It took a whopping 0.5% rate reduction to generate a 200 point rally in the market on lackluster volume.. means if the whole 5% were to be reduced we get a maximum 2000 point rally.. but then the markets will panic..
so.. we have a MAXIMUM 15% upside from here.. BUT then rates are NOT going to ZERO ever..
Look for a prolonged BEAR market across ALL asset classes.. except maybe ENERGY, ENERGY SERVICES and PRECIOUS METALS..
Subprime woes will accelerate .... will bottom in 2010.. and then housing goes DEAD..
I agree. I was listing to Soros on my i-pod and he was saying how we loan on our collateral and allot of this debt has none. It's credit card debt on second third mortgages that was used to buy pizza's, movies, cars. The sub-prime rate is 200% higher than normal and believed to be going higher in the next 18 months. These foreclosures will spill into the rest of the housing market. Inflation in china is slowing down there purchase power after three interest hikes and there saying there will be anther one soon. Growth is slowing and that seems to be the future. Good luck to all investing, kevman.