Milan Momirov

Oil, Gas, Electric Cars, the Market and the Economy

It’s a little late to be signing up to the Armageddon notion at this point. On July 11th, the S&P dropped to a level it first crossed (post dot.com bubble bust) three years earlier. It's just the fourth three-year S&P pullback in the last four decades. The most recent S&P earnings estimates produce a 2009 P/E of 11.6. This palpably implausible number indicates that investors collectively disbelieve the estimates. In other words, everyone agrees the outlook is very lousy.

Certainly one can imagine the global economic condition getting worse, much worse. But absent more solid evidence I think it more likely that the credit-bust pig is indeed passing through the python. It is a bigger pig (and a longer python) than was imagined at the first swallow in July 2007, but that’s par for the course.

Recovery will come in six months. No, I don’t mean in February 2009, I mean six months from today, whenever today is. That’s the standard prediction, which, repeated often enough, eventually comes true.