Friday, August 3, 2007

Can we trust the numbers or the reporting?

The U.S. stock market is in choppy waters and no wonder, one hedge fund after another is melting. Trouble in the derivatives market is spreading at an unknown pace but I’m sure institutional investors are seeing the damage spread through their bottom lines.

On one hand a number of companies are reporting double digit percentage rises in earnings while US jobs come in weak and housing is looking worse, but consumer sentiment is soaring. I’m not sure what to make of it all but I smell a little B.S. in the air.

Everybody who’s paying attention knows the shit is about to hit the fan and I don’t just mean a little bit, I mean enough to get on everybody. Bad news drives the market down hard. Is it any wonder? Everybody who knows better has their finger on the sell button. But the market powers back up with schizophrenic swings that leave me emotionally drained by the end of each session.

What gives? I’ll take a guess, fear and greed. We are all waiting for that next hedge fund to announce they are going off a cliff and taking the rest of the market down with it, as most of us know a major re-pricing of all assets is due.
But we all, including me, keep jumping back in for that one last bit of profit.

Here’s hoping the collapse doesn’t come over night.
Vern

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