Stock Market Analysis – 09-18-2008
Is everyone else also on the edge of their seats with all these wild swings? From low to high was a 7% swing today in the S&P 500. There are a lot of months that you don’t even see 7% in the S&P 500, let alone a 7% swing intraday. I’m still bearish and think these massive bounces are just lots of short covering, but it’s getting excessively difficult to try to do anything other than daytrade right now. Whatever you do, don’t let any losses get too big.
On a different note, there’s a lot of blame going around for why the economy is so bad right now. While it’s fashionable to blame the big investment banks or the government, there’s somebody who isn’t getting much heat even though they are just as much to blame… the people that are foreclosing on their houses because they bought more than they could afford. Obama and McCain (or is he going against Palin now?) are never going to say, "the way to fix this economy is for people to spend a little wiser." They’re going to keep pumping quick fixes and band-aids to keep from offending the masses. But the real fix comes from changing the way people handle their personal finances, starting with spending less than they make. If everyone pays back their loans starting at the bottom, then the credit market keeps running along smoothly.
Sure, there was a lot of bad advice from realtors and mortgage brokers going around, but when it comes down to it, you really should take responsibility and do a little research of your own when it comes to the largest purchase of your life. Maybe question how you can pay back a $500,000 loan when you only make $3000 a month? Just a suggestion though. The banks deserve a lot of blame for not managing their risks correctly, but they definitely aren’t the only guilty party in this whole thing. Just because someone leaves their door unlocked doesn’t mean you should go in and take their tv.
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