E Nuff Sed

Sobering Stat: ARMS Index Indicates Market Is at Peak, Not Bottom

TRIN is a short term indicator and probably is being messed up by high frequency trading. Longer term technical indicators are just fine.

Look at my post on the Coppock guide.
seekingalpha.com/insta...
Also as one previous poster suggested high quality companies like IBM, CSCO, P&G, J&J, Pfizer are trading at decade lows.
You guys have already missed half of the cyclical bull market, don't miss the half still to come. Stocks across the board are strongly bullish.
seekingalpha.com/insta...

You will get your bear probably some time in 2010 or 2011 - just not this year. Meanwhile don't get in front of this road-roller.

Today May Be Markets' Turning Point

I think you are 50% right.

Was August 6 the Stock Market Top for 2009?

I agree the market is technically over-bought but still close to fair value fundamentally. The market is currently trading at a TTM P/E ratio = 161.2 (Aug 3rd close) and a P/E10 ratio = 18.1. This is about the level it was in the early 90's.

dshort.com/charts/SP-a...

Why This Rally Is Unsustainable

I agree the "pull back" everyone is expecting may not happen any time soon. The S&P 500 has already pulled back 5% twice in its 30% climb from the bottom on March 9th.
stockcharts.com/h-sc/ui?s=$SPX&p=D&st=2...
Every pull back is an invitation for more longs on the side lines to pile in

Why This Rally Is Unsustainable

I agree with the comments that TBT has been a good trade. Also TBT is showing great technical signs. I think it has another 25% to go.
stockcharts.com/def/se...[PA!B50][D][F1!3!!!2!2...
I disagree with author on his bearish position. While the market is certainly overbought technically and due to a 10 - 15% correction - its going up after this. The reasons are fundamental. Look at figure 1 in pzena's analysis. The S&P 500 relative to 10 year treasuries is cheaper than its ever been in 30 years.
www.pzena.com/investme...
As credit markets stabilize there the meltup in equity prices will continue.

Why It's Better to Bail Out Borrowers than Banks

The above comment does not apply to AIG.

Why It's Better to Bail Out Borrowers than Banks

The bail out (TARP) money is not free. The banks are paying a 5% - 8% dividend to the government who had just printed a lot of "free money" to liquidate/dilute the shareholders.
I suspect when the dust settles in a few years the government and the tax payers will come out ahead and they would have saved the system as well. This is what happened in the 90's with the S&L's.

10 Reasons Why We Still Haven't Hit Bottom

I agree with you. The problem is picking the right stock. Imagine if one had picked AIG or WAMU or C etc.


On Mar 27 02:46 PM dave mckay wrote:

> I laugh when people say that buy and hold does not work. Just pick
> 3 stocks at the very top of the market in 1972. IBM, Proctor and
> Gamble and ConEd. You would have made a fortune. With ConEd, those
> shares you purchased in 1972 would now have a dividend rate of approx.
> 50%, with todays dividend payout! Try that with bonds or any other
> kind of income tax-sucking, market timing scheme.

Geithner's Financial Reform Is Doomed to Fail

A purely capitalistic system is as non-viable as a purely socialistic system. The truth is somewhere in the middle.
We also need to stop pretending that banking is a purely capitalistic enterprise. It is public utility which needs to be closely regulated and controlled.

The Economy, And Why It's Taking So Long to Fix It

Excellent article. We are less than half way through this recession (or a mini depression). It will take 5 - 10 years for us to recover fully.

This is an economic reset for many of us who were lulled into complacency. I for one thought I could send my kids to college and retire at 55 - but did not realize I was living in a bubble. I am now happy I am employed and fully expect to keep on working to 65 - 70 - who knows?

For the future when the economy starts recovering I think Inflation will be a problem, the US currency will devalue sharply and interests rates will rise putting pressure on the markets again.

The biggest positive is that Bush is gone. I think the Obama administration is trying its best to make the best out of a bad situation. I wish it luck.

Great Depression Not Imminent, But Inevitable

The CDS market is correlated with the stock and credit market - but it is a dependent variable not an independent variable. It is just reflecting (and perhaps amplifying) the risk in the stock/credit markets. Many CDS providers simply lack the collateral to be credible counter parties and ones which do have the collateral are demanding very high risk premia.

As the market prices of assets deflate, risk actually starts to evaporates. Now in emerging economies you can a $1 of value for 50 cents (some EM "A" rated bonds are yielding 18% + in USD - and the USD is likely to go down). People who still have cash will be enticed by such mouth watering bargains and slowly come into the market and the system will slowly start to correct itself.

Thus in my view your call for a great depression is unnecessary scare mongering. However anything is possible and even a broken clock in right once a day - so a a great depression as a "once a century event" is possible but not probable given the policy response by the US government and China.

AIG: The Mark-to-Lehman Market

AIG is not a bank from where depositors can withdraw or counter-parties can withdraw in a hurry. I can understand this for Lehman which as a investment bank is facing a classic run at the banks engineered by shorts. So comp. are apples to oranges.

AIG's financial leverage is approx 14 while, quite reasonable for a financial services company.

AIG shares are going to be hammered tomorrow as the investment sheep, scared by the short wolf pack, crap & run for the hill. My advise to the longs is to sit tight - watch how the next few days unfold. There might be a buying opportunity of epic proportions.

Crunching Numbers: Why I'd Buy AIG

Distressed investing can be very profitable. Look at Ambac as an example (up 800%). I was lucky enough to get in right at the bottom. No luck so far with AIG. However I think at this stage the upside is much more than the downside.

Long AIG.

Attention Locusts: The Party Is Moving to Merrill and AIG

Lot of bad advice, here. For people who are already in these stocks, it is too late to bail out. It is more likely you will get whipsawed. Once the current short selling subsides (a big IF - I admit) there is likely to be a huge short squeeze.

For my money, I willing to watch my position go to zero than get out in this market. I might even take a Pepcid and add to my position.

Disclosure: Long on AIG.

AIG: The Mark-to-Lehman Market

AIG's financial leverage is just 8:1. As to getting rid of CDS-CDO's - it cannot. There is no market. These have to be held to maturity. It can however get rid of other assets to maintain capital ratio's. It will have to sell the family silver at fire sale prices, since capital raise is no longer an option (given stock is at 40% of book).