[quote=livinincali]What’s really interesting about this situation is I thought about the possibility of this but dismissed it because of how stupid it would be to take the free rent and spend it all in the economy. Why wouldn’t you save it so you would be fairly well setup when you eventually lose the house. Of course by dismissing it as being a dumb decision, I made other mistakes about judging the economy. This is one of the traps that I’ve fallen into countless times. You apply you’re personal experience and values to the macro situation which turns out to be wrong because people don’t think like you do. I’ll never understand the “American Idol” thing but because I don’t, I’m not a very good judge of the macro thought process of the American psyche.
Anyways that said it should be interesting to see what happens in the next 6 months. Lots of new uncertainties although people seem to becoming pretty convinced this is no longer just a bear market rally that the trend has changed back to a long term bull. Let’s see if that’s really the case. Bear market rallies usually top once people are convinced the larger degree bull market trend is back in tact. That’s the whole goal of a bear market rally to convince you things have turned the corner.[/quote]
When the PTB convince the masses that they will never have to pay for their mistakes, this is what you get.
Like you, I never understood the psychology of the general population as it relates to consumer goods and fads, so have not been good at picking bottoms (which is why I tend toward short selling, because it’s fairly easy for me to see when things have gone really crazy…though I’m always early).
Without a doubt, the people on the street are convinced that the recession is behind us, and that all is good with the world. Based on my experience with these things in the past, we’ll see a very bullish trend for some time. Nobody is trying to look behind the curtain.
