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Chuck Jones paints too rosy of a picture of the Economy

Most everyone is aware of how the markets tanked last week and now are somewhat struggling. I am still checking my 401k every day or two and I am not really doing anything much as a result of the markets, but I am keeping an eye on things. So, the big question for me right now is, do I believe Greenspan? Greenspan was in asia not long before this whole market downturn happened and he said that there could be a recession this year.

Of course, for some people, even the faintest whiff of recession can make them throw the baby out with the proverbial bathwater when it comes to investing. So a selloff was not exactly rocket science. Similar to other downturns, many of the trades were automatic as a result of stocks tumbling down to preset levels etc. But, here we are and now the market is just sort of going up and down a little like a fishing baubble.

All that said, an article I read on MSN money was interesting. http://articles.moneycentral.msn.com/Investing/Extra/GreenspanVsBernanke.aspx

A quote from the article really struck me, "This time, any difference between Greenspan's remarks and Bernanke's doesn't seem to have left the market with too much lasting damage. 'It just so happens that (Greenspan) made one comment that ends up being right in front of a big stock market move,' says Charles Jones, a finance professor at Columbia Business School. 'I think that's more coincidence than anything.' "

Now, I know that this guy is a professor, but I really think he is part of the wishin', hopin' , and prayin' crowd that thinks that these numbers can continue this way for ever. And just because Google http://finance.google.com/finance?q=goog went up on news that one analyst thinks its a good buy as a result of the market correction doesn't mean that is the same for everyone.

I personally don't think that this correction is over. The picture Chuck Jones is painting leads you to the conclusion that this correction is a coincidence. I don't think that is true either. I think that it was a house of cards just waiting to collapse and Greenspan dropped a brick on it. Now I'm just wondering how much of a correction this will turn out to be; with the mortgage/lending crisis we are dealing with now (Sentry closed down something like 60% on Monday), I think we still have some dark days ahead.





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