Entering Bear Territory..
20 of the 29 major world markets are in bear market territory. The US is in good company with the majority of major markets in the world in bear market territory and here in Australia we will not escape either.
Looking at the history of America, they have never had a stable economic rebound without a recovery in the housing and construction market. So what’s going on since 2008?
Let’s take a look at some recent facts. At the end of August, there were 6.4 million delinquent home mortgages. Combine this with a huge inventory of already foreclosed it’s a classic oversupply situation and 1 in 5 Americans (20%) with a mortgage, owes more than their home is worth, and $7 trillion of homeowners’ equity has been lost in the bust.
It will take years for the housing market to recover and, hence, it will take years for us to see a meaningful economic recovery in America.
Without jobs growth the US cannot recover it will take years to create new jobs and now the pain of Europe’s sovereign Debt is exploding fear unrest and uncertainty.
Moody’s (the rating Agency) has now put Belgium on a warning of a downgrade. Spain and Italy have already been downgraded. This week 9 Portuguese banks have been downgraded along with 2 top British banks.
The Bear Wrangler says be careful who you are taking advice from – always do your own homework.
Spruikers, Brokers, Fund managers, and Financial Advisors can all have a vested interest for you to buy stock on dips, calling a bottom or a “bargain time to buy” and or to convince you to hold your current stock because they want their wages and commissions and are prepared to get it at any cost. You will pay them whether you win, draw or loose.
The Bear Wrangler says “Watch out for the Bull Shi**ers, do your own research, make your own decisions.”
