Ask Yourself One Question: Who Benefits?

  1. Who benefits from a “failed” (delayed) bill?
  2. Who benefits from getting to buy assets at lower prices?

The answer is not “nobody.”

Maybe that sounds like conspiracy theory, but make a big change in any direction in (pretty much) anything and some people benefit and some people don’t.  It’s just the nature of big changes.  The inflating and deflating of a bubble is no exception.

So who benefits from this parade of falling dominos?  Who wins, who loses?  The answer is known the same way it (pretty much) always is: Follow the money (and power): Those with it, are going to gather more of it.  The rest of us… not so much!

Cheers,
Chris

PS: As readers of this blog know…

…I’ve been out of the market since the end of the prior bear-market bounce, which ended in August (see here). Indeed, in bear markets, I’m only “in” for days (or less) at a time.  The rest of the time is sidelines or short if/when I catch the top of a failed rally. The bear market probably won’t end until 6-9 months before the end of the recession.  We’re not there yet.  But at some point a new bear-market rally will develop.  And the sentiment extremes we’re getting now have cocked the hammer.

PPS: Today represented a 90% down day (and then some).  It was the largest percentage drop in some indexes ever and the percentage declines came in around the max percentage declines of the prior bear market (the one that ended in October 2002).  How much?  About 9% on the NASDAQ and S&P 500 (stats here: summary, volume leaders, gainers, losers).  But declines do not end in selling, they end in buying.  The buying has not come in yet (but it will…  same as ever!).

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