I hold FAZ. It’s going to go up - and I am very sad to say that.
By Daniel at 6 July, 2009, 9:22 am
The markets are now dominated by traders - they don’t care about new technology or corporate profits or how well a company treats its employees. Future profits will be made by taking money from naive investors who still have confidence in the future of the US.
This is why you see excellent companies trashed by a downturn today. No one cares but ‘quick profit’ traders, the investors are mostly gone. Suckers are left and they will be exploited.
Insiders are outselling insider purchases (i.e. Corporate leaders have no faith in the US future) Banks have sold an enormous amount of stock into a weak market because they don’t want the Government to limit their bonuses and salaries and the fire sale of their stock gives them $ to leave TARP.
Larry Kudlow is flat wrong - banks can’t make money REGARDLESS of the yield curve because consumers can’t borrow - and new mortgages drop suddenly with a small in crease in interest rates ( which tells you how fragile they are)
The huge expansion of debt has purchased a ‘time out’, a pause in which the depressionary outcome is delayed at an enormous cost.
The future? States barely escaping bankruptcy while cutting services savagely, Fed auctions that don’t go well, nationalized health care that never materializes, foreign markets that NEVER ‘decouple’, banks that desperately charge poor students and broke consumers increasing fees, years of deleveraging, and aging baby boomers who will never retire and never find another good job.
I feel bad that I am making money on the bad economy. I really hope long isn’t too long for everyone’s sake.
Faz? I’m long. I wish I wasn’t.
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