Going into the Labor Day weekend, I realize more and more: key stock indices have risen on the Fed’s unprecedented monetary stimulus (five years of artificially low interest rates and trillions of dollars in new money printed). But now we have dismal economic growth and the anemic corporate earnings that accompany it. Sooner rather than later, this stock market will experience a regression to the mean. Be careful about this market.
What He Said:
“Any way you look at it, the U.S. housing market is in for a real beating. As I have written before, in the late 1920s, the real estate market crashed first, the stock market second and the economy third. This is the exact sequence of events I believe we are witnessing 80 years later.” Michael Lombardi in Profit Confidential, August 27, 2007. A dire prediction that came true.
This article is brought to you courtesy of Michael Lombardi from Profit Confidential.