OldLimey

Telltale Signs That a Significant Correction Isn't Imminent

Dead right. I thought I'd largely missed the shorting opportunity of a lifetime while I was away from the market last autumn. Never thought I'd get a second chance like the one that's setting up for later this year.


On Jun 02 11:32 AM Roger Knights wrote:

> Tyler Durden and others have pointed to several specific oddities
> in trading patterns over the past months, not just daily spikes.
> Kim assumed we SA-ers were familiar with them.
>
> This propping up is setting up a great short-selling opportunity
> down the road.

Bad Mortgages Are Only the Beginning

JasonC and PainfullyAware:

Are we in a deflationionary period? A lot of asset prices are certainly heading south, but prices of the 'stuff' I buy every day haven't shown much sign of joining them. Maybe that will come.

Are we heading into a period of significant inflation? The economics I learned 30 years ago is a bit out of its depth today, but won't the answer depend upon:

1. How the various bail-outs actually evolve in practice. A lot of what has been committed is still in the form of guarantees - which presumably would not be inflationary unless called.

2. What is done with the 'cash' element in the bail-outs. If it is used by recipients to rebuild balance sheets holed by the massive further write-downs that honesty would require, then the cash will simply have disappeared into a financial 'black-hole' and therefore not be inflationary. If, on the other hand, balance sheet obfuscation continues and the moronic Gordon Brown dictum of forcing banks to onlend infusions does gain traction, then - when combined with what are going to be pretty low policy rates in most currencies in the months ahead - we'll all be down at the bullion dealers.

Just a thought - my crystal ball burnt-out weeks ago. Very painful.