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B4 the Bell, Weeeek End Thread


Guest yobob1

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Welcome to B4 the Bell. A looong weekend for the bulls to contemplate their next move. I think it was LLD that said we have nothing to look forward to other than pre-scam week. Which of course is followed by scam-o-rama andthen pre motnth end and of course the month end tape painting. That leaves about 2.4 hours of actual trading for the month of September. Most times I would agree, but I think the bulls had better be wearing a cup this month. I see many inside pitches coming.

 

Intel said that they underestimated the weakness in retail or lack of "gadget" buying. Discount retailers are taking it on the chin as the poorple are forced to allocate more of their dwindling resources to everyday expenses. Neiman-Marcus is doing fine thanks to Bush's tax cuts. "Oh Buffy isn't that fur lined blender to die for! Say, have you seen my pussy?" Detroit is screaming "take my cars, please!" Housing inventories are on the rise in most locales as sales rates slow and builders keep building. As Brisbane Bear noted in his Australian location, small businesses are dropping like flies thown out into the Arctic Winter. I see exactly the same thing occurring here. The "death rate" is far outpacing the "birth rate".

 

The point is that the economic recovery myth is ready to implode. I don't think there are enough lies about to cover up what people are being exposed to on a daily basis. My guess is the pre-announcement period is not going to go too well. Intel is just the tip of the iceberg. The matrix, 990N, Al and his pals, and Shrubco are going to be fighting tremendous headwinds from here on out. I think Mr. market can and will win at the end of the day. But then I still believe in Santa. :P

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With all do respect Yobob, and ya know I respect ya, The stock market can do anything. I do believe that there might be some more up, perhaps even quit a bit more up before we really drop.

 

Just so everyone knows, My long term position on Mr. Market has not changed. Sub 4,000 is coming. The route it takes to get here???

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MH posted a 3-month version of this chart some time ago and I thought I'd look at the 10-year version--TNX:IRX

 

Amazing--I'm not sure what it means(carry trade over?) but it's pretty extreme!

The Fed funds futures predict a 2.0% rate by December --

 

Fed funds quote

 

Mad Al's bond/dollar pool chose to believe yesterday's upbeat employment numbers. But that creates a "too many plates spinning" problem for Mad Al.

 

Given the "strong data," his "transient soft patch" theory now requires that he continue to "withdraw accommodation at a measured pace."

 

When short rates were doubled from 1% to 2% in 1937, it crushed the economy and stock market.

 

Is it going to be any different this time? Not really. After the recession bottomed in 1938, an orgy of Keynesian borrowing and spending commenced, in anticipation of the coming war. The response will be the same this time round -- trillion-dollar deficits as far as the eye can see.

 

After all, it's only peachback paper. :wink2: :cry:

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With all do respect Yobob, and ya know I respect ya, The stock market can do anything. I do believe that there might be some more up, perhaps even quit a bit more up before we really drop.

 

Just so everyone knows, My long term position on Mr. Market has not changed. Sub 4,000 is coming. The route it takes to get here???

Ha! And they said I get no respect! :lol:

 

If you'll read my carefully couched words, you'll note I simply said the headwinds were going to be extremely strong. I'm not predicting a crash or even a very strong downtrend (before year's end, though post election is still up for grabs) because the reality is that this market is being bought by whom ever for what ever reasons. Well I guess we all know what the reasons are, it's just the whom ever that is mildly in question here.

 

The problem with the kind of manipulation we are aparently seeing here is that it is bound to end very badly. I do not believe in infinite support and when the support is withdrawn there is likely to be an enormous vacuum underneath price.

 

As to sub 4000, my guess is ultimately you have one too many zeros. 1:1 honest book values will take it under 1,000 (DOW) Nazdog to zero. But that won't happen over night. I give it till next Thursday. :lol:

 

There is really nothing happening in America that suggests that any company is going to become more valuable, with a very few possible exceptions. The simple fact is that most of the major coprorations have morphed into quasi-financials relying heavily on leverage. And there's the rub. The damage coming will attack the underpinnings of the financials. I beleive we will see a major breakdown in real estate of all types in 2005 when all of the programs put in place for the last 2 or 3 years to prevent defaults expire. i.e. the time simply runs out and there's no way to keep putting off the inevitable.

 

Well, ny eeye seems to be okay enough to head off to the East Fork of the Salmon River for a couple of days of trout fishing and a little grouse hunting. They really shouldn't call it gouse hunting since the birds are about as smart as the dodo and we all know what that led to.

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The realization that neither Bush, nor Kerry, nor the Congress, nor any of the appointed/annoited plutocrats, care a rat's flip about the debt and deficit will continue to stress the bonds and USD through the election period. Every campaign theme contains a "spend" clause, a nod to "saving" (at all levels, government and private) is not in the cards.

 

At some point this will stress the equities. Perhaps because the nominal price of paper assets will be perceived to inflate in the future, the P/E compression as earnings falter may not drop stocks as much as one would think. This perception, IMHO, is one reason equities haven't faltered much at the MF level, which can only buy/hold stocks or hold cash. It will kill, however, the hedge/carry trade component.

 

Al's derivative tower has a high probability of taking a direct hit before the election. The upside potential of equities simply depends on the timing of such an event, which I think will be extrinsic to Al's pumping efforts.

 

Anybody thinking FNM?

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The simple fact is that most of the major coprorations have morphed into quasi-financials relying heavily on leverage.  And there's the rub.  The damage coming will attack the underpinnings of the financials.

What have been the "growth stories" of the cyclical rally since Oct. 2002? Tech and financials, right?

 

SOX, the flagship of the techs, reached a 12-month low yesterday after Intel lowered its revenue forecast. So much for the tech growth story.

 

That leaves the financials, now representing about a third of the S&P, if you include all the industrial 'financials in drag.'

 

The 'flowering of the financials' has been a function of giveaway interest rates, relentless currency pumping, and the misguided notion that systemic risk can be hedged (it cannot).

 

Doesn't the gigantic financial pyramid resemble one of those 10,000-ton balance rocks in Utah, supported on a tiny apex of low interest rates ... which Mad Al is now displacing with a levered timber ("Give me a fulcrum, and I will move the world!") ?

 

By the time Mad Al Magoo dimly perceives that the giant boulder's center of gravity has tilted off plumb, no force on earth will be capable of arresting its ponderous acceleration of angular momentum.

 

Mad Al himself may get 'splatted,' but that will be the least of our problems. :o

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Seems as though some violations of the constitutuion have been taking place as power nibbles away at "democracy"..

 

"A judge ordered the release yesterday of more than 500 people arrested in convention protests - and fined the city for holding demonstrators too long in legal limbo.

Acting Manhattan Supreme Court Justice John Cataldo whacked the city $1,000 per arrestee not released by his deadline of 5 p.m. yesterday, with the total fine potentially approaching $500,000.

 

"These people have already been the victims of a process," Cataldo declared in ordering the immediate release of 560 people held more than 24 hours - as long as 67 hours, in some cases."...

 

 

"There's no doubt that with the mayor's office and NYPD, this is an intentional ploy to keep \[protesters\] off the streets, even if that means violating the Constitution," said attorney Robert Gottlieb."...MORE

 

http://www.nydailynews.com/front/story/228616p-196196c.html

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