Reckoning Time?

The IBM / AMD insider trading news reminded me that i’d meant to get out of my stock positions this week. Somehow i got caught up in some other things, and… forgot.

It also made me go back and read what i’d written earlier in the year. The traditional low volume period of the summer is now over, and it’s time to see if there is going to a period of uncertainty. Back in August i wrote:

Personally, i’m guessed that nothing dramatic would happen during the summer, and it would October before we’d see if the system had enough to drag itself over the cusp, or fall back into the pit. Perhaps that’s still a good guess, and this is just a little wobble.

And, seeing as we are now a couple of weeks into October it’s tempting to think that it’s all good. However, the general thesis is that despite Goldman and JP Morgan managing to get rich by engineering a rally, and doubling down with government money, the fundamentals in America are still drifting downward: unemployment continues to rise; the next wave of foreclosures is coming in; commercial real-estate is sitting idle; intermodal rail traffic is still declining; trade deficit is still getting worse. Hardly a feel good story of growth and recovery.

Still, there have been a bunch of nasty stories (insider trading, GE bad results, Citibank loses, etc.) that could have been enough to change the sentiment, and the DIJA is hanging in there around 10k. It’s not clear what it will actually take to break the rally, but seeing as so many people are saying that it’s got ahead of itself, it does seem somewhat inevitable.

For reasons that don’t really bear much scrutiny, i’m going to say that if it’s not Monday or Tuesday (19th or 20th) then it’s going not going to happen for a while. The fight against reality will rage on!

2 thoughts on “Reckoning Time?

    • I know! It’s so unfair… it’s almost enough to make me think that happy times are here again!


      There was this great part in ‘Conditions’ where Engels is talking about how business is ruined ever 6 years, through over building of production capacity. Seemingly on a regular cycle. He even (correctly) predicted when the next would start. Then this week i was reading some bollocks that Greenspan had thrown up, where he complained about the inherent instability of the modern system.

      The funny part is that all our magnificent progress has reduced the cycle down to the three years. 🙂

Wise words...

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