“Gray skies are gonna clear up,
Put on a happy face;
Brush off the clouds and cheer up,
Put on a happy face.
Take off the gloomy mask of tragedy,
It's not your style;
You'll look so good that you'll be glad
Ya' decide to smile!
Pick out a pleasant outlook,
Stick out that noble chin;
Wipe off that "full of doubt" look,
Slap on a happy grin!
And spread sunshine all over the place,
Just put on a happy face!”
Put on a happy face;
Brush off the clouds and cheer up,
Put on a happy face.
Take off the gloomy mask of tragedy,
It's not your style;
You'll look so good that you'll be glad
Ya' decide to smile!
Pick out a pleasant outlook,
Stick out that noble chin;
Wipe off that "full of doubt" look,
Slap on a happy grin!
And spread sunshine all over the place,
Just put on a happy face!”
So I guess it’s safe to say we are out of the woods!
No more subprime mortgage woes… no more credit concerns, Job growth is back to top form… The Fed’s mojo is really working its magic!
Of course, the housing data is falling into an abyss as is indicated by the last two pending home sales results as well as a surge in inventory and foreclosure data… but pay no attention!… that of little concern.
Today, let’s just smile.
Seriously now, it is very interesting how the general sentiment of our economic circumstances seem to progress in waves oscillating between the possibility of horrendous economic collapse and exuberant speculation.
There doesn’t seem to be much room in the middle.
I suppose that this is normal, or at least how our markets and our economy have been functioning for a long while but still, you wonder whether that’s not an indication of trouble in and of itself.
After witnessing the many thousands of predictions and outlook and actions that resulted from the churn that started in early August, I think it’s safe to say that even “dyed in the wool” Bulls are now having a hard time ignoring the obvious fundamental effects being brought on by the housing decline.
Still though, these same Bulls and many others persist, latching on to small bits of positive information like life rafts, effectively postponing any conscious acceptance of the inevitable.
There are clearly periods where the sentiment has shifted dramatically.
Like for example this time last year when Greenspan issued his initial “the worst may well be over” outlook and the Gates Foundation took up a widely publicized and substantial position in homebuilder stocks.
Wall Street seemed relieved and the homebuilders surged strongly, some moving up over 40% from their lows.
Of course, that time was brief.
The Gates Foundation sold off all their positions in December (unbeknownst to the rest of the investment community… funny how that happens) and by early February of this year when again it was reaffirmed that the unwinding of the great housing-mortgage mania was truly substantial and that the slowdown we had witnessed to that date was a mere opening act in a much larger production, real estate related stocks retreated, setting new lows.
So what should we make of the current euphoria?
