Popular Stock Market e-Letter Profit Confidential Bearish Going into 2011… Bearish on the Stock Market and Economy

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Profit Confidential, the popular stock market e-letter, presents three reasons for being bullish on the stock market: corporate earnings for the third quarter will surprise on the upside; a cloud of investor pessimism still prevails over the market; and stocks are simply attractive compared to U.S. Treasuries that offer little to no return and that may be our next bubble to burst.

Profit Confidential, the popular stock market e-letter, presents three reasons for being bullish on the stock market: corporate earnings for the third quarter will surprise on the upside; a cloud of investor pessimism still prevails over the market; and stocks are simply attractive compared to U.S. Treasuries that offer little to no return and that may be our next bubble to burst.

But, in his report, Michael Lombardi turns bearish for 2011, saying, “I have great concern towards the U.S. dollar, am concerned about its possible collapse (which would push domestic interest rates up, sending the stock market down), and see the weight of the U.S. housing market putting additional pressure on the economy.”

Lombardi continues in Profit Confidential, “The National Bureau of Economic Research said earlier this week that the worst U.S. recession since the Great Depression ended in June of 2009. I agree with this. But the U.S. economy is still so fragile, so very delicate; we could lapse back into recession if the cards are not played right.”

According to the article that appeared in Profit Confidential on Friday, Lombardi believes, “We need to understand that home construction and the residential real estate market are the backbone of our economy. As I have mentioned before, the price of homes in the U.S. fell 15% during the Great Depression. From its peak in 2005, the price of homes has fallen in America a devastating 28%—almost double the decline rate experienced during the Great Depression.”

The reports says, “U.S. rates for 30-year mortgages have sunk like a stone to 4.32% this week, the lowest rate since 1971, according to Freddie Mac. Yet, housing prices continue to fall, because there is no demand for homes and there is too much inventory coming onto the market.”

Lombardi says, “I believe U.S. banks have plenty more bad housing loans on their books to eventually deal with and clear out. The banks have been taking homes back (foreclosing) so much that they have actually slowed down the foreclosure process, because they do not know what to do with all the homes they have already repossessed.”

For the full report, visit http://www.profitconfidential.com

Lombardi continues in Profit Confidential, “GMAC Mortgage, ranked fourth among U.S. home-loan originators, announced this week that it was stopping foreclosures in 23 states. I can sense other mortgage companies have slowed down their foreclosure process as they deal with their present bloated inventory of empty, foreclosed homes.”

According to the article that appeared in Profit Confidential last week, Lombardi believes, “Some seven million homes in the U.S. are now sitting empty, have been foreclosed on, or have been walked away from by their owners who are in the foreclosure process.”

Lombardi says, “Our economy cannot get better until the housing crisis is corrected, and this could take years. I’m concerned that a second round of bank ’loan cleansing’ via foreclosures in 2011, coupled with the weakening U.S. dollar, will place a heavy burden on an already fragile economy. Hence why I’m bearish going into 2011.”

For the full report, visit http://www.profitconfidential.com

Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com

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Bill Curry
Lombardi Publishing
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