- The US Dollar has bottomed out.
- The US FED will save the day!
- The Fed and US Treasury believe in a strong US Dollar policy.
- GOLD is overvalued and must be sold.
- GOLD is illiquid.
- You must Sell gold and buy stocks!!!!
- Inflation is not a threat and is under control.
- We’ve seen the last of the write downs and losses at the banks. Their books are clean now.
- Financial stocks are cheap after the massive correction over 2007.
- The Credit Crunch is over!!
- The Sub prime mess is contained, and the US economy is resilient.
- Resetting ARMs will cause no trouble at all.
- The US Consumer is in good health, and is ready to leverage up again.
- It’s a good time to buy a home in the US.
- The US Economy will turn around sometime next year, or later in 2008, once we’re over this temporary blip.
INSTEAD REMEMBER that
- GOLD IS MONEY
- Inflation is becoming a major dilemma for Central Banks everywhere.
- Bailouts only come to those overloaded with ‘derivative counterparty risk’ (You cannot be a threat to overall stability!!)
- Deleveraging is a long and painful process. ( even Buffet recently said so!!)
- Losses from Toxic CDOs will only increase as the housing slump deteriorates further.
- The Banks won’t lend to each other, because there is no trust.
- They don’t know the losses in their own books, let alone try guessing potential losses in the counterparty’s books.
- Rate cuts won’t solve problems of fear and uncertainty, let alone deal with an oversupply in US home inventory.
- This is an Insolvency crisis, coupled with total loss of confidence, in addition to the much talked about credit crisis.
- The Pundits who were bullish on emerging markets going into 2008 are nowhere to be seen. Some even recommend waiting for a further fall(after the massive crash) in emerging markets before attempting any fresh buying.
- The government may brush aside inflation fears…. but rising unemployment from resulting job cuts, will be a difficult issue to deal with in an election year.
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