The Games Continue
So much for “no entity is to big to fail”, another rescue plan is unveiled over the weekend.Â It is a losing game.Â When mortgage lenders were making loans in 2005 in a residential real estate that was 46 percentÂ above trend what were they thinking, stairway to heaven ?Â So this is going to take a while to unravel, we don’t see a real bottom before 2011 and at prices that will be at or below trend.
In the meantime the stock market may see a half-cycle bounce to the 1300 area in the S&P, but it isÂ probably an untradeable bounce as it is based on bottom-pickers and government intervention, not the most stable of criteria. As such we contine to look for this summers market in the S&P to base in the 1100 area and then we may see a 10 percent summer rally to the 1260 area.Â
8:08 AM CDT