Difficult MarketIn my opinion, the US is close to an economic collapse if they don't get their trillion dollar debt under control. Their S&P credit rating is really in jeopardy and nobody seems to think a collapse is possible. They are at $14.3 trillion and rising in debt. The Federal Chairman recently warned about a crisis but no one has any concrete solutions. The following is also of interest:
- a failing European Union
- inflation and uncontrolled growth in China
- slow recovery for Japan
These are things we need to be concerned about, including:
- steady high oil prices
- rising food prices
- ongoing realestate problems in US and slow new homes
- political back lashes and unrest (harder to obviously predict)
- a 2 year bull market behind us
The Regan and Bush adminstrations have totally destroyed any control of corporate USA. The record earnings are the result of:
- low interest debt payments
- not enough taxation (which is all over the news)
- slow repayment of government bailouts
- grossly underestimated analysis reports (Why are analysis so out to lunch on earnings? - that's their full time job)
It may be temporary but it may also be a slow and painful decline.
Sell in May and go away!