the fed’s action today wasn’t because everything’s peachy and it’s a great time to buy. i think the fed has been communicating for the past month that now is the time to get the hell out of dodge.
it is a loan, a huge loan backed by junk mortgages. it’s a step towards nationalization or debt forgiveness. it’s not going to be good for stocks either way; share holders will get raped in order to save the bank and depositors. stiff regulations will be put into place to prevent reckless credit (again). jobs will diminish from the lack of credit. consumers are tanked and so is growth.
this current run up starting around 2003 was driven by what? credit. the housing boom which is now a bust. we are actually in a deflationary period, at least in terms of equities because of the massive amount of credit that was floated. that hedge fund that bet and won on subprime failure? they still went belly up because they were holding a lot of “good” debt that went south. margin calls, ie., contraction of credit is deflating equities and it’s far from over; it’ll be over when the fed/us govt nationalizes or forgives the debt.
why buy every dip? why not buy every other dip or every third dip? why buy now? what’s the difference between buying now and buying in the future in terms of “market timing”? isn’t the motive for buying now, buying the dips predicated on hopes that it’s a good *time* to buy?
if you’re afraid of losing your job, afraid that the economy will tank big time, hedging by investing in inverse funds or shorting the market is surely a good play. if your bets lose, presumably that means you still have a job and can make more money. if you win, you may or may not lose your job, but at least you’ll have some float.
