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Wake Up! The Us Consumer Is Not Coming Back

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Don't Buy on Dips, We're at 'Medicated Highs': Strategist

Published: Thursday, 27 Aug 2009 | 2:07 AM ET

By: CNBC.com

Investors need to know that the current market moves are not based on fundamentals, Kirby Daley, senior strategist at Newedge Group, told CNBC Thursday.

"Be very careful when you are playing these markets that aren't based on fundamentals, because when it starts to come back, you have no idea when to get out, " Daley said on "Squawk Box Asia."

Investors are not being realistic about the recovery scenarios in Asia and the U.S., ignoring the fact that the U.S. consumer is the main driver of global growth and faces big headwinds, he said.

"All of these recovery scenarios are based on this belief that the U.S. consumer, magically somehow, will be back in the face of higher unemployment, credit that is tightening, the dissemination of wealth and lower incomes," Daley said.

Investors are only enjoying a "medicated high" at the moment and that the worst advice possible would be to buy on dips, he added.

"The problem is you don't want to take a loss and before you know it, you realize this was a bear market rally and you are down 30-40 percent," he said. "What do you do then?"

The video is worth a watch. A few minutes in he's really trying to shake the viewer and make you aware the recovery is not going to materialise because of structural changes going on in the US. The US consumer is dead.

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Guest KingCharles1st
I thought there was a "recovereh"...?

And house prices always go up? :unsure::blink:

Eric- you are soo DERRR

Stock increases will kick start the housing and consumer economy- with the resultant cash fest of imported goods- thereby seeing a huge upswing in BDI and a resultant cementing of the high stocks position- YOU ARE SO THICK :rolleyes:

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