richmcn

How Oversold Are We?

I thought prudent man had some good points. Deleveraging is not what is going on in the market, more like troubled debt restructuring. Deleveraging is where you take your cash inflows and pay down your long term debt, legitimately. Troubled debt restructuring is where the borrower can't pay and you settle for pennies on the dollar. The credit market is discounting this like by x percent, the election uncertainties both national and local by y percent and the coming deep recession by z percent. The stock market gets the residual! So, caveat emptor. We are not out of the woods yet and able to go back to some sort of statistical normalcy and range bound trading.