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Originally Posted by Slava
I don't see anyone arguing that the markets are all completely recovered here though? Instead the argument is that we've seen a correction (as evidenced numerous times in this thread), so while things are stable/stabilizing at this time the idea that we would see a correction from these levels doesn't make sense. I know that there are "experts" out there, and frankly we've seen their projections over the last few years. IIRC David Wolf from Merrill Lynch put out a projection for the year (a couple of years ago?) that had the housing market absolutely cratering. We either survived that crash, or I just missed it?
I'm not arguing that we can't go down from here. We can definitely go down, and we'll either go down, up or stay the same. Its just that the doom and gloom is an easy target at this point in the economic cycle and while the recovery is a long and sometimes tenuous road that doesn't mean that we are destined for the days of a painful correction.
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They aren't completely recovered and will eventually experience further downside that is almost a certainty. What is going to make this market go up? David Wolf is hardly an expert but when Bill Gross speaks you have to pay attention. Nevermind the experts though as you can get a good idea from talking to your neighbors who can't sell their homes or realtors that have taken up going door to door to try to drum up business. I don't think you can call it a bubble but just a slow leak of air that could go on for years to come.
You were saying that this should have happened by now as this thread is 2 years old but we have likely seen phase one of a two or three phase correction that could last 5 years or more. The US bond market is one of the biggest financial bubbles ever. Investors are finally waking up to the enormous risks in the financial system by selling government debt. As a result both short and long term interest rates will likely surge in 2011/2012 and reach double digits in the next few years. So....you get the picture....I don't know if it is doom and gloom or being intelectually honest.
We now live in a world where governments print worthless pieces of paper to buy other worthless pieces of paper that combined with worthless derivatives, finance assets whose values are totally dependent on all these worthless debt instruments. Thus most of these assets are also worth-less. "Paper money eventually returns to its intrinsic value Zero" - Voltaire 1729.