Thursday, February 11, 2016

Is this it?

"This is one sick market. How sick? Maybe terminal. Or not."

This has not been a good year so far for the investor. It seems for the first time in forever Wall Street is starting to suffer from the same malaise that main street has. And some experts are saying this is only the tip of the iceberg. What many have been saying for a few years now is coming to fruition. Our economy, in fact much of the world's economy, has been nothing but smoke and mirrors. And the chickens might be coming home to roost.

Today was another big news day. My wife gets somewhat peeved at me as quite often I will tell her that. "Big news day" is losing much of its impact these days. Kind of like "breaking news" is used for just about any news story. But for the market to dive over 400 points right after an overnight bloodbath in stocks worldwide is newsworthy. Also, for the second time this year, oil went below $27/barrel. 

This is not good no matter where you stand. There are precious few safe havens to put your money in right now. We could (heavy on the word could), be on the precipice of a world wide recession - maybe even a depression. And it is all because the metrics used for investment were false for so many years. Everyone has way, way too much debt. There is too much market speculation. And there is too much money being exchanged in return for nothing.

Now some countries in the Euro Zone are considering using negative interest rates. What is that? It is the most improbable thing you could imagine. For example, you put $100 in a bank and be guaranteed of getting only getting $95 back. How nuts is that? But it is possible. It could happen in Asia. It could happen in Europe. And it could happen here. 

For most of us now, all we can do is hold on tight. See what happens in the upcoming weeks. There really is no economic leader in the world today. We are all saddled with huge debt. Huge debt, largess governments, and future promises to keep for the next generation.
Am I worried? Yes. But maybe a controlled crash is what this world needs right now. So we can all get our economies fixed. Get our debt under control before we have a catastrophic non-controlled crash.

Buckle up folks. We are in a plane with no pilot. The plane is in trouble. And we are all in this together.   

No comments:

Post a Comment