The Market Psychology

It’s critical to get the market psychology right now.
The struggling now is a tug of war between those who think the worst is over, and those who think the worst is yet to come.

Have a look at these people.
The people that think the worst is over is generally people with narrow sight. They see profits in the companies, they see 4th quarter results come in ok. Things seem fine. They are people who have a vested interest in the worst beeing over, what’s a stock broker to tell you? Or a real estate agent, that the day of reckoning is around the corner? Will they get any sales that way – no. So they don’t even if they think so.

The people who think the worst is yet to come are generally people who take a much broader macro economic view of events. It’s like the difference between asking a meteorologist to predict next weeks weather and asking a beach sun bed renter to predict this afternoons. It’s a matter of different incentives and perspectives.

The current credit contraction is going to be so big it’s hard to even get a handle on.
It is going to be like Japan in the 90′ties.
People are not going to starve.
But they’re won’t be any easy money around no more.

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