WATCH OUT FOR THE BUBBLE!!!!!!!!!

What I find interesting in this whole fiasco is the “feel” of it, expecially as it relates to the stock market and the talking heads on TV. Last year, they were talking about how the real estate decline would be minimal and that real estate would have a soft landing. When it became plainly apparent that it was going to be more like a crash landing (or just a crash), the media and the talking heads kept saying that there would be no contagion to the economy. Now that we indeed seem to have an eensy, weensy little bit of contagion (as in the 5th largest investment bank crashing), now the stock market is skyrocketing because the bottom is in!!! (yeah right) I’m just amazed that this is such an up and down roller coaster ride, instead of one big bang. Of course, I understand that the market had big fluctuations and a lot of turmoil before the crash in 1929 also. At any rate, things just don’t feel that bad.

In addition to all this real estate trouble, the US has other problems that make the real estate bust look like a minor incident. The fact that the country is totally broke and just printing funny money for an ever-increasing number of social programs borders on insanity. Add to that that the consumer is broke and in debt up to their eyeballs at the same time the equity in their home is vanishing. Then consider that the boomers are getting past the 49-54 year old age range, which is when people spend and invest the most money. Just that will absolutely result in a decrease in demand for stock in the very near future. Finally, throw in a huge bubble of people (baby boomers) that are nearing retirement and will be using an increasing amount of healthcare and getting social security (when the magical social security lockbox has been unlocked and emptied by the morons in the congress). If that doesn’t spell trouble, I don’t know what does.

Mike