Too much money … but brain in demand …
As markets change directions every “five minutes” without a reason and we have Thanksgiving ahead … today “half day” in US, tomorrow closed, Friday half day as well … I decided to invest these days into some research 
Monday maybe Tuesday, we try to squeeze the lemon again …
Don’t get me wrong … yes, I like volatility … but with a reason … creating trends, follow through … but the current markets make me seasick … it is sometimes not easy to even be aware of the correct big figure … even worse as the fundamental picture seems to be clear … problem … too much money … too many brainless computerized models …
We have a credit crunch and this will lead to a recession … falling consumer demand guarantees that … home prices will fall … I think 30% is a fair first guess … the unwinding of this crises will take at least years not months … so equities seem nicely overvalued …
BUT … too much money … if you get cheap money you have to put it at work … as the situation is that clear … we have HUGE short interest and Put buying … which again holds markets up … the FED HAS TO MOVE … interest rates going down assured … means equities are “cheap” … and finally … and as the financial sector has huge problems, they don’t cut the earnings estimates as this would mean that they are stuck with their M&A bonds overhang on their books … which … if you are a COMPUTER and manage a fund … makes equities cheap again …
SO … technically we broke the uptrends and should fall … but due to the misinformation and easy money … it does not … conclusion … play it safe and wait for Q4 earnings … this finally will / should open the eyes and the downside … and pray for an interest rate HIKE of the BoJ … otherwise … we keep bubbling on … Take care!!!
Tags: credit crunch, FED, recession
