Market: Spooked Today, But Panic Attack Is Likely Temporary 73 comments
-
Font Size:
-
Print
- TweetThis
The stock market is spooked today, with prices dropping and implied volatility soaring. This is arguably the most significant "panic attack" the market has had since earlier this year. In my informal survey of the news today, I see almost universal concern that the positive GDP report yesterday was just a blip, that the economy remains very weak and vulnerable to another decline. Of 10 stories about the economy, at least 9 look at the numbers and can't find any reason to be hopeful. I think this is an exaggeration, but panic attacks like this are part of any recovery story.
When the market suddenly gets scared, my first reaction is to check the status of the market-based indicators of economic fundamentals to see if anything has changed. I can't find any evidence of deterioration in the numbers. Take this chart, for example, that shows spot commodity prices at their highest level of the year.
Swap spreads (next chart) show absolutely no sign of any increased tensions in the market. In fact, you couldn't ask them to be better-behaved.
CMBX and ABX prices are still in a rising trend. Inflation expectations built into TIPS prices are near their highs of the year, suggesting that the bond market isn't worried at all about a deflationary slump. Sep. '10 eurodollar futures are trading at all-time highs, suggesting that the market is not concerned at all about an imminent Fed tightening which might upset the economic applecart.
The dollar is weak, but it hasn't moved much for the past six weeks. Gold hasn't gone anywhere for the past three weeks. Oil is only a few dollars higher than it was last June. The Baltic shipping index is 50% above its average for the past year. Credit spreads are within inches of their lows for the year
Perhaps it's just that Halloween has come a day early.
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largestSee all
increase in followers
in the last 7 days
Fastest Climbers » -
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most active
Instabloggers.-
1
David Fry
-
2
TraderMark
-
3
Don Dion
-
4
Cliff Wachtel
-
5
Mike Havrilla
Top Instabloggers » -
1
-
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 73 comments:
Big question is, if you have a lot of people with profits in various positions, do they decide to take their profits and sell now, or do they get greedy and hope for more. Value and fundamentals will not enter into their decision very much - fear and greed will.
On Oct 30 04:48 PM Carl Spackler wrote:
> If the bearishness was chart topping, what do you call 6 months and
> 60% - oversold? Everyone has a reason why the party has to continue,
> but we all know that eventually all parties end. Sometimes they end
> because everyone is tired of the party and no one wants to be the
> last one there. Everyone bought into yesterday and just assumed that
> the market would rocket up (just like it has previously). When it
> did not follow through today, everyone ran for the exits.
>
> Big question is, if you have a lot of people with profits in various
> positions, do they decide to take their profits and sell now, or
> do they get greedy and hope for more. Value and fundamentals will
> not enter into their decision very much - fear and greed will.
So why are commodity prices pretty much your standard "go to"? Its becoming comical.
Commodity prices are currently decoupled from underlying economic activity. See recent announcements from companies that actually make commodities for confirmation (not that there is any shortage of confirmation in supply and demand data for anyone who seeks more than a price chart as a basis of analysis).
"The Baltic shipping index is 50% above its average for the past year"
So is everything else because all metrics essentially fell off a cliff. Are you implying something about the level of world trade?
Should you have bought on the 1st "panic" down day last year?
CNBC was peddling this garbage today as well... "Buy when people are fearful" after only 1 down day!
Yes reality bites but it is also a requirement for efficient capital allocation and healthy capitalism.
I know that 90% of investors don't care about those volume statistics. All they care about is that just as has always occurred since March, GS will come swooping in like Superman on crack and save the day. The volume metric on this recent "correction" strongly suggest that it won't happen this time, that this recent drop is no "correction".
True, the odds are very high that there will be a bounce next week, but the likelihood of it being anything more than that are getting slimmer and slimmer as the market internals continue to deteriorate. In fact, when the market bounces on Monday, the odds are now in favor of the likelihood that that will be the "correction".
On Oct 30 05:25 PM UsetheFed wrote:
> So perma bull California pundit gets instant seeking alpha publishing?
> More proof favoritism exists on this site. He keeps rehashing the
> same stupid commodities chart. Commodities are up cuz the fed is
> trashing the dollar to make the market go up. Is has less to do with
> actual demand.
>
If you want a recovery we need just a hope of jobs. Since that ain't happening in Washington, it ain't happening on main street. Which of course means, it ain't happening.
One can only guess that da boys have been called off the "stick saves" for one of two reasons:
1) GS, JPM and the prop desks think they can make a lot more bonus money taking the market down now. Must have sold most of their accumulated inventory by last week, thus they have now started building short positions, and need to accumulate inventory again at much lower price levels.
2) Dollar devaluation - other countries are ramping up the pressure on the Fed/Treasury about the significant dollar decline. Other countries have intervened recently (as per several reports) and may well have told the Fed to either get the dollar back to a more reasonable level or they will quit buying treasuries. Now that would be a real disaster, which the Fed could not take lightly. This could lead to a significant sell-off in the market purely due to massive short covering on US dollar short positions. Reports have indicated that as much as 97% of the market is short the dollar. If dollar short covering gets rolling, it could take the market down pretty fast.
Best guess is this market keeps selling off for quite awhile now. Watch for the "stick saves" to reappear for a few days. Then one can infer that the sell-off has been stopped by TPTB.
If either of the above turns out to even in the ballpark, then ole California Beach Pundit is gonna lose his lunch in a real hurry. Fear moves a lot faster to the downside than greed does to the upside.
On Oct 30 06:13 PM Albertarocks wrote:
> The market was spooked today? What about last Friday? What about
> Monday, Tuesday and Wednesday? As I recall, the market fell hard
> on all 4 of those days on massive volume. Wasn't the market spooked
> on those days as well? Yesterday! Oh yeah, yesterday there was a
> beautiful rebound on volume that wouldn't even fill your bathtub
> and the perma-bulls jumped right back in.
>
> I know that 90% of investors don't care about those volume statistics.
> All they care about is that just as has always occurred since March,
> GS will come swooping in like Superman on crack and save the day.
> The volume metric on this recent "correction" strongly suggest that
> it won't happen this time, that this recent drop is no "correction".
>
>
> True, the odds are very high that there will be a bounce next week,
> but the likelihood of it being anything more than that are getting
> slimmer and slimmer as the market internals continue to deteriorate.
> In fact, when the market bounces on Monday, the odds are now in favor
> of the likelihood that that will be the "correction".
I'm guessing his bio is bogus.
Apart from that though this daily repetitive his toy analysis reflects poorly on SA management. My bet is this stuff is actually paid advertorials. Can't see any other explanation, cause it damages SA.
On Oct 30 05:25 PM UsetheFed wrote:
> So perma bull California pundit gets instant seeking alpha publishing?
> More proof favoritism exists on this site. He keeps rehashing the
> same stupid commodities chart. Commodities are up cuz the fed is
> trashing the dollar to make the market go up. Is has less to do with
> actual demand.
>
> financeopinionss.blogs...
How will I re-accumulate my positions when the other sharks are in a feeding frenzy. Well, I'm a bigger shark, so I'll wound some (engineer with my fellow financial ogliarchs timed market corrections), and scare off the smaller fishes, as I accumulate their shares.
Gobble. gobble. Now time to charm those retail fishes.
S&P @ 1214 by end of year. see you there.
On Oct 30 07:01 PM dingding wrote:
> The problem with the world markets today is that there are too many
> momentum speculators and not enough fundamental investors.
Both the general economy and the stock market are giving off mixed signals on an almost day to day basis recently. When one stands back and considers what we’ve been through over the past couple of years, it is reasonable that this be so.
Looking at the economic performance through this period, by the beginning of 2008 it was clear that we were in uncharted territory but unclear whether the growing chaos in the mortgage and financial sectors and the international trade imbalances would have a serious impact on the general economy and the stock market. By October of 2008 it was abundantly clear that a deflationary depression and all that entailed was a distinct possibility and from then until March of 2009 it remained unclear whether that depression could be avoided and the probable implications of such a depression became starkly clearer. From March to early October reasonable prospects became increasingly apparent that a deflationary depression would be avoided although as that period ended the nature and sustainability of the anticipated recovery remained unclear. Presently there are conflicting signals about the future course of the economy. The direction still looks positive but the pace and the shape of the recovery are increasingly unclear.
The stock market and investor sentiment have swung widely with the changing perceptions of economic performance just described. Performance of different sectors of the market diverged significantly through 2007 and first 8 months of 2008 as their respective prospects seemed so different. All sectors save precious metals and Government securities suffered a major collapse in value during the October to March period reflecting the fear of possible economic collapse. The simple lessening of that pervasive sense of fear from March to October resulted in a dynamic relief rally but little sense of attainment or security. Recently that sense of relief has run its course and, while anxiety has not taken its place, uncertainty about the pace and shape of further recovery is assuming a more central spot in investors’ minds.
In short, we’ve been through a lot over a very short span of time. Both the economy and our expectations of it and of the stock market have now reached a wary equilibrium as we search for clearer indications whether the current stable but not yet clearly recovering state of the economy will give way to a mild retrenchment, an uncertain plateau or a further leg up over the next couple of quarters. Consequently, views are decidedly mixed on whether the strong advance in the stock market since March has overshot the mark (and a short term but not deep retreat should be expected) or is simply pausing for a week or so before regaining its upward move. The best guess is that both the economy and stock market will move alternatively up and down rapidly within a narrow range over the next few weeks until the future direction becomes clearer.
On Oct 30 05:00 PM klarsolo wrote:
> What do you call almost 11 years and flat returns (S&P is on
> 1998 levels)? Or returns over the last 13 months: -3 %. Is that the
> biggest rally ever? Look at other timeframes than just the last 6
> months only. Some party...not.
But I fail to see how some of these guys can tear themselves away from hoarding gold, gas, bullets and canned goods long enough to actually write a post, after all the world is ending and a guy has to be ready.
I'm not refuting we've had a big rally. We've also had the worst selloff in history preceeding the largest rally in history. So what?
We can easily go down from here. But we can also easily go up from here. Only people with not much trading experience think something is obvious. Nothing ever is.
On Oct 30 08:28 PM Carl Spackler wrote:
> Let's not get ridiculous. I could play the same game and say it
> is overvalued because in 1832 the S&P was at 12 and now its at
> 1036. There is no refuting that over the last six months we have
> had an unprecedented rally. Name one other time where you got 60%
> in six months......silence .........that's right its hard to beat
> it. Face it, this baby had gone a long way and maybe, just maybe
> its over.
1. 26 million out of work and growing.
2. No one going back to work in over a year.
3. Unemployment benefits running out.
4. GM wants another 50 billion or good bye!!
5. GE wants 80 billion or good bye!!!
6. Fannie Mae and Freddie Mac are getting flooded with additional foreclosures.
7. AIG, not worth a penny????
8. Financials still no clarity, foreclosures up, auto and credit card defaults up, credit swaps no value, loans down.....
9. Auto sales down from 14 million to 9 million.
10. Travel and business travel, way down.
11. Leisure industry down,
12. Dining down.
13. Heavy industry, down.
14. Durable goods, down.
15. Consumer goods, down.
Virtually every sector of the market is worse off than a year ago but there is no reflection in the market for this.
Uncle Sam is spending all my money but has run out. The balloons will pop and we will crash again and the small guy will be hurt a second time.
If you think there was alot of money sitting on the side now, wait till the second coming!!!
Things are bad and getting worse and there is nothing that my lying government and HOPEFUL wallstreeters can say that will make me believe that it is anything other than pitiful out on the street.
But where were stocks when the biggest problems of the Great Depression were finally taken care of? Where they still at the same level?
Do you really think in 3 years from now the big problems are resolved but the S&P is magically 30 % lower or still on the same level? Or do you think in 3 years from now the problems will be even worse and we're 50 % lower?
On Oct 30 09:20 PM marketman54 wrote:
> You want the basics and the fundamentals, it is very easy, here they
> are:
>
> 1. 26 million out of work and growing.
> 2. No one going back to work in over a year.
> 3. Unemployment benefits running out.
> 4. GM wants another 50 billion or good bye!!
> 5. GE wants 80 billion or good bye!!!
> 6. Fannie Mae and Freddie Mac are getting flooded with additional
> foreclosures.
> 7. AIG, not worth a penny????
> 8. Financials still no clarity, foreclosures up, auto and credit
> card defaults up, credit swaps no value, loans down.....
> 9. Auto sales down from 14 million to 9 million.
> 10. Travel and business travel, way down.
> 11. Leisure industry down,
> 12. Dining down.
> 13. Heavy industry, down.
> 14. Durable goods, down.
> 15. Consumer goods, down.
>
> Virtually every sector of the market is worse off than a year ago
> but there is no reflection in the market for this.
>
> Uncle Sam is spending all my money but has run out. The balloons
> will pop and we will crash again and the small guy will be hurt a
> second time.
>
> If you think there was alot of money sitting on the side now, wait
> till the second coming!!!
>
> Things are bad and getting worse and there is nothing that my lying
> government and HOPEFUL wallstreeters can say that will make me believe
> that it is anything other than pitiful out on the street.
Every time markets go down bears scream in anticipation of major selloff. And everytime markets go up bulls come out and scream "in your face!" back at the bears.
You'd think that after a while both parties learn that stocks do whatever they want and you better be prepared for *everything*. But no, not ever gonna happen.
On Oct 30 09:40 PM cstauffer wrote:
> I am frankly very glad that the sentiment on these boards and many
> others is so negative. This snap back bull market that we have had
> since March will not end with so many people scared or willing to
> be scared whenever the market goes through a profit taking period
> such as we are experiencing recently. I am really not sure what
> it is that people want at this point in the recovery coming off such
> a significant downturn. I certainly do not expect robust top line
> growth and I certainly would expect a significant portion of positive
> economic activity to have been "stimulated" by the stimulus.
BTW another half dozen banks just went under tonight.
Yeah, everything is good.
On Oct 30 10:37 PM Archman Investor wrote:
> Not even worth a real comment here. Just more of the same from the
> author who rationalizes every piece of news as good for his asset
> gathering buddies.
>
> BTW another half dozen banks just went under tonight.
>
> Yeah, everything is good.
You want to measure sentiment in the masses. For example, in 1999 at the top of the market I got a stock tip from a stripper who was taking out a second loan on her home to buy more Iomega. That is a sell sign.
On Oct 30 09:40 PM cstauffer wrote:
> I am frankly very glad that the sentiment on these boards and many
> others is so negative. This snap back bull market that we have had
> since March will not end with so many people scared or willing to
> be scared whenever the market goes through a profit taking period
> such as we are experiencing recently. I am really not sure what it
> is that people want at this point in the recovery coming off such
> a significant downturn. I certainly do not expect robust top line
> growth and I certainly would expect a significant portion of positive
> economic activity to have been "stimulated" by the stimulus.
Good point. Something worth remembering. Especially if you're thinking of buying an option.
"Market: Spooked Today, But Panic Attack Is Likely Temporary"
I wouldn't bet on it.
Disclosure: I don't own any bearish ETFs (though I plan to buy EDZ next Monday), nor short any stocks. I am 40% in cash.
> Watch for the "stick saves" to reappear for a few days. Then one can infer that the sell-off has been stopped by TPTB.<
I don't think that's going to happen anymore. In fact, during the last 8 excruciating days of solid drops, we did indeed see massive volume in the final hour of every single one of those days. That was the central bankers swooping in to save the market from a more serious meltdown. Those "were" the stick saves. It seems to be apparent now, that the stick saves are there alright, but they're just not having the same beautiful magic effect that investors have come to rely upon and "expect". Therein lies the true danger to those who don't believe in the concept of "lower". Please believe it folks, "lower" does indeed exist. So does "much lower".
However, before the open, the news of CIT impending bankcrupcy again started the selloff and the later news of Carl Ican rescue started another rally attempt only to be dashed down when the rescue was not a rescue after all.
Could CIT be another silent killer Bear Stern type of bankcrupcy?
BS bankcrupcy was not supposed to start AIG and FNM failures that led to Lehman collapse.
What will happen if CIT goes BK? Will it cause another domino effect in the banking and finance industry?
Why is this bankcrupcy not being analyzed at all? This is supposed to be bigger than Bear Stern bankcrupcy and more people or industries will be affected specially small and medium ones?
And you think everything is Ok?
> The market rallied on Thursday
> because the economy expanded by $300billion to $500billion over the
> last 3 months. Many people believe this was largely due to government
> incentives such as "cash for clunkers". This program, I would like
> to point out, cost the government around $3.5billion, so I'd like
> to know where in the hell people get this rubbish about government
> stimulus propping up the US economy.
um, they got that rubbish from the government. You know, the people that produce the GDP number. "Motor vehicle output added 1.66 percentage points to the third-quarter change in real GDP after
adding 0.19 percentage point to the second-quarter change."
Elsewhere federal government expenditure up 7.9% after being up 11.4% in Q2. ...and so on.
Read the government press release. If you want us to believe the number then surely we should also believe the factors *they* say contributed to the number ...right?
On Oct 31 08:26 AM Bruce Krasting wrote:
> You checked the market indicators and did not find anything wrong?
> We just had a 60% move in the S&P. Interest rates are at historical
> lows because of Fed intervention. Several big banks are basket cases
> waiting to fall into a hole. We can't sell a house or a car without
> a subsidy. The dollar is just a few days from a rout. We are looking
> at ten years of $ trillion dollar deficits. Commodities are rising
> as a result of a weak dollar.
>
> And you think everything is Ok?
View the rally (and your portfolio) through the lens of a person who owns EUROs. There was no rally at all.
I guess they can keep running the dollar into a hole and prop the market in dollars, but it has not appreciated in real terms, and the market is anticipating something we have never seen before. The Fed (and the laughable Congress) is not able to prevent the inevitable: a multiyear period of near-zero growth and a collapsed federal balance sheet.
Never forget the investment fundamentals.
1. A bull market ends in one day when the top is set.
2. Pigs get slaughtered
3. The market runs out of greater fools.
4. Charts never get the future right because they are based on the past. Actual activity and emotion drive the future.
5. Stealing money from tax payers and redistributing the wealth is detrimental to the stock market.
6. High unemployment and low consumer spending does not promote growth and prosperity.
All I see on here are a bunch of bears screaming we've gone too far on no fundamentals - which I agree with to some degree, so the truth is nobody knows for sure. But one thing we can all agree on is don't fight the Fed.
Temporary dollar strengthening - can't last, won't last.
Macroeconomics tell me use the dollar 'rally' to pick up non dollar based commodities and see you in 5 years from now.
not trying to be cute, seriously that is a flawed number and has has been for years
it gets manipulated to whatever it needs to say through revisions
On Oct 30 05:52 PM drewriders wrote:
> Look at the history of the market. Unless leading economic indicators
> start going negative or the monthly job situation suddenly starts
> to get worse we are moving higher from here long term. 'panic selling',
> if it occurs at all, is if we have positive job growth in the next
> six months and it starts to turn largely negative again. THEN you
> have to worry about retesting the March lows, but it will only be
> temporarily.
On Oct 30 03:59 PM jeffz wrote:
> Yea, keep on cheerleading, see ya at the bottom
Good news, up market: it's "because of" the news.
Bad news, up market: it's "despite" the news, or investors "looking past" the news.
Good news, down market: it's "despite" the news, or investors "looking past" the news.
Bad news, down market: it's "because of" the news.
Those 4 scenarios cover 95% of all market summary headlines. And when they're totally befuddled, it's "technical." That's the last fallback of people who have no understanding of market behavior.
On Oct 30 07:42 PM AxIt wrote:
> I agree with the article. There is nothing that changed significantily
> for the worse in the data this week. On the contrary, we had some
> significant positive news (GDP in primis). This is just a technical
> correction similar to the others that already happened in the last
> months (and that may be expected in a normal uptrend). DJ could go
> down to 9300 and the uptrend would still be healthy if this level
> is respected. My personal opinion is that it will not go below 9500.
> But we'll see.
powerandcontrol.blogsp...
Wait 'til I tell my mate "Honey I have to go to the nudie bar to judge market sentiment". It could make investing in the market a LOT more popular. Or at least doing the research on the fundamentals.
>The dollar is just a few days from a rout.<
Bruce, I have no argument with your points because they're correct in my opinion. But the idea of the dollar being just a few days from a rout remains to be seen. I'd guess you say "a few days" in reference to the G-20 meetings? In that respect you 'could' be absolutely correct. But if there are no great earth shattering announcements that come out of that meeting (and there well could be), and if after that meeting the world is basically "business as usual", then there are convincing cases for a surprisingly strong thrust in the value of the dollar. That possibility is completely in sync with a big drop in the markets as well, which appears to be on the horizon. So in either scenario (even though I'm a positive thinker) I can't see it as much other than a lose/lose proposition.
In any case, even if the dollar does surge for a few months, it's ultimate demise is indisputable.
Bottom line: when VIX spikes the way it did, ignoring it is a dangerous proposition. For a curious reason, better understood by behavioural scientists than economists, markets move a lot faster on the downside than on the upside.
Either he holds no positions i.e. won't put his money where his mindless punditry is, or he conceals his positions and acts as a mindless market pumper.
On Oct 30 05:25 PM UsetheFed wrote:
> So perma bull California pundit gets instant seeking alpha publishing?
> More proof favoritism exists on this site. He keeps rehashing the
> same stupid commodities chart. Commodities are up cuz the fed is
> trashing the dollar to make the market go up. Is has less to do with
> actual demand.
>
> financeopinionss.blogs...
JL
except for Santelli and Art Cashin
On Oct 30 05:25 PM tunaman4u2 wrote:
> The last few months of the dollar is toast is the panic... 1 down
> day is not a panic by any means vs. months of gains. The market has
> panicked people out of cash for months into stocks.
>
> Should you have bought on the 1st "panic" down day last year? <br/>
>
> CNBC was peddling this garbage today as well... "Buy when people
> are fearful" after only 1 down day!
Most investors believe that we are in for another leg down and this therefore will be a self-fulfilling prophesy. If you don't think that most people believe this, then just check the negative comments or "thumbs-up" ratio on any market-positive articles written. Those that do have money on the sidelines, and there's far fewer now than before the crash, will wait it out until hell freezes over or until the second leg down comes. And that second leg will make the first drop look like child's play.
Got cash? Buy gold, oil, etc., etc., or you can risk it all on the big stock market spin of the wheel. Whoopee!
They are spooking the market.
Naked Shorting in these stocks has become paramount and is basically controlling the economy.
The market is a gamblingcasino now with trading the cry.
Investing for sdvancement ,dividends and profit are no longer the action.
The stock market is being manipulated.
Look, what I saw on friday was all the people who were short on the dollar panic selling, of course I was expecting a correction, I have taled about it here many times, and cautioned people to take profits, but to say the dollar is going up and up again, is plainly nonsense.
I pretty much ignore the rest of the bunch.
I am mostly in cash right now. With a few S&P puts.
I was fully long, till the end of September. Not sure where the market is going. But I felt it had gotten a bit frothy. Decided to take a breather for now.
I will be looking closely at the unemployment & foreclosure numbers.
When they start to improve, I will start looking to see, what is on sale.
On Oct 31 05:44 PM varmet wrote:
> My results have improved since CNBC is now always on mute
> except for Santelli and Art Cashin
what no one seems to have an answer for is where else you going to put your money
gold is at all time highs and pays no dividends real estate is a disaster and t bills and money markets are anemic.large cap multinationals that are well priced is the answer
It has been a long time since March and in my opinion a V shaped recovery would be consumer spending at levels far higher than what they are today. Many investors are starting to think the same thing. We have seen a V shaped increase in stock prices but the economic recovery is more like an L. I would not be surprised to see stock prices reflecting the reality that the V shaped recovery is not happening.
But you were looking for reasons on Friday why the market was down. Could it be because a Goldman Sachs newsletter said the S&P would end the year at 1060 which was lower than Fridays high?
Could it be a drop in consumer spending of .5 percent when everyone has invested in a V shaped recovery and recovery that looks to be slip, sliding away?
Could it be that oil prices have jumped from 30 a barrel to over 80 a barrel since December even as they are running out of places to store all the extra oil being pumped, sucking money from consumers that might have been used to purchase goods and services?
Could it be incomes were reported to be down. Not sure how a V shaped recovery can happen with declining incomes and increased costs of things like gasoline as consumers only have so much money to spend.
Could it be economists after seeing the GDP numbers and looking at the downtick in car sales from the aftermath of the Clunkers program, rachetted down their future GDP forcasts. Another stick in the V shaped recovery mud.
Could it be the three big bright spots in the GDP report, car sales, home construction and consumer spending were all splashed with recent news of car sales dropped, 14 percent decline in mortgage apps, a few percent decline in home sales, and a .5 percent drop in consumer spending? Not leaving much left for the bright spots of the GDP report.
Could it be wholesale is seeing increased spending on building inventories but retail is not seeing increased spending to buy up all that additional inventory? Another trend that can not continue for long.
Overall one might think that some investors who were enjoying the fact GDP was growing, going to grow and a V shaped recovery are now waking up to the fact the taxpayers spent huge money to loan real cheap money to banks to increase lending only to see lending reduced and interest rates jacked up higher for consumer credit cards to fatten bankster profits and bonuses.
My opinion is the recovery is showing itself to be not as most investors were expecting it to be so they might just adjust their investment portfolios accordingly. That combined with the end of the year where many investors who are happy to see their investments return to higher levels once again, may now be worried they might see the market decline on the new views growth might send the market lower and they might want to lock in their profits before the market resets once again.
Of course with banks not loaning out as much money and consumers trying to pay back as much as they can on credit cards that had interest rates jacked way up by the Banksters, the banks have more and more money each month they have to invest somewhere so they could keep buying stocks and keep the market rising regardless of dropping consumer spending on goods and services.
But watch out below if the banksters decide to use all that tax payer liquidity they have to invest in the downside of the market because of a lack of confidence that the current state of the recovery warrents the current prices of stocks.
2. With a real unemployment rate of 25% and climbing, 24% of teenagers without jobs, millions of homeowners underwater, there are few Consumers left for anything but basics, if that. 46 million Americans are now below poverty level, up 6 million from last year.
3. The US Industrial base in non-existent, and the "Service Economy" is collapsing. We are not only losing jobs, we have lost jobs that will never come back, and we have nothing to replace those jobs with.
There is nothing temporary about any of this. Nothing the government can do in the short run can solve this problem. Maybe in 5-7 years with a lot of money and the correct policies the US might stage a come back. I hope!
I'm really confused.
www.republicmagazine.c.../
Financial game plan
1. crash the market (2008, early 2009)
2. devalue the dollar (ongoing 2009)
3. appreciate gold (ongoing 2009)
4. stage a big ramp in the market to tease in the sheeple (2009, ?)
5. keep devaluing the dollar in order to [ see 4 ] (ongoing)
6. give out the option to have gold as margin collateral (Announced today)
U.S.-based clearing house CME Group Inc. (CME) will allow physical gold to
be used as collateral for margin requirements on all exchange products, a
spokesman said Monday.
The new global policy is effective Oct. 19 in accordance with a member's
notice issued late Friday, said spokesman Jeremy Hughes in London.
Clearing member firms will be allowed to post up to a maximum of $200
million worth of gold as collateral to cover performance bond, or margin,
requirements, Hughes said.
The gold will be held at J.P. Morgan Chase & Co.'s (JPM) bank in London.
7. keep 5,2 and 4 in order to
8. get as much gold as possible
9. crash the market, take gold
10. kill the dollar
11. price gold in SDRs
12. sell gold back to the sheeple with a 200% premium
You're not confused, there's just significant conflicting opinions. You can spend all day reading opinions and not end up any better for it.
Cut down the chorus to a few that you consider to be clearly intelligent. Preferably ones that respond well to questions and challenges to their thinking. Try to get people on both sides of the bear/bull aisle. If you ever find a complete idiot, follow them too. At times they can be your best indicator.
In the end though, it's up to you. If you're young and don't have the time or interest, just buy an index fund. If you're quick to make decisions or impulsive, do the same. If you're older make sure you have an appropriate amount of bonds to balance out another pull back.
seekingalpha.com/insta...
China's indexes are not too bad. Japan, Korea, Taipei are damaged. Housing (HGX) looks terrible. European indexes seem ready for a heavy fall -- momentum has turned very negative.
Oil ETF topping, take profits. Lumber ETF topping. VIX breaking overhead resistance. Coffee: take profits. Gold: hardly budging.
Although there are various indicators of strength, such as the 5-year swap spreads mentioned in the article, from an overall perspective there is a lot to be concerned about. Technical analysis of various markets shows underlying weakness. For those interested, I have written about this topic and it can be found at this link:
seekingalpha.com/user/...