Are you a Bear like me?

It all looks pretty rosy this past week. DJIA manage to maintain above 8000 points and still climbing. KLCI rebounded and stays above 1000 points. CPO is also rebounding and Crude Oil is now above USD50. Banks have passed the stress tests. But I don't know why I still feel so Bearish about the market.

Everytime I look at the news and hear analyst and newsman calling the return to economic recovery and the worst is over, I can't help but feel it's all just smokes and mirrors. As far as I know nothing has actually changed other than the fact that we already accepted the world is facing a recession and are doing something about it.

At the end of last year when the slump was really bad, everyone was guessing where was the bottom and any slight spike would see some analyst guessing that was the end of the bear. In other words, we've heard it all before. When the markets are obviously going down, they all say the bottom is DJIA 5000 or KLCI 500 and substantiate with all their knowledge and jargons about the conclusion. . When it is all going up and they all reverse completely and also with the same jargons and data justifications.

The current good news that I see constantly being forced to our senses is the same I feel. I know all these news are important to 'stimulate' the masses to spend and not save up their paychecks so the economy will be kickstarted again. If you know tomorrow wil be a better day, why bother saving your pay for tomorrow, right? But I feel these news 'stimulants' are actually beginning to convinced the people who are spinning it in the first place. Meaning they actually believe the propaganda they are telling.

People react to situations and when hardships comes, they react by adjusting and adapting their lifestyles. For instance, when people sell their SUVs and buy a Prius to adapt to higher fuel costs, they aren't going to sell back the Prius for a new SUV in less than 6 months even when the costs of fuel have come down. Demand destruction has already occured and the masses find that they can actually live satisfyingly even without the earlier luxury of low fuel costs. In other words, prices may be up but sales volume is still low. So oil prices at the moment cannot be sustained as there aren't as much volume. When countries see that they aren't earning as much revenue even with higher fuel price, they'll start pumping more and more to gain back what is lost. Back to square one. Revenue will still be lower due to lack of consumption.

I'm bearish not because the world markets haven't completely collapse yet as it should but because I feel not enough time has passed before the good news is supposed to come in. Time is important because it will show delayed facts that will turn up about the economy. Perfect example is how time after it has passed shows how bad the US banks have actually failed. Some banks are still failing and are just hanging on by a thread. It won't fail completely due to bailout funds but in terms of business health, it's sick and bed-ridden and needs constant care to survive. More bad news are expected but it'll be played down with more new stimulus-packages. The results of the effectiveness of these new- stimulus packages will never be known anytime soon.

I guess I'm bearish about the world markets is because I haven't seen any real recovery plans actualy taking place or allowed the time to take place and actual results actually prove it works. In stock market time-line, that will be old news for the future. So let's just say I rather be late for the party and enjoy the climax rather than turn up early and realised later there was no party, only a funeral.

So are you a Bear like me?