Mark down the date: Thursday, July 26th, 2007.
That's the day the market finally realized that the subprime loan crisis is real, and the housing market bubble has indeed burst.
Those conclusions could have reasonably been reached months ago; maybe even a year ago, or more.
Honestly, I'm relieved. The threat is over, because the reality has arrived. And now that's its here, we can all deal with it, and move on.
Is the market going bearish? Was "Dow 14,000" the top? Is a U.S. recession coming? Will the Fed finally cut rates? Is global growth finally going to slow down?
I don't know.
I'd guess we are due for a "correction", and that the market will continue to whipsaw from day to day. But really, I don't know, and anybody that claims to know is lying. Sure, they might end up being right, but they really didn't know. There can only be guessing, and some people's guesses are more educated than others.
I can tell you two things:
If experts say something is going to happen, don't dismiss it because it doesn't immediately manifest itself. Experts by definition are more observant than the rest of us, and therefore tend to be "early" - and complex problems usually take a while to unwind.
And, if days like today can scare you out of the market, look at this chart first before doing anything.
Unfortunately, those are both backward-looking statements, and the market only takes bets on the future.
But that's just an example of why the market is so great:
Nobody knows.
