"It aint' over 'til it's over." And that ain't now.
I have used this expression all too often in the past few months -- a reaction to the oversupply of market optimists who have abandoned reason and what they learned in third-grade math.
The way I see it, the economy is in worse shape than people think, earnings will be worse than expected, and the stock market is not heading up any time soon.
Here are seven reasons why you'd be a fool to think differently (click on each item for a more complete analysis):
1. The housing crisis isn't over.
3. Credit markets remain frozen.
4. The banks are falling apart.
5. The consumer has stopped spending.
6. IT spending is flat and falling.
7. The government is grasping at air.
Any one of these points should be enough to make investors cautious, but taken together they add up to some very bad news for markets across the globe.
Michael Shulman is a contributor to OptionsZone.com.
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Reader Comments (Page 1 of 4)
1-23-2009 @ 6:26PM
jaguarman4 said...
RJH FD i just heard the same thing on fox news white males need not apply WE NEED TO WAKE UP AMERICA I applied for a small business loan and i have good credit BB&T BANK TOLD ME NO yet if you go on their website they have special LOANS FOR ILLEGAL MEXICANS AND AFRICANS what the heck is going on in america
1-23-2009 @ 6:58PM
Bob Olear said...
Lets start with a 4 day work week. 5th day should be used if needed- reg pay- those with only 1 income should be given 1st choice. Keep gas prices low so people can travel this summer. Total taxes on cars under $30,000- flat $100. Over $30,000- they can afford to pay the tax. Spend huge sums on roads in America- slogan- see America on new roads. Get rid of the United Auto Workers Club. Go back to Company unions.
1-23-2009 @ 7:41PM
travelertaylor said...
Georgie, you and your Voodoo economics have done one heck uva job.
1-23-2009 @ 7:42PM
David said...
Goddogdmt 07:16 PMJan 24 2009 .... Here Is A Little Reality: ... Regarding Obama. "It did not matter who won the election." The handlers around Obama are, for the most part, members of the Council on Foreign Relations. "The elite." "The globalists." They are essentially the same people who ran the Clinton administration and both Bush Administrations. "There will be absolutely no change in either our domestic or foreign policy. (My note: the people who have looted this country will continue to loot this country.) Regarding economic policies "Obama" will be another Hoover." In other words Obama will follow orders and will take the fall for the economic calamity that is about to unfold. (My note: Obama is another feckless, empty suit, who was selected, trained, groomed, packaged and sold to a gullible, naive and lazy American public.)
1-23-2009 @ 8:30PM
toogeorge said...
And here's another one.......THE REAL PROBLEM IS HOW MUCH MORE WE HAVE SPENT THAN WE EARNED........ WE HAVE REACHED A SIX(6) $TRILLION TAB! ! !........HERE'S THE TRUTH, FOLKS...look at the $50-70 billion a month trade deficit, for the past ten years...That's $6 trillion, check my arithmetic.........What's interesting is that the new man at the helm is proposing we spend even more than we earn(did I hear a $850billion rescue package?). Isn't that rather like having a drink or two to cure last night's hangover? We would still be alcoholics. The only logical answer(except one) is that we have to accept a lower standard of living...Not by much, but we cannot continue to spend more than we earn.....There is one other solution, produce and sell more, but is that likely? ?
1-23-2009 @ 9:00PM
Mike Drescher said...
The Republicans have put the U.S. in a bind, by wasting money on tax giveaways to the richest Americans, while cutting needed social services and then starting a war for the oil companies. These efforts doubled the national debt in eight years, dried up the credit market and put us in a downward spiral.
1-23-2009 @ 9:59PM
Gary said...
This story is ridiculous. Who is this moron who wrote this crap? He got half of his points wrong according to most economists.
1-23-2009 @ 11:39PM
Bill said...
anyone who blames just one party is a fool. Its all about money and power and they have it and we don't. Notice anyone going to jail, any Congressional hearings on whose fault this is, anyone paying any of the money they swindled us out of being paid back?
The only thing for sure is that we used to be citizens who controlled our own destiny now were nothing better than subjects under the crown of the All Powerful Dollar and the Government that Printed Them. Think your taxes are high now, just keep an eye on the little ball under the cup.
Watch now who gets rich!
1-24-2009 @ 5:05AM
Richard Keniston said...
The primary reason that the stock market will remain in decline is that the President and the Democrats in Congress are waging war on capitalism! Since 1990, there has been a very strong inverse relationship between the Dow Jones Industrial Average and Percent of American Workers in Labor Unions (R-Squared = 0.7206). When the Democrats took over control of Congress in 2007, they pushed the irrational and uneconomic support of labor unions, which was accompanied by a reversal of the two decades long pattern of decline in Labor Union Membership and accompanying increase in the DJIA and economic prosperity. To see just how devastating the support of Labor Unions can be, look to the Auto Industry. There has been a 60% decline in employment in Auto Manufacturing in Michigan since 1990! Michigan is the state with the highest unemployment rate!
1-24-2009 @ 6:58AM
aftonmoon said...
The main reason that stocks will not go up is because the prices were artificially inflated to begin with. In addition, with the baby boomers retiring there will be increasing liquidation of 401ks and other instruments, in other words more people selling then buying. And with the continuing demise of pension plans that source of demand will dry up. Most of all investors have awakened to the fact that this is all a big gamble and you shouldn't play another man's game.
1-24-2009 @ 8:51AM
Mike Drescher said...
The analysis is wrong, I think. Like the last great depression, many people still have jobs and money. Since banks are paying nothing in interest, land prices are retreating, stocks are a better investment, other than gold bars under the bed. Where does a McCain with 13 cars and 7 houses put his 400,000 salary, in stocks. America is not broke, merely the rich were given all the money the last eight years. In Iraq reconstruction money, over 8 billion has been stolen alone, most of that money went to rich Republican's back pockets and will end up in stocks. Consumer spending is down because of economic uncertainty and a change in attitudes toward conspicuous consumption, actually this will be good for the country, and will spur more intelligent investment. Stocks again will become an investment in the future, not a plaything for day traders, that error is probably over.
1-24-2009 @ 10:15AM
kaoz4018 said...
I motion that we put a ban on forums and comment sections in the US...without them...we wouldn't know how stupid and ignorant a lot of Americans really are..and then we can continue pretending that we are the intellectually elite without having any proof like the comments of jaguarman to suggest otherwise..
1-24-2009 @ 10:21AM
ayatollahgondola said...
Stock investments are "tomorrow" money. People are more focused on "today" money right now. If you want the stock market to rise, you must give people incentive to invest in tomorrow. Right now, that incentive is just not there. The threat of taxing any real gains from it are elevated right now, and the government is not really taking any hard steps toward returning American industry and Technology sectors to, well,,,America, Besides, who wants to trust the institutions that have turned a simple idea into a perverse bureaucracy that has become so dependent upon new investment that it hides losses and performance to protect its' position?
1-24-2009 @ 10:26AM
donny said...
the entire government is the problem. You have senate and congress passing bills that hurt more than help. giving there selfs raises, they where rich when the went in. They already have great paying jobs. It should be a honor to be able to do that job. I could understand paying them a allowence while there. but, not the amount they get payed. They should do like the ceos of the car companys. get paid a dolar a year until the deficit is payed. They should have a set term of office. I think they have to much power in the government.
1-24-2009 @ 10:42AM
Bill Vaughn said...
I understand the problems many have with this recession, but I do not understand why you let it happen to you. If you want a better life, don't wail about your life - get out there and change it. Find a plan that can work, and then work it. You will do fine. I chose Bill Vaughn's program a couple years ago from the internet and I made over $300K a year even during these bad times, so you can do it if you really want to. If you won't do anything to help yourself, then you already have the life you deserve. Get up. Find or make a plan. Work the plan. Recession or not, you will do well. What will NOT help is throwing your hands in the air.
1-24-2009 @ 10:50AM
TED said...
Talk about stupid articles, this guy deserves idiot of the month award. There are many good companies where the stock is selling near 52 week highs. These companies are making money and the stocks continue to increase in value. With solid fundamentals, solid yields, great P/E and PEG ratios these companies will reward investors willing to dig them out. In the stock market as a whole when in P/E the e goes down the p will follow and in PEG the growth will slow.
1-24-2009 @ 11:12AM
Master Shake said...
The United States has been on a one-way road to a bankrupt military police state ever since Reagan created the "War on Drugs" - seriously, everything from that point forward has been a matter of selling the gullible American public on one stupid idea after another, all of which rob you blind and deprive you of basic civil rights. At the current rate of decline, you will be a formal police state within another 5 years. You are closer than you probably think right now. You have less than 5% of the world's population, but over 25% of the world's prisoners. Yet you remain blissfully unaware of what this really means in the long term.
1-24-2009 @ 12:05PM
thestucksticker said...
I was reading the comments to this blog and I gotta say, I am with you fellas !
1-24-2009 @ 12:22PM
Redd said...
This artical misses the point completely. The reason why we are in this mess is pure and simple. Oil and gas prices went much too high, Speculators were misinformed and the oil co. just went along. If you are worried about heating your home then you are likely not to spend! All goods that travel by truck and that's just about everything become more expensive. When stocks start to rise then oil does too and squashes any progress made. The best stimulis plan by far would be if energy was less $ and stayed down.
1-24-2009 @ 12:23PM
Dot said...
The Voters of this country are the problem; for continuing to vote for politicians that have RECORDS that show bad character and bad behavior that is DESCTRUCTIVE to this country, economically as well as socially.
RESEARHC .ORG SITES, folks.
Ignorance is not bliss....it's plain laziness and intolerable.