1069 is a critical level for the S & P. Today is a critical day. If we close below 1069, the rest of the week may be very ugly...for the bulls that is.
Trade is very strange today. It is as if the bears and bulls are duking it out, playing a game of tug of war. Bulls are stubborn by definition, but if revenues continue to disappoint, they will lose this battle.
I am so tired of hearing people (media) say, "Why are banks and corporations hoarding cash?" I'll tell you why - AGGREGATE DEMAND! The economy was so over leveraged, any extra cash is going toward debt reduction and not toward consumption. Even if the extra cash is not being used to reduce debt levels, it is being saved to prepare for the coming severe economic downturn. THIS IS A GOOD THING. It will be very tough in the short run, but it will restore the fundamentals that allow a healthy economy based on innovation and investment, not OVER consumption to emerge.
Behold...the death of Keynesian economics is near.
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1 comment:
I loved this post. You're so damn smart it makes my head spin. I love you!
And not just 'cause you're smart.
Love, Me
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