thrown out with more and more regularity. IDE readers have a leg up on the newcomers "The 'D' Word" - 2/27/2008, "The 'D' Word: Part 2 Not Your Father's Recession" - 3/5/2008 and "The 'D' Word: Part 3 Your Cheatin' Heart or My Lyin' Eyes?" - 3/12/2008. Most still can’t discern the times. Hang on to your hats (and your heads), we’re only halfway to the bottom. There is hell to be paid. Invest Resourcefully, Rusty
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