Bulls,vs.,Bears,This,Fight,and finance, share, loan It's Bulls vs. Bears in This Fight; and the Winner is...


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In the bulls' corner...the U.S. government, the U.S. Federal Reserve, the Secretary of the Treasurer, unemployed Americans and those that fear the loss of their jobs, companies struggling to survive, banks with bad loans and wishful thinkers. In essence, the majority of the population.In the bears' corner...old-timers who have followed the stock market for decades, doom and gloom types, gold bugs, and technical analysts, those who lived through the Great Depression and those who didn't make any money during the boom times.Bulls come out punching: The government pulls out all the stops...reduces interest rates to zero, bails out banks, bails out automakers, bails out the world's biggest insurance company, creates huge infrastructure program..Bears come out punching: American consumers are tapped out...they have no money to spend and banks will not lend them more. House prices collapse. The stock market collapses 7,724 points from its high, or 55%.Bulls out again: stocks up 21% in less than a month. The Fed gets ready to drop money from helicopters.The bears' turn: "We'll fake the bulls out by moving stock prices even higher, letting the bulls think they have won, before pulling the floor from under their feet again."My storytelling aside, dear reader, when the stock market crashed in 1929, stock prices fell 48% from their peak. The rally in 1930 brought stock prices back up 50%. At this time, the majority of Americans thought the worst was behind them and, bang, the stock market collapsed again and the Great Depression of the 1930s started on its merry way. It's too early to call the outcome in my story above, but if I were a betting man, you know I'd be putting my money on the bears.** Michael Lombardi is editor of the new "Michael Lombardi's Monday Morning Profit Forecaster," the first issue of which came out two days ago. To learn more, go here:http://www.lombardipublishing.com/ads/profit_forecasterb/index.asp Michael's Personal Notes:What's worse than one struggling company? Answer: putting two struggling companies together. This morning, it was announced that Pulte Homes, Inc. (NYSE/PHM) is buying Centex Corporation (CTX/PHM) for $1.3 billion in stock to create the largest U.S. homebuilder. I often don't understand CEOs. Instead of spending their time trying to make their own operations efficient and profitable, they prefer to spend their time on mergers and acquisitions. New home-building is still dead. Until a big dent is made in the existing inventory of unsold homes, pressure will continue on new homebuilders. Pulte and Centex? I thought both were good short candidates at their current stock prices. Where the Market Stands:Stocks taking a breather from their bear market rally advance, while gold contracts at the same time. After a strong run-up, the retraction in gold bullion prices was widely expected. Gold may be getting close to the bottom of its correction. (For the benefit of new readers, I see gold as being in an overall bull market and stocks being in an overall bear market.) The Dow Jones Industrial Average is down 11.3% for the year.What He Said:"What group of stocks are next to fall in light of the softening U.S. housing market? The stocks of companies that sell retail products to the American consumer, I believe, are next on the hit list. Many retail stocks are already reporting soft sales. In my opinion, they haven't seen anything yet in respect to weaker sales." Michael Lombardi, PROFIT CONFIDENTIAL, August 30, 2006. According to the Dow Jones Retail Index, retail stocks fell 35% from the summer of 2006 through November 2008.Profit Confidential---http://www.profitconfidential.com/LOMBARDI PUBLISHING CORPORATIONNews, Analysis, and Information Services Since 1986.One Million Customers in 141 Countries.Lombardi Publishing CorporationFinancial Publications Division350 Fifth Avenue, Suite 3304New York, NY 10118-3304---Copyright 2008; Lombardi Publishing Corporation. All rights reserved. No part of this e-newsletter may be used or reproduced in any manner or means, including print, electronic, mechanical, or by any information storage and retrieval system whatsoever, without written permission from the copyright holder.

Bulls,vs.,Bears,This,Fight,and

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