Dont believe the Hype

Now there was a big rally yesterday in the stock market. But things are coming back to earth today as Freddie Mac just slashed their dividend. I find it funny that the market would go down on this news. I mean was that "earth shattering" stuff? Certainly not to you fine people who read this blog everyday. Oh and let me let you in on another secret: theres gonna be a LOT of other financial companies slashing their dividends in the coming days and weeks. Trust me.

I also find it funny that because oil drops below $120 its time to get excited and therefore stocks go up. Think about that people. $120 oil is a good thing for this economy? Heres another little secret: it aint! So come back to me when its $75 and we can chat about how this is a good thing for the economy and the "recovery is right around the corner". Also, tell me when you dont see any more cranes or bulldozers near where you live putting up new residential OR commercial real estate and then we can talk about a recovery in the housing market. Right now? Neither of those things is happening. So dont believe the hype and by all means if you have the urge to buy something in the financial sector, stop! In the name of finance! Hey wasnt that a song? Well not quite but close and just like the economy isnt turning around, these ARENT the Supremes:

Comments

[RPB]

I'll be bullish again when new homes sales show 6 months of "real" increases.

[eric]

What's funny Rubicon is I yelled the same thing at my TV yesterday and wanted to kick the damn thing in. Luckily it was during dinner and I can't reach the TV in the kitchen with my foot!

[Rubicon L]

This oil business really has me baffled and i think it is because of the spin from the muppet shows on FOX B and CNBC. Oil down Stocks up.....there is an argument here that means more dough in consumers pocket, more spending, business up etc which seems to make sense. But the headline reasoning is so flawed i feel like sending some of these guys a macro 101 book. Oil going down and being at "$120 is good" on the surface from $145+ i guess but the reasoning they are giving is worldwide demand going down due to slowing economies. If worldwide economy (the one that is keeping our GDP positive through buying our exports)is going to slow and go in the tank etc then how on earth is that stocks bullish? That clearly signals that the law of diminishing returns has kicked in which means there has to be cut backs in production, output, employment, which in turn leads to lower spending in a 70% consumer driven economy. I could be way off here and would welcome any feedback. Like Eric and Rich asked, i welcome contstructive criticism or enlightenment, please refrain from bashing.

i'm gonna think it o-o-ver