Crisis watch continues
Let's not kid ourselves. The financial crisis continues into 2009. Whether or not the stock market goes up in the coming month or so isn't the point. It very well might head up. It's severely "oversold," as the technical term goes; in any case, nothing - not even the stock market - heads straight down.
The best position to assume is "defensive," with eyes and ears open to what you can determine to be true, as opposed to speculation, projection, or plain hot air. That will be the key challenge in 2009, since everyone will have their "opinion."
So what we know right now is that the stock market is definitely oversold, and therefore liable to a bounce back, perhaps a very significant one (10%+); no one can claim with assurance that the market has "bottomed" and that we are embarking on a new bull market; bear market fundamentals have not been definitively contradicted yet...and "yet" is the operative word.
As for the economy, governments around the world will pour money into public works-type projects, doing all they can to prevent a nasty deflation from taking hold, and unemployment from sky-rocketing. How their schemes work out is something we'll know in the next 12 months. However they do work out, we know that ultimately, inflation will soar. But it probably will not be an issue near-term; maybe 12 - 36 months out from here.
So "crisis watch" will continue to be a central theme in 2009.
The best position to assume is "defensive," with eyes and ears open to what you can determine to be true, as opposed to speculation, projection, or plain hot air. That will be the key challenge in 2009, since everyone will have their "opinion."
So what we know right now is that the stock market is definitely oversold, and therefore liable to a bounce back, perhaps a very significant one (10%+); no one can claim with assurance that the market has "bottomed" and that we are embarking on a new bull market; bear market fundamentals have not been definitively contradicted yet...and "yet" is the operative word.
As for the economy, governments around the world will pour money into public works-type projects, doing all they can to prevent a nasty deflation from taking hold, and unemployment from sky-rocketing. How their schemes work out is something we'll know in the next 12 months. However they do work out, we know that ultimately, inflation will soar. But it probably will not be an issue near-term; maybe 12 - 36 months out from here.
So "crisis watch" will continue to be a central theme in 2009.
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