This week represents the calm before the storm. One last little breath of good news before we all settle in for another nightmare in our financial markets.
The Dow is sitting at about 9800 right now...it may rally to 10,000 this week, maybe not...but it's not the time for nickel and diming the market. This is a warning, get out of anything risky this week, it will probably be your last chance for quite a while to do so.
Behind the scenes right now, the real panic is starting. Small and medium sized banks are scrambling to unload a ton of commercial real estate, and they're finding no buyers to hold on to overbuilt strip malls and liquor stores. It's essentially the same situation we had last year...when everyone wants to sell a particular asset at the same time, that asset becomes valueless.
I may do a post about the mark-to-market and the effect on a bank's balance sheet, but that's a discussion for another time. In short, it's a new form of accounting that banks must do...and it's going to cause a whole lot of banks to fail.
It's going to start a chain reaction, which will hurt the markets, especially the stocks.
So...if you have your 401k in a lot of growth funds...it might be time to start trading those in for some bonds or money markets.
When I say it might be time...it is time...the time is now. Get on it, don't say I didn't warn you.
I'm not calling the top yet, but I am saying that it will happen before this week is over.
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