Alan Gin issued his San Diego leading economic indicators. They are *down* for the 5th consecutive month.
“Stocks are trading at very high multiples of earnings but at a time when earnings are also at record levels. How much higher could they go? And if you did buy at this level, could the reward really be worth the risk? Ultimately, don’t stocks depend on the economy?
Dear reader, we give you the short answer: Stocks are not a good investment. Not at these prices. That doesn’t mean they won’t go up any more. It just means that it is unwise for you to follow them. There’s more downside to worry about than upside to hope for. Take this little boost as a gift from the gods; sell on rallies.
How long can US housing and stocks go in different directions, following different rules as though they breathed different air and ate different bread? Not long, we suspect. If houses are already beginning to climb down from the clouds…stocks, cannot be far behind.
“- Daily Reckoning
Every single housing market collapse has led to a recession, except the 2 housing market collapses that were bailed out by the Vietnam and Korean Wars. The slowdown has already hit San Diego.
