Why people should get out of the market

I think it would be safe to say that I have been a negative person my whole life. Some people would say that I come by it rightly, those are the people who have met my father. But this life long pessimism is not why I think the market will drop even more in the 3rd and 4th quarter of this year. The following 10 reasons are why I am a Realist.

1. The Sub-Prime mess is still being dealt with, and the Alt-A and ARM mortgage mess is going to hit in a huge ugly wave of foreclosure in the next 6-12 months. (We could go on about this for awhile...)

2. Bond Default rates are very high, and are continuing to rise. (Defaulted bonds are the corporate way of saying I can't pay my mortgage).

3. The governments of almost every country are supporting poor fiscal responsibility and encouraging lazy people to continue in laziness (this doesn't stimulate an economy no matter what any politician says).

4. The fall season has historically (I know, I know, the past doesn't dictate the future) been the worst time for the Stock Market. Just about every recession we have ever had started in October or November, including this one.

5. The Short Sellers have covered their positions and shown less interest throughout July. This is a sign that the upward movement is uncalled for and will begin to falter.

6. Insiders for companies are selling their shares in droves, to the tune of 6 to 1 (seller to buyer). If the people that run the companies can see what is going on better than we can... then what do we see here?

7. While company profits have looked good this last quarter, this is largely due to cost cutting, not increased revenue. There is only so much you can cut... what will they cut next quarter?

8. Consumer Savings is going up (this isn't bad, it just means that people aren't spending, thus not 'stimulating' the economy).

9. Un-employment is still high. And if one were to do a little math on their own, you would find that the reported drop of 0.1% (down to 9.4%) was reported poorly by the media. The real unemployment rate is closer to 9.8% (a rise of 0.3%). This number also doesn't take into account the large number of underemployed people (people that have lost their job, but are currently working fewer hours or at less pay).

10. The Dollar is weakening, the Deficit is soaring, and Politicians think this is a good time to present a Health care overhaul that will increase the Deficit further, which will weaken the dollar more...

These things do not bode well for our financial future...