Quote:
Originally Posted by Hugh R
No expert here, but I don't see a lot of shorting going on with US $ or stocks. If there is an imminent collapse coming, the market doesn't seem to be realizing it.
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I haven't looked at the numbers re shorted stock, and I am also no expert, but the fact that the US markets and dollar are already so battered may be the reason.
FWIW, I read today that profits for the S&P's 500 were down 25% in the first quarter.
YTD Chart on NAS, DJ and SP not looking so good either:
Add into the mix continued bad-debt write downs by banks and their continued efforts to raise capital ratios via new cash . . . plus the "unknown" of when the bleeding will stop re the housing crunch and things don't look rosy, IMO.
Oh, I forgot high energy costs! It is certainly possible an economic "perfect storm" is forming.
If Obama wins and does what he has outlined, look for the marginal tax rate to go from around 39% to over 50% and the cap gains rate to go from 15% to 25%. This will be, if BO wins and IMO, what sends the US into a tailspin which will suck down Europe as well.
I don't think this is "chicken little" stuff, but fundamental problems which will not be helped by more insidious, higher taxation.
A broader collapse can be started by just a stumble or fall of one major institution.
Of course, times of extreme movement in either direction of the markets create opportunities for capitalists.
Ever hear of ICBC? It's the world's largest publicly traded financial institution (market cap of over $250B), and it's Chinese. China looks pretty good throughout this mess, IMO.
FWIW.
Best,