Real Estate Blog - Every Party Has a Pooper... Bull Trap a comin'!!!

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Every Party Has a Pooper... Bull Trap a comin'!!!

Sorry to rain on Wall Street's parade, 936 pts up on the Dow is a pretty good day...best in 70 years! So, I should have bought today, right???? Sure, but buy tomorrow with eyes wide open. There are a lot of blogs out there talking about the Chinese symbol for "crisis" having parts of the symbols of "danger" and "opportunity" in it, they are wrong. Danger is danger. In the words of Phil Esterhaus from Hill Street Blues..."Hey, let's be careful out there people!"

Why...

1) a plethora of recessionary data coming over the next 2 weeks, including zesty housing data.

2) weak earnings reports

3) the $700b bailout to no-where won't be hitting the streets for another few weeks.

4) Short seller madness over the past 3 trading days

5) McCrazy closing the gap in the polls...no one knows who will win...markets like predictability, regardless of the winner.

6) History repeats itself with regularity.

Take a look at the chart...buy back into the market at your own peril...until the longer term effects of the bailout are known and its ability to mitigate unemployment figures, you should tread carefully. There was a 9 month rebound in the market in 1929 too...sorry, but the fundementals for a quick recovery just don't exist!

Posted by Rich Sweum on 10/13/2008 04:03 PM

Comments (13)

Post is included in group: All About Mortgages/Mortgage Networking
Post is included in group: Mortgages

13 Comments on Every Party Has a Pooper... Bull Trap a comin'!!!

OCT

2008

It seems to be another crazy swing. But I prefer up over down. For today, I think I'll just enjoy having some good news even if it is short lived.

Rich -

Good point! Stock buyers - think clearly, now is not the time to get too impetuous!

DEAN & DEAN'S TEAM CHICAGO

Hi Rich Chartman, OK I held onto my stocks throughout this terrible slide down. Last Friday, they were at one third of their original value and I was kicking myself for not taking a relatively smaller loss a long time ago. Now I am wondering... should I sell now that they are up a bit...

Pam...positive news is like a breath of fresh air isn't it?

Dean...great word..."impetuous"...other words like, delusional, greedy, and immature come to mind.

Shirley...me? If you have 4 years...leave it alone. If we recover to last years highs from this point, and it takes 3 years, that is a pretty good return on your money! Unless you have individual stocks, leave them alone. A warning...I lose at the casino all the time! Many folks play me like a contrarian and do the exact opposite of me and do very well in the market!

Rich, I was just itching to make some financial risks/guesses because everything is so 'cheap', but then I came to my senses and said there is just too much risk right now. Glad I didn't jump the gun, but some things are looking so cheap. I'll probably look back a year from now and ask why I didn't pull the trigger, but the conservative side in me is saying 'stay put and see what happens'.

OCT

2008

Hi Lisa...with real estate, stocks, or bonds, with sooooo much unsurity...if you can afford to lose it, bet it! On the real estate side...if you can afford not to see your money for 5-7 years...buy it! I hope you are well!

Rich: I think you're right. I expect the Dow to go lower before rebounding. I would hope mortage interest rates might improve. They're awful today!

Paul

OCT

2008

But everybody LOVES a roller coaster ride:) Don't they? I prefer not quite so high coupled with not quite so low:)

Charles...roller coasters are fun times! But more fun when you can get off and take a break once in a while! The volatility index is recording the equivalent of 8.0's on the Richter Scale...we are likely to see the S&P 500 be a better reflection of the market's decline in the next 30 days. Whichever index you follow...it ain't gonna be pretty, more lows than highs.

OCT

2008

I agree Rich.

And, we have the bulk of those option ARM loans recasting between May, 2010 and May, 2012. Most of the subprime mess will be gone by mid 2009, however, it is gonna be time for another implosion soon after.

Ouch!!!

Bob...isn't it comforting that we as taxpayers will be buying those option arms at "face value"...beatiful. Mark-to-Market value assessment via Sarbannes Oxley will be going the way of the Buffalo! My grandchildren will be sooooo pleased!

OCT

2008

Rich - your insights are spot on. There is a surprisingly large number of people right now who are considering this time as "prime" for entering into the stock market. Not sure what they're eating (or smoking), but it's a no go for me at the moment. 'Course, I just might be a big fat clucking chicken. Bok Bok!

Kevin, I wish I was wrong. WATCH NEXT TUESDAY...the next round of "credit default swap" contracts are due to be auctioned...the last one which dealt with some Lehman Bro's contracts fetched 9cents on the dollar...Hedge funds are collapsing. We ain't seen nothin yet!!!

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