Category: doom and gloom

On the edge of a precipice

This is a note sent to a like-minded colleague yesterday:

I think we are on the edge of the precipice, a combination of confidence, enthusiasm, selective euphoria, blind optimism, faith (in central bankers), and buy-the-dip mentality (any correction is healthy).  The Bernanke put is the hook.  Everyone fixated on the magical powers of the Fed, totally blind to the utter economic destruction going on.  No one is stopping to consider that stocks are long dated economically correlated assets… and that the economic foundation has been reduced to quicksand. There are signs of delusion everywhere.  Two of my favorites: cash on the sidelines and a wall of bearish sentiment for stocks to climb… patently absurd.

With a follow-up today:

Notice how the bulls are scratching their heads today.  How can the market go down with the economic reports relatively strong this morning and Uncle Ben assuring us that his economic experiment was a success?  They simply can’t fathom the opposite.

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