The rally that wasn’t
- Jim Cramer called the end of days. He’s widely considered such a dope that whenever he says something peoples’ first reaction is to fade his advice.
- The Federal Reserve is now letting non-financial enterprises step up to the trough. I give credit where credit is due around here – Nouriel Roubini called this one last week on the RiskMetrics webcast.
- More credit: Henry Blodget and Company have been saying web advertising would take a hit, and they’ve been saying it for a while. You can continue to question the thought, but while you’re pondering Facebook’s COO says the web needs a new business model (albeit late), and VCs are still trying to sell free. Results from the second half of this year will certainly shed some light on the subject, but I wouldn’t bet against the Alley Insider right now.
- The rich are hurting too, and “the rich” includes institutional investors like pension funds. Take their actuarial perspective towards funding, throw in an alternative investments market including hedge funds and private equity (that have either gone neutron or can’t find an exit with flashing neon signs), and then lop on top an S&P 500 that has (as of today) been flat for a decade, and you’ve got a recipe for retirement ugly.
- Bad credit: Mortgage equity withdrawals closed in on zero for the second quarter of this year. I’ve heard more than a few stories about equity lines of credit being shut down even when there has been no drawdown at all. The good part of this is people won’t be digging themselves deeper into debt at a time when they should be concentrating solely on getting out. The bad part of this is that the consumption-based economy will suffer. For the rest, there’s always eBay and Bill Me Later.
- Government gives handouts, but previously hat-passing Wall Street is now going to say no thanks? No wonder there was so much pork in the bailout bill. Congress can’t seem to get much right, and their timing is just as bad. Good thing they’ve got the blame game to fall back on.
And last but not least…