Swine Flu is hitting Mexico and will spread to US. God forbids that it will not turn out as server as a SARS like crisis, since such kind of development will adversely affect consumer spending and thus affect the so called economic recovered theme, which will result in deep market pullback. I understand that, a lot of ass-burnt bears like to see that happens. But for the sake of our own healths, let's not wish for it. After all, if you are dead, why bother making money?
I have been closely monitoring gold and was concerning the recent strength of USD and therefore, were a bit reluctant to hit the gold pot. However, gold has been forming a double bottom type of short term support and has been rallying up from there. I found such movement as a short term positive trading opportunity, even though this might not be an ideal entry point to build longer term gold positions. For the time being, I will treat gold as a short term trading instrument. For longer term trade, I believe we will have a better entry point 3 to 6 months down the road.
With the spring seasonal effect, housing market seems to be alive again leading to people claiming that housing market has truned around and is recovering. Now, people need to understand that, unlike stock market rebounce, housing market normally does not have the kind of bear market type rallies since houses are not highly liquidatable trading vehicles. And historically, housing market will stay flat for a long time before it will resume its upward movement. I also like to remind people that, last year, housing market has shown similar kind of spring effect, the so called 春天发情期, and after that, housing market went ahead to correct a lot more in second half of the year. People also need to realize that, for those who are doing refinance or applying for mortgage, they would find that, the proceed is getting quite expense now and the cheap money game in the housing bubble era no longer exists.
Comparing with historic level, the current housing price is still relatively high and the rent to price ratio is still unacceptable to a lot of investors. As long as the housing price remains in a relatively high level, we should not expect a healthy housing market recovery. That would again have adverse effect on the GDP growth, which would be a drag to the economic recovery. This is like a deadlock. We wish the housing market can be stabilized now to prevent further financial meltdown. Unfortunately, a relatively high housing price will prevent the housing market from its own recovery, which will result in slower GDP growth.
The recent policy of printing money to fix the economy could lead to temporary adding fuel to fire effect to the economy. However, the danger lies ahead once the newly printed money dries up. The ever rising debt to GDP ratio is approaching its post WWII high and we should all realize that, a high debt to GDP ratio will have very negative long term effect on the economic growth and to a certain point, the Fed might have to reverse the current monetary policy to prevent hyper inflation, and that could lead to a haul on the economic recovery.
All such thoughts do not imply that, this bear rally will not continue for a much longer period of time. However, we do need to remind ourselves that, there are great uncertainties ahead of us and we need to be very cautious playing this market. Any conclusion of economic recovery at this point is immature at best. After all, what transpiring in front of us, is the largest financial crisis since the great Depression. Therefore, over expose ourselves to the stock market at this point is still very dangerous. |
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发表于 2009-4-27 09:02 AM
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Be cautious!!!
发表于 2009-4-27 09:54 AM
发表于 2009-4-27 11:44 AM