Friday, September 23, 2011

The Market Collapse of 2011-2012 Has Started

I don't often blog but I must get on the record that 2011-2012 will look a lot like 2008 to March 2009. Currently the Federal Reserve has "Operation Twist" in play where they buy longer dated notes and bonds which drive the long end of the yield curve down. Today the 10-year note is at 1.76% and the 30 year bond is at 2.73% which are all time lows. Most people understand that rates are historically low the problem is that banks are unwilling to lend because they need the free money from the Federal Reserve to stay in business. Not all banks but the big money center banks namely Citibank, Bank of America, and Wells Fargo. In my opinion these banks will fail in time. I feel right now it's time to go 100% cash just like back in 2008. Attached is a chart of the S&P 500 today which looks eerily similiar to 2008 and there's not much support below 1050.

Consider yourself warned! When the bear takes a dump it falls quickly and don't think bond funds are safe either.

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