I'm officially nominating this the official song of the New York Stock Exchange.
My big question though, is this the beginning of the double dip recession that's been predicted by some or a temporary down turn? Historically speaking a June lull is not uncommon for the Dow, is that what's going on now? I've read analysis suggesting that we're in for another long term bear market and others that suggest we'll be back to a bull market by year end. I really don't know what to believe.
On the one hand my gut tells me that this is a short term correction since there are not apparent indicators driving the market down. Unemployment hasn't spiked in recent months. Real estate is still struggling but hasn't dropped significantly. Mortgage rates are low so real estate might even level off. Speaking of which, how much percentage would I need to save in order to make refinancing worthwhile? Retail sales are up a little. I feel like this is a buyers market.
On the other hand, some of the crazy IPOs recently - see Linked In (LNKD) and Zipcar (ZIP) - are somewhat reminiscent of the tech bubble in the late 90s. The market seems far too speculative - investors seem to be ignoring fundamentals and gambling rather than investing. That makes me a little skittish. Is this behavior going to fuel another crash?
I just don't know which way this is going to go, but will take the advice of Warren Buffet who said, "I am a huge bull on this country. We will not have a double-dip recession at all. I see our businesses coming back almost across the board." He also said, "we simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." Is it time to be greedy? And even though he said, "beware of geeks bearing formulas" I don't think that applies here. It is entertaining though.