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Sunday, September 13, 2009

Chart for the Week Ahead


*A few things to consider when viewing this chart and trying to decide what you should do with your money. After the Tech bubble crash AND after 9/11, the federal reserve, you know, those guys who are sso good at creating bubbles, was able to do two things: lower interest rates and get Congress to lift some of the restrictions that were still in place for investment banks to allow banks to take on leverage of around 30 to 1. These two decisions forged a partnership with Wall Street to PUSH the stock market to ever higher levels. As you can see, one need look no further to see how that worked out for ya. Now the question is: the bubble that Obama is trying to create through the likes of Geithner and Helicopter Ben, has nothing but mere puffery to inflate it. Does anyone remember the show Love American Style? Arte Johnson buys an inflatable doll only to find that she loses air faster than he can get out of his pajamas. So you decide for yourself. I think that the 3Q will be as good as the 2Q and maybe the 4Q will be less worse, but the 1Q of 2010 will be atrocious if only for the simple reason that Tariffs against the Chinese (already starting) will force them to retaliate, but more importantly, Americans have NO jobs and NO credit and NO cash, to buy just about anything. This chart should make anyone who has invested in the stock market shutter.

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