A combo of the second [we are 12 months in], and that there are some amazing bargains out there for those slicing quick takes. But it is just like last week's run and then the take back at the end. I don't see big traction for a while as there just aren't any good signs.
I mean really, we are waiting on the Obama team to come in and set new policy, we are waiting on the Bush team to go jump in a very large, deep lake and Jay is waiting on Q4 GDP numbers so he can join the rest of the world in acknowledging this year long recession [last one in buys doughnuts, by the way]. So the churn is just going to keep up until all this sets in 35 days and questions are answered as to where direction is.
On one hand we could not have had a worse time for a transition as it puts everyone in doubt, but on the other hand, everyone sees an end to the downward spiral.
Those bargains might not be so amazing, as you put it. We are in uncharted waters. We have not experienced anything like this in 80 years. The oldest generation of Americans was born during the last economic collapse. So anyone calling a bottom is simply guessing. Support levels have been broken, the whole damn thing is built on credit, we have a Fed frantically trying to inflate the currency by running the printing presses 24/7, and there are still individuals out there willing to call a bottom (e.g. Cramer).
In theory, this thing could go to zero. All it would take is for people to lose confidence and pull their money out. How long until Treasury obligations get downgraded? We've essentially doubled the national debt, not the deficit but the cumulative one, to 20 trillion in a year. So before Bush we had 5 trillion in debt, after Bush 10 trillion. Now, after Bernanke and Paulson we're looking at 20 trillion. What is going to pay for that? More phony money? At some point the world might look at the dollar and say it isn't worth what we say it is and then what are we going to do? Not one of these self-proclaimed experts has a clue what might happen next month let alone next year or five years from now.
I stand ready to pull the trigger on every equity I own and load up on precious metals as the dollar turns to toilet paper. Americans have a hubris about them that the unthinkable can't happen here (i.e. Weimar, Zimbabwe). Problem is we the people are not at the controls and haven't been for a century. Our dim witted government as well as Bernanke and Paulson are the ones that decide our fate. I don't hold much faith in these people and even less in the market analysts at UBS, Goldman, or any other brokerage house.
Example: UBS made a major mistake in their overweighting CMOs. The firm was on the verge of going bust in the summer of this year before Paulson spoke of the TARP bailout. I'm sure they have talented people as every firm does. However, one thing to keep in mind is that absolutely no one that we consider market experts, this day and age, has a clue what is going to happen.