The Magicians Won this round
It would appear that the magicians have put up a smoke screen that has reduced the panic level substanhtially, so much so that greed has come roaring back.Â For the moment this sets up a trading range of 1230 to 1290 on the S&P with extreme areas of 1200 and 1320.Â This most important factor for all investors who did not go to cash when the S&P was at 1440, is, don’t miss the next chance at 1320.
This Sunday’s Â NYT has outdone itself with a number of solid articles. One by Gretchen Morgenson on page 1.Â In the WEEK IN REVIEW section don’t miss “Too Big to Fail” by Peter S. Goodman, also Thomas Freidman and Frank Rich are on target in this same section.
We have a lot of long-term subjects on our plate that we want to start discussing,Â starting with why we think the housing bubble is so much different than either the earlier tech bubble, or the current commodity bubble, these bubbles are paid for essentially by cash, they instantly deplete our checking accounts. The housing bubble is a totally different animal, it was financed by borrowing and as housing prices decline towards trend, they are not close yet, Â it will put pressure onÂ all aspects of the financing arena, regardless of government bailouts. The solutions will have to much more creative than what we have seen so far.Â We will talk about that over the next few months.
Our Marketocaracy Fund positions in stocks and commodities remain unchanged from two weeks ago when the S&P was at 1270.Â If we see needed changes we will send out the info.