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It seems that people start ignoring again the accumulated debt. This is what I was thinking about when I was telling you that the financial debacle is not here yet. The average investor is an irrational specimen. When everyone buys he jumps on board as well and when the sell off amplifies he sells all his portfolio holdings and starts complaining about the incurred losses. You probably know that you have to buy when most people hesitate or are scared and sell when everybody around you is excited about the big potential profits. Easier said than done! As an economist I always watch the fundamentals of the markets to figure out the big picture. It helps me catch those long term waves which are the most fruitful ones. But to make money in the short term there is nothing better than the technical analysis. Take as example the current situation! It is obvious that nobody can live on credit all the time. At one point the borrower will hit the wall and the creditors will not only refuse to lend but will put pressure on him to repay his debt. He will see himself obliged to work harder and cut his expenses for repaying the loans or to go bankruptcy. The last option is the worst case scenario as after a bankruptcy he will loose his assets in covering his liabilities and he should start from zero without been able to borrow. The United States are in such a position now. However, there are many short term factors which will postpone the end of the happy borrower. Here comes the technical analysis to help us figure out how long yet we can enjoy the current bull. More on this in my next commentaries.

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