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Thursday, August 13, 2009

Predicting the stock market to go back down

I've thought this market increase was a sucker's rally. I just don't see how anyone would have the confidence to invest with this President and this congress and all of their plans for "hope and change". When congress is off the leash you never know what they will do. This government has shown that it doesn't care about contracts. It will void contracts to help out one of it's constituent groups. That doesn't give me confidence enough to invest. What if I make great choices and the government decides that my gain means a loss for some union and changes the playing field in the middle of the game?

Here is a prediction of gloom and doom from the chief credit strategist for the Royal Bank of Scotland.

I'm no market expert and I don't know if this guy knows what he's talking about but that is an interesting read.

From the article:
"A move to new lows is highly likely," he said.

Mr Janjuah, RBS's chief credit strategist, has a loyal following in the City. He was one of the very few analysts to speak out early about the dangerous excesses of the credit bubble. He then made waves in the summer of 2008 by issuing a global crash alert, giving warning that a "very nasty period is soon to be upon us" as – indeed it was. Lehman Brothers and AIG imploded weeks later.

This time he expects the S&P 500 index of US equities to reach the "mid 500s", almost halving from current levels near 1000.
I plan on keeping a close eye on the market. I just don't see how it can keep going up.


Albert A Rasch said...

The best financial analysts are, even if they won't admit it, good social psychologists. I read somewhere that the economy is 10% technical and 90% emotional. Go figure.

Just throwing out an invitation to visit The Rasch Outdoor Chronicles. Everyone is always welcome, we have lots of fun, and we take Outdoor pursuits seriously. I hope to see you soon!
Best regards,
The Rasch Outdoor Chronicles
Biology on the Bay: Mangroves

Bitmap said...

Neat blog. I'll be there.

The Other Mike S. said...

The market fundamentals simply do not support the current prices. I'm still holding to my belief that the Dow will end up in the high-4000 to low-5000 range.

One of my key indicators is New Jobs. Not unemployment rates, as Nanny manipulates the numbers, and doesn't count you if you fall off of the unemployment rolls.

Until THAT improves, the economy is still heading in the wrong direction. You can't support economic and business growth if people don't have money to spend.

Bitmap said...

The Other Mike S., the government is trying to make up for no job creation by inflating the currency. That doesn't seem to be working. I think you are about right on where the Dow will end up. I thought it would have taken that second dip before now.


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