Posts Tagged ‘GM’

Charles Delvalle Here…

Hey Everyone,

Charles Delvalle, here.

You might remember me from Financial Goodness blog and from reading me regularly in Investor’s Daily Edge.

This is my new blog.

And because it is simply a new blog that I put up in about two hours time, it looks a tad “rough around the edges”.

Be assured this, just like the final days of George Bush’s Presidency, will soon come to pass. I have some big ideas for how to take this blog to the next level. And I welcome any input or comments from anyone letting me know their thoughts on getting there.

In other words, what do you want to see on this blog when you come everyday? What do you want to learn? How do you want it presented?

I can be a sarcastic ass from time to time, but the truth is that’s not going to change.

And right now, i’m a pessimist. Because i think this stock market downturn has a lot further to go. But i don’t want you to confuse my longer term outlook with my short term one.

Just because i think stocks have further to fall, doesn’t mean i think it’s going to happen come Monday… or Friday, or even the week after that.

I use technical indicators to give me an educated guess as to how the market will move in the short term. For the long term, i look into over reaching trends in the financial world.

This is what i know, that you, dear reader, may not be aware of…

- Banks will cut back Credit Card balances by Over $2 trillion next year. This at a time when the US consumer is relying more on credit cards just to pay the bills.

- The commercial real estate market is starting to see more losses. It was a profit party there too as regulation and prudence got thrown by the wayside.

- More hedge funds and corporations will go bankrupt next year then we’ve seen in a long time. This will add to the jobless numbers quite significantly. Not to mention all the liquidity that will get squeezed out of the system.

See why i’m so pessimistic? Just because the government saved GM today doesn’t mean that GM won’t continue to layoff nearly as many workers as it would have had it gone bankrupt. All it means are that the job losses will be spread out over a few years and not all at once. Therefore, the impact isn’t as strong, but it lasts a lot longer.

Kinda like taking cold medicine. Your symptoms last longer, they’re just not as bad.

With all of this in mind, i feel that next year might only be slightly better then this year, but overall it should still be bad.

People just have way too much debt that they need to pay off.

But you should know that the seeds of a new “bubble” are certainly being sown today. Ultra low interest rates and a flood of new money will be sure it happens.

Some say the new bubble is US Treasuries. But that makes me wonder what are people considering bubbles? It would seem to me that a bubble takes place over a long period of time. The real estate bubble didn’t take a year, it took a few. And so did the internet and commodity bubbles.

But US Treasuries? The dollar is in a long-term downtrend. I don’t see how there could be a bubble there. All there is is short-term panic. And the panic should come in waves throughout the next year.

Once the panic subsides, treasuries will drop. Doesn’t seem like a bubble to me.

But alternative energy… That, I feel, will be the next big bubble. And it will be fueled by at least four years of positive government help, too.

I’l talk a little more about that next time.

-CD

P.S. I have some big ideas for how to take this blog to the next level. And I welcome any input or comments from anyone letting me know their thoughts on getting there. In other words, what do you want to see on this blog when you come everyday? What do you want to learn? How do you want it presented? Comment below.