Yesterday we enjoyed a near 5% increase in the value of the DOW. Big deal! Most people long invested in the stock market have lost 30-40 and 50% or more of their investment value.
Anyone that believes this is anything but a bear market rally, and a short lived one at that is kidding him or herself. Look around at any of the main economic indicators:
Home prices continue to drop as do existing home sales
New home construction hits new lows
Unemployment numbers continue to increase
More large companies announce massive job layoffs
Losses at Freddi and Fannie keep mounting - now in the tens of billions of dollars
GM could be forced into bankruptcy as soon as April
And the list goes on and on. Only when employment increases and once home prices have stabilized can we begin to feel somewhat safe again.
The rally in stocks might last a few more months as speculators try their best to regain their losses through shear manipulation but the house of cards will come crashing down again, I am sure of it. When it does, it will send consumers into a near panic as they realize how tough their lives will be for the foreseeable future. Hang on, it's going to be a scary ride.
What do you think?
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