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| There are no benchmarks in regard to the current environment.
1. Those who wish to compare the current atmosphere to the great depression are trying to compare apples to oranges.
2. The structure of our economy is entirely different.
3. The expectations of people are different
4. I bought my first stock in 1959 or 1960...can't remember..IF I WOULD HAVE ASKED MY BROKER TO GO SHORT..first he would have scared the He$$ out of me about borrowing someone else's stock....although an experienced fellow in a small town, I DOUBT he knew how to write the order to go short!!!
5. There were no index funds.
6. There were no computer programmed trading.
7. There were no option programs.
8. The ONLY SHORTS WERE EITHER DEALERS OR SPECIALISTS.
9. It was a rigged game, just as much as today, against the public. When I say rigged I mean: transaction fees, odds favor the house moreso than at a casino & Wall Street was on a constant search for new blood (suckers).
10. YOU had to do your homework or buy solid companies with top notch management.
11. In 1966 & later the merger mania began....LingTemcoVaught for example.
Presently, we DO HAVE A SPECULATIVE FEVER. Some of these folks act like pure amateurs. If they hear a rumor...they all buy....if the story is proven false...they all sell....in between the computer programs reinforce the moves....
The stock market volatility reminds me of topping wheat or soybean markets....wild action...churning...I recall in one topping bean market a 5 cent spread between bid & offers for a short period during one session...it was a top.
A lot of these bloggers are going overboard on the debt...the core concern is "debt service" ....Europe is in bad shape. Their demographics do not support aggressive economic growth...Germany is their growth engine. Japan has lousy demographics......OUR problem is can we support our debt service?? Our economy may require another shot of stimulus. But the game is close to being called.
Energy remains short (overall) ..demand for basic food grows ...corn is no longer limited to feeding livestock....same for soybeans....our demand is less elastic....
I remain bearish on the stock market, but am prepared for a sharp spike at any time....grains and oilseeds appear no hope....except there is demand......the important consideration is the change in our overall demand profiles...the world is changing rapidly and so is the USA & not necessarily along with the rest of the world.
Mother nature is still the key. If Bernanke has any nightmares.....at this time one of his worst would be a reduction in crops due to weather...he then would have a dandy situation on his hands.
There is a floor under these markets...I do not quite know where....but look at the recent past....we have been clobbered with a strong dollar...negative attitudes....panic in some quarters.
I will have more comparisons in the newsletter tomorrow.
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Useless Rhetoric-we are swamped in it.
