A very simple question: are we heading for another round of economic grief?

August 25, 2010

(To increase the font of this essay – hold down the Ctrl key and keep pressing +) Want to know why the stock market these days just can’t seem to get it up? Well first of all – forget what the politicians have to say about the economy – truth is they know very little about what’s actually going on to the tune of fuck all.

Secondly, even if they had some pea brain idea, the problem is probably so big; they don’t have the tools to fix what’s busted.

Don’t complicate your already complicated life – keep it simple – and that basically means cutting off all the stuff that doesn’t add any value to the bigger picture.

At the end of the day, if you really want to know why the economy is belching black smoke – it all boils down to only one driver – CONFIDENCE.

The facts of life are very simple – most people just have no confidence in the well being of the economy – the latest housing figures that just rolled out in the US seems to confirm this. As much as I want to believe August is a one-month aberration. I really don’t think so – not by a long shot lah. And don’t hold your breath for September either. Or for that matter October, November, December. In fact, don’t hold your breath at all waiting for a rebound in housing because all you’ll do is turn blue, suffocate and die.

This is the executive summary – nobody wants to buy a house because in order to buy a house you have to have some bit of confidence in the future. And today there isn’t much confidence in anything that has to do with the economy.

Forget about talk that another big drop in housing prices is needed to spur demand. Prices have already fallen 25% or more from their peak in many areas as distressed sales made an outsize impact in the market. That demand, too, has been slaked. Listen to a radio report on how much farther home prices could fall.

No, the only thing that will turn this mess around is jobs. Until this economy can put people back into 9 to 5 work – then no amount of PR publicity is going to change the fact – we are in deep shit.

That my friends is the low down. But having said that I believe this downturn is a great buying opportunity for some stocks.

I am going into the following – National Bank of Greece and Boeing Aeroplane Group. You want to know the reason…it is very simple…whenever people run out of a burning house…that’s what I call a fire sale! Life is very simple.

Darkness 2010.

DISCLOSURE: THE AUTHOR HAS POSITIONS OF NBG AND BA.

 “In life I realize that some people do things for fun and some do it professionally – if you do a thing professionally – and I don’t really care whether it is something that gives satisfaction to lonely men or if you are just a reporter for the Strait Times – either way the attitude is the same, you really need to focus on what you’re doing. That’s to say, you need to cover all the bases. You need to make sure the front and back end is all sewn up real nice. I happen to know this; as I put myself through university by playing pool professionally – that’s to say, I earn money from it – so I know the discipline of the game very well. And let me tell you something, it is not so different from playing the stock market – one thing is for sure, the market will always test you. And if it turns ugly, all you have is your two guli’s and what may come – if it a bad game of pool? It could be a knife or gun. There is no where to run as most pool halls are in the basement…so you learn to deal with it. The way I saw it then; if I didn’t pay my school fees – I was dead meat any way. So the way I figure it, if I end up dead on the pavement – it wouldn’t make one molecule of difference either way. I had nothing to lose!

If you play pool just for fun, I don’t think, you will ever know what it feels like to play pool the way I used to play it – then I guess you could just as well throw the game. But if like me, you are playing it to pay your school fees or to put food on the table – then you just have to go with the flow, smile and make the best of it – that I believe is what differentiates the professional from the amatuer – the latter can always walk away – the former cannot, that’s his life! For better or for worse.”

Darknes 2009 – Captured by an auto-bot in a thread in Ekunaba.

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