Pessimism Abounds, But I Think We're Due for a Rally

I don't know if I'm turning into one of those crazy "the world is ending let's buy physical gold and silver" types, but I found this article interesting and scary. The author provides his interpretation of the Davos Forum. The author comments about Putin's blue print for a post USA world. It seems credible, but it's not mentioned anywhere that Russia is on the verge of bankruptcy. They'll burn through cash very quickly if oil prices don't rise.

I never heard of this guy before, but he seems to be dead on:

Faber says Eastern Europe is collapsing, because they borrowed too much in foreign currencies (this does not bode well for their creditors).

It seems that everywhere I turn there is deep pessimism about the future. As I'm very pessimistic myself (and view myself as a contrary indicator), I've sold my puts and bought calls on Friday. The market can continue falling, of course, but I think we're about due for a rally (probably just shorts covering).

Comments

[morph366:]

One sometimes has to be wary of too many contrarians.

Feb 22 06:47 AM

[Bundee:]

"I think we're about due for a rally"
and I think I'm about due for a huge lottery win, but thinking it will happen doesn't mean it will.

Feb 22 10:16 AM

[Roger Knights:]

Celente's best quote was this:
"When people lose everything, they have nothing to lose; and they lose it."

Feb 22 10:43 AM

[Mad Hedge F...:]

GOLD! GOLD! GOLD! This is the cry being heard worldwide by investors in the Great Gold rush of 2009, looking for a generic “short America” trade. Where in the past gold seekers used sluices, shovels, and jackhammers to extract the glittery stuff in California’s Sierras, Alaska’s Klondike, and South Africa’s Rand, today the instrument of choice is the mouse. Online traders are unleashing clicks by the millions to buy ETF’s, American Eagles, mining shares, and futures contracts. With stock traders sitting on their haunches, wondering if the Dow will hold 7,000, this is the only thing that is working right now. Gold is no longer just catastrophe insurance. Traders are buying gold more for what it isn’t, than what it is. It isn’t made of paper, made in the US, or held in custody by Bernie Madoff or Stanford Financial. The yellow metal hit a new high for the year of $999 overnight, and the risk of a “melt up” is increasing. The Street Tracks Gold Trust ETF (GLD) is now the seventh largest holder of the barbaric relic in the world. For the newly aggressive, look at the DB Gold Double Long ETF (DGP), which gives you a 200% long exposure to gold, and is up 54% in a month. Who says there is nothing to buy out there?

Feb 22 11:10 AM

[bigmoney:]

GLD has a 52wk range of 66-100.44. That is a wild roller coaster ride. Furthermore, paper gold requires a leap of taith that is contrary to many of the principles of gold ownership.

Feb 22 12:06 PM

[Glen L.:]

Hey, for once I agree with almost all the previous commenters - except Morph. There are never enough contrarians; if there were, we wouldn't have wild speculative bubbles and the resulting catastrophic crashes. Instead, we have way too many herd-followers. It's the same problem that gives democracy a bad name.

Why are we who favor gold and silver holdings "crazy", Devin? Is it crazy to buy insurance against catastrophe? Are Jim Rogers, Peter Schiff, Gary North, etc. crazy?

Yes, like a fox.

Feb 22 12:23 PM

[ksteadford:]

this looks funny to me. the characters in the video lips are not saying what we are hearing!

Feb 22 12:24 PM

[Gtarras:]

NEVER EVER listen to Putin propaganda!!! I have spent a lot of time in Russia, to know better... although I do not think they will default this time, they need to have somebody external to blame.. who is better than the US...>? i just came from Moscow, average russians turn away from blaming themselves and their masters for the poor economy their fathers left them with, and find America responsible for the mess... this is propaganda at its best... this is how the regime will survive..

Having said that, I do not think things are so bad there, so that Russia will default... they will create the hysteria over the US screwing the world, and then will force the russians to accept leaner times (they are used to it, 1998 default has not happen that long ago)... by doing that, the govt will stop wasting its reserves at the speed they were over the past 6 months... they still have plenty of money left (nearly $400 billion), and no sovereign debt to speak off ($20 billion)....

Feb 22 01:33 PM

[a. palmer jr.:]

I'm from the US and I think it probably IS our fault. I'm not sure people in the other countries are as crazy about material possessions as we are. I know they all don't have to have mansions and big gas guzzler suvs like most of us do. And I hope they're not silly enough to buy those things on credit like we in the US do, knowing we can't repay the loans. I think our housing crisis was ground zero, and spread overseas in a short while because, like it or not, we now have a world economy.

Feb 22 11:26 PM

[Jake2:]

The speaker in the first video has no credibility. His brain is mush. Disregard him.
Marc Faber is Mr. Gloom and Doom. Pick your poison.

Feb 23 01:34 AM