It’s been a while since I posted anything to the site. My life has been extremely busy with family, job and a number of other things. I’ve been very quite on the investing front as a result of this.

We are currently in very difficult times in the markets. They are moving dramatically up or down on a daily basis and the United States is currently in a severe economic downturn. As a result of the limited amount of time I’ve had to focus on things, coupled with the dramatic volatility in the market I haven’t made many trades.

However, that doesn’t mean that I have not been watching what is happening. With the recent collapse of Bear Stearns and the dramatic moves by the Federal Reserve to take debt onto it’s balance sheet and another 75bps cut in the target rate, I am becoming quite concerned that we are on the brink of recession.

Employment is moving in the wrong direction, inflation is moving in the wrong direction and most other economic indicators are showing a severe downturn. While it will take six full months to declare an actual recession, I think it is quite possible that we are in the beginnings of one now.

The continued decline in the dollar vs. other major currencies is also quite troubling. While this decline is favorable to exporting goods, it is wreaking havoc on the dollar’s global authority. The Euro is trading somewhere around $1.57, Gold is north of $1,000 and Oil has pierced $115, inflation is beginning to truly rear it’s ugly head.

Declining currencies, heavy inflation pressures and an overall weakness in the economy are all very troubling. For the stock market it doesn’t bode well for the next few months. We will have a nice jump once things turn around, however until then it will remain very, very choppy.

For me, I’m planning to review a few April or May positions and potentially get back in the game. My travel schedule will be diminished over the next month or two so that allows more time to focus on the economic factors that influence my trading. I will remain cautious.

If you have your own thoughts, please feel free to comment. I would love to discuss them.

Categories: Investing