Have just been reading all the posts that the markets have a long way to go, with low PE's and LBO's out there, who could go wrong.
Well, I was around in 1987, everybody got caught out and lost a bundle.
The next was 2000, where I joined the bullish madness and lost a bundle.
What is different this time.
Nothing really, even though everyone says it is different.
We have had the biggest oil boom ever, every other time it has been followed by a recession. The big arguement is that interest rates are low, unelmployment is at a great low rate of 4.5% in the staes, and the FED won't raise rates.
Hang on a tic. Consumer debt is at it's highest point in many years. People have borrowed against their houses to the max and house prices are going down and the housing industry is suffering in the worst way imaginable. Couple that with a very sick manufacturing base, a very low dollar and we have a looming disaster on our hands.
The only thing keeping the US markets up right now, yes you guessed it is the Yen carry trade. The US Govt is actively supporting the USDJPY spot right now to stop them from going into recession. All these Mergers and LBO's are being funded by borrowing in Yen. That will come to an abrupt end as the Japanese economy strengthens. They will have to raise rates. I can't see any positives in this bull run right now.
It looks to me like a bear market rally for sure. So, when it ends, it is going to be ugly, it will end sooner than anyone thinks.
The amount of positive comment on Hotcopper and all the chat sites and Newspapers is the best indicator a contrarian could ever hope for.
I have my alerts set for a serious meltdown, that could start any day now.
Mclaren has shown on his charts that June 12 will be the top of this bull market, I think he is right.
DOW is making record highs every day. S&P500 has not yet, nor has Nasdaq which probably won't in my lifetime.
The DAX and FTSE are also way from highs. Sure, the DAX has made up a lot of ground, but is still 630 points shy of it's all time high which was 8136.
Granted, it could do it in a hurry.
The Feb correction was a warning shot across the bow that should be heeded. Not to see the signs right now is a dangerous thing.
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