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« Some Vacation! | Main | Developing and Using a Trading System: The Case of IGV »

July 31, 2007



I don't see how you can be so bullish at the moment. We are in uncharted waters with housing ...the Case-Shiller Index is off the charts and variable rate mortgage resets peak early in 2008. It's going to take at least another six months to get a sense of the real damage.

We may even be in a recession right now ...UE just went up to 4.6% ...and it usually hits the low spot when the recession begins (lagging indicator). Consumer spending hit 1.2% annualized growth rate for Q2 (70% of GDP).

Further, the Fed's hands are tied for a while. Cost-Push inflation is driving prices up ...if they don't fight the inflation we could end up in stagflation.

Ironically, the only thing that I think MIGHT save us from severe recession is the cheap dollar and globalization! Increased exports may keep us from hitting the iceberg head on. I'm still standing close to a life boat.


Louis -

Good points. I have not taken up the hedge fund and market leverage issue, but it is on the agenda. This week's action has moved it up on the list, of course.

Thanks for highlighting a key question.



Excellent perspective. However, I think you could add into the discussion some perspective on the recent trend of increased market leverage. A number of international hedge funds have begun reporting steep losses and some high visibility buyouts or debt financings have been canceled. On the other hand, valuations aren't bad at all, and corporate earnings have been excellent. I would watch the major banks and how the subprime mess affects their business lending side of the house.

The other big unknown is how much the subprime problems affect consumer spending, the big engine of the US economy.


Thanks to all for their comments. I always learn.

Those who disagree force me to review my analysis.

Those who find something useful encourage me to keep up the effort.

At "A Dash" we do not seek a community of followers. I am trying to write a book for individual investors, so every comment is helpful.



Great to have your insightful comments again. What a week for a holiday


I'm the biggest bear on earth, but we are way too oversold to get short right now.

Bill aka NO DooDahs!

Good to see you back! This market has "buy" written all over it!


This is not just an ordinary correction this market is crashing it is 1987 all over again. Sure the rearview mirror economic data looks great, but just wait to see what is going to happen to this economy following this market crash that is just now beginning to accelerate. Stick a fork in the bull market becuase it's done!

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