Tuesday, April 1, 2008

When It Just Does Not Add Up?

Up again!
Yahoo - Manufacturing, Construction Weaken
CNBC - Automakers Post Steep Declines in March US Sales
Yahoo - UBS, Deutsche Bank Wallow in Write-Downs
Yahoo - Celent: 200,000 US Banking Jobs at Risk
Economist - Bankruptcies in America: Waiting for Armageddon
FT Forum - The prudent will have to pay for the profligate
FT Column - America’s economy risks mother of all meltdowns

I look at the headlines and get a knot in my stomach. I stop at the gas station and cannot believe what a tank of gas is costing me. I look at my grocery bill and wonder what happened to cheap bread and milk.

And then there is the almost 400 point rally in the stock market. Wow! Something just does not add up.

Does Wall Street know something that I am missing? After all, these are the “smart money” people and I am the retail “nobody”. But then these are same people who are writing down billions of dollar of bad debt everyday because they don't know any better.

So should I believe the headlines and the state of the economy or rely on the optimism sweeping Wall Street? There are interesting times and if nothing else forces one to figure out – how to make money in the stock market?

Should you stay invested? Should you time the market? Is the worst behind us? Is it time to get back in financials? Are stocks a bargain? Are we in a recession? What is safe? Should I invest in commodities? What about gold and oil?

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1 comment:

Anonymous said...

I could not have been agreeing with you any more...
Exactly, the point is that rallies are happening at the logically most impossible time. And that makes me go cold and all weary.

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I have once blogged on how external acts of terrorism often moves the market in the least expected way.
Give it a look, although the study is done on one particular Asian market, but the findings are true across the spectrum.