The Stagflation trade...... This should be a "Real Bear Market", not one of those stupid 3 month bear markets, or what ever some stupid pundit calls it.... Great Bear markets are markets where the indexes go nowhere for YEARS, where we are range bound and investors get tired of stocks either going nowhere or going down. A Bear isn't just a declining market.
This being caused by crushing inflation, sucking up every bit of profit to be found, through Higher input costs by labor and materials.... We also should see an increase in Unionisation and socialization, all of this caused buy workers slowly getting screwed buy how poorly this economy has been running, and needing to feed their families, and intervention being needed to demand fair wages from Corporations, in an economic environment where their pay doesn't go as far as it used to.... Thank you Federal Reserve, and the Spector of Deflation.
I still hold my theory that the decline will be much slower, that the Feb decline, maybe 2 steps forward 3 steps back kind of thing. and instead of that happening in 30 days, it taking 3 months. The "Big Recession" has to prove itself, this shouldn't be as much a game of supposition.. but one of playing the numbers..
But .... Who knows......
Financial history doesn't repeat itself, but it often rhymes. You can't be stupid enough to trade off anything I say.... I'm lucky they let me out of the straight-jacket long enough to trade.
J. P. Morgan
Sunday, May 25, 2008
Where do we go from here.
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