I don't mean to rubbish you but what you are saying is baseless and at best mis-interpretative.
By around August we will be two years into this "Global Financial Crisis".
If nothing else, this is significant because we will have, both domestically and internationally, two full years of company financials across all sectors to examine and scrutinise (as will the media and those who sit idly at the sidelines without teh courage to have any conviction at all).....
Back to the point?: I was musing with a colleague the other day just this point... Speaking regarding Australia, by end June that would be two full years of trading and company financials we can see for many of teh biggest Australian companies. We are undoubtedly going to see that they have:
1. Turned a profit 2. Contained bad and doubtful debts 3. Traded successfully in arguably the toughest times since the 1930's.
As far as the USA goes, I haven't read Bern(w)anke's comments but if indeed he has said what you say well then I respond as follows:
1. The market is and always will be a forward looking indicator. 2. What were the cumulative Domestic and International returns after the 1987 crash? 3. What were the cumulative Domestic and International returns after the conclusion of teh oil price shocks in the 1970's? 3. Do you suggest that the market in some way is not aware of the potential for Citibank, GE, AIG, General Motors, Chrysler and Ford to go bankrupt? 4. Do you suggest that the market is not aware of General growth Properties filing for Chapter 11 protection. 5. Few realise when a market is out of a bear phase until when it is well into the bull phase. That said, bulls and bears go together. You don't get one without the other.
Two full years into this crisis and well to be perfectly honest there's only been a handful of companies that have fallen victim (so far).
Bern(w)anke does not have the answers as far as I am concerned.
Cheers.
CER Price at posting:
4.5¢ Sentiment: None Disclosure: Held
