Tuesday, October 25, 2011

Recession, incoming

After debating the onset of the last recession when most market pundits denied the risk back in 2007/2008,  here we are again, a short three years later, staring at the noisy conflicting data.  But the conclusion is undeniably clear: a recession is incoming.

October 2011 saw a powerful rally of 16% from the intraday low on Oct. 4 to the intraday high of Oct. 25, a rally powered by a blind belief that EU will figure out a way to solve its debt problems.  Then came the news that EU really hasn't figured it all out until its leaders meet in 24 hours.  Such nail-biting suspense, for an investor with a longer horizon than a few minutes/hours, why does one even bother to risk any capital?

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