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Fear Subsides, Prices Rise

8 comments  |  by: Calafia Beach Pundit July 13, 2010
   
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Meanwhile, what's not to like about this? The fears of a double-dip recession were rampant not too long ago, and now they are being slowly replaced by facts which suggest a double-dip is far from imminent (e.g. declining swap spreads, strong corporate profits, strengthening federal revenues, to name but a few). The VIX is declining as fears decline, and stock prices are moving up.

About the author: Calafia Beach Pundit
Calafia Beach Pundit picture
Scott Grannis was Chief Economist from 1989 to 2007 at Western Asset Management Company, a Pasadena-based manager of fixed-income funds for institutional investors around the globe. He was a member of Western's Investment Strategy Committee, was responsible for developing the firm's domestic and... More
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Comments on this article
  •  
    Volatility has is high and INCREASED according to his own chart over the last month - and yet he talks about it declining?

    Call this man Mr. Happy.
    Jul 13 05:52 PM Reply
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    VIXX doesn't necessarily react because of volatility risk but because of market direction. A 700 point move in 7 days doesn't mean we can go back 8 days.
    Jul 13 06:34 PM Reply
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    I commend you Scott, you have stuck to your process over the last few months. I have been watching the hate mail pile up with each post you have made.........this to me was, and still is, the one of the biggest contrary (bullish) signs offered on Seekingalpha.
    Jul 13 07:04 PM Reply
  •  
    Faulty analysis from you again. You're reading but not understanding. It's the quality of Calafia's analysis that people criticize him about.
    Your computer is next.
    Jul 13 07:17 PM Reply
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    If you get all your "sentiment" from seeking alpha you are a moron. Ask people in the public, that is where the "sheep" money is. Not intelligent, active investors. You are clueless.
    Jul 13 09:05 PM Reply
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    Markets continued to move up on reported great earnings. These great earnings now reported are however unsustainable, and probably is like a peaking quarter in late 2007. The day one of the S&P firms reports better than expected earnings and the market stall, that will be the day to sell the longs and maybe go short. We are in this big whip-saw market. As bond yields get lower and lower, the overall risk structure of stocks will get higher, as the drug of cheap, free and plentiful money positive effects wear-off. Big Asian and emerging nations' cities are facing huge property bubble, just check out the record condo prices of Hong Kong and Singapore, Europe is deflating gradually and US and Japan becoming even more socialistic. Asset prices and stocks probably are likely to trend lower in due time unless hyperinflation takes hold, which is not a pretty alternative.
    Jul 13 07:56 PM Reply
  •  
    I like the KISS stuff. Most people way overthink it.
    Its like common scrotums. Lots of people think they have common scrotums, hardly anyone does.
    Keep up the good work.
    Jul 13 10:02 PM Reply
  •  
    Is that what the technicians call a "confirmation of a trend" we just saw last week in the 50DMA? Needless to say I don't believe in any of that. Unless of course....
    Jul 14 12:45 AM Reply