The Lion: A Study in Contrasts

[onlooker]

JDH:

Quote by JDH on August 29, 2009

I did nothing all week. I let my cash sit there. It’s still sitting there. And there it will sit until I am convinced that we are at a bottom.

See Wikipedia about the Early 1990s recession    http://en.wikipedia.org/wiki/Early_1990s_recession

The early 1990s recession started with the DJIA collapse on Black Monday of October 1987.

Two years after Black Monday, the Canadian mainstream media was reporting positive news for the Canadian economy.  Toronto real estate prices zoomed back up.  So, in November 1989, I dumped my `idle` cash into a fully tenanted rental property in a yuppie area (Beaches, Toronto), thinking that I had made a very wise and secure investment move.  By 1990, recession came back with a vengeance to Canada via our largest trading partner, the U.S.  By 1991, my yuppie tenants and I lost our jobs.  Out of necessity to feed myself, I became a slum landlord.  I rented out my property to welfare recipients because they had guaranteed rent money from the Canadian government.   

What did I learn from this financial waterloo of mine?

One, if I look at the current 2009 Canadian mainstream news, I will get lots of glowing, positive news about Canada`s economy being in recovery.  Here is Montreal, the malls are not emptied of shoppers.  Montreal housing prices are up.  In America, the DJIA is recovering nicely and will probably go higher.  I should be optimistic on hearing such economic news, but I am not.   

Why not?  Because, there are selected internet websites showing that America’s economic woes are far from being over.  Naysayers say that America still has a smorgasbord of unresolved economic problems – failing banks, rising unemployment, increasing mortgage delinquency rates, sinking dollar, etc…

Therefore, IMO, there will be another stock market downturn for America.  Canada and other countries will again, be affected.

Two, a second major stock market downturn could occur years, not months after the first one.

So, I think you are correct in thinking that the bottom of the American markets and others have not yet been reached.

[yellowcaked]

I tend to see the US and world economies like the story of the little boy who stuck his fingers in the dike in Holland.

http://www.thehollandring.com/hans-brinker-story.shtml

Not a single fundamental thing has changed since a year ago.

Other holes are going to open soon in the damn and there will not be enough Hans brinker's in the world to stop it from becoming a flood.

See Wikipedia about the Early 1990s recession    http://en.wikipedia.org/wiki/Early_1990s_recession

The early 1990s recession started with the DJIA collapse on Black Monday of October 1987.
Why not?  Because, there are selected internet websites showing that America’s economic woes are far from being over.  Naysayers say that America still has a smorgasbord of unresolved economic problems – failing banks, rising unemployment, increasing mortgage delinquency rates, sinking dollar, etc…

Two, a second major stock market downturn could occur years, not months after the first one.

So, I think you are correct in thinking that the bottom of the American markets and others have not yet been reached.