otbricki

Is the Market Going Lower? Silly Question!

Depends on your time frame and if you believe in long term market cycles. One view is that we are in a secular bear market now, one that started in 2001. If the patterns of the past hold true, we will be in a secular bull market perhaps starting 2015 or so. That would be a damn good time to be 80% allocated to equities.

On Mar 03 04:45 PM xsellside wrote:

> A market meltdown like this begs the question, "should anyone EVER
> have a strategic asset allocation of 80% in stocks or more?" Traditional
> risk assessments of ability and willingness to take risk put many
> people in these allocations, but not one of these ‘questionnaires”
> really prepares an investor for this type of market.

One Scary Unemployment Chart

I agree with your comments. If this is truly a 74 or 81 style recession, it is a prediction of a sharp V bottom and a steep recovery. Because of the V bottom there really is no way to predict where the bottom is. It could be very soon. And when it comes recovery should be fast if these shapes are predictive as the author claims. Or it could be deeper. The steep slope that the author of this article is wringing his hands about may not be a big deal if it is a steep slope on both sides of the bottom.

The '91 and '01 recessions were shallow but flat in terms of recovery. More U shaped.

The other thing to keep in mind is that after secular bear markets you get secular bull markets. Maybe 2000-2009 will be regarded as such when economic historians write the book on this period in time.

On Feb 09 08:30 PM lbrtkng wrote:

> You're first chart needs to be normalized in some way (like % from
> peak from each recession) in order to offer any real insight. You
> should have put depression era job losses on there too and you could
> have made it look even more dramatic... but it still would offer
> little insight or value.
>
> You're second chart apears to be done the right way and all it tells
> us (so far) is that relative job losses are as bad as the've been
> since 1974. Likely not a big surprise to anyone reading this. How
> far will job losses go? I don't know, but I know your use of this
> data here offers little predictive value.

First Call of a Double-Dip Recession: Setting Up a Market Bottom?

The Pharm industry is not what I would use for a safe haven. They are having a tough time coming up with drugs that offer real improvements over existing meds, and as soon as Obama comes into office he is going to put an end to the B.S. where Americans pay 5x more for the same meds than anyone else in the world.

ARM resets are a worry but there is time to find a solution. One of the solutions is to keep interest rates low so they reset lower than they were issued. We are pretty close to that now. But I would not buy any bank stocks because this means banks are not going to make any money for a while.

Here is a good article on the topic from Seeking Alpha:

seekingalpha.com/artic...

The Weight of Money in 2009

1. Housing. If housing needs to drop another 15% why will that take 2 years? It dropped 18% this year. Yes there is an inventory backlog, and many boomers will need to downsize. But there is also population growth and no construction. You need to look at both supply and demand. As soon as down payment terms loosen (probably when prices stabilize) the low mortgage rates and demand will soak up the inventory right quicklike.

2. If you are a long term investor you really don't need to make money in 2009. What you have to do is preserve capital get into position to take advantage of the huge move back into equities that will come when the economy turns.

Is American or European Unemployment Insurance More Generous?

I'm all in favor of removing restrictions that inhibit the unemployment recipient from finding a job.

But I'm not in favor of increasing the costs to the employer of laying off an employee - that causes the employer be slower to hire people, increasing unemployment. As evidenced by the chronically higher unemployment rates in France.

Is It Time to Buy? What History Shows

One thing that peeps forget is that stocks prices are based on anticipation of future earnings. Not current earnings - that is like ancient history. Usually two quarters out future earnings. And we have already been in a recession for a year.

It is time to start accumulating. Dollar cost average.

Sentiment Overview: Are We Finally Getting Bearish?

Are you saying the use of unprecedented is unprecedented?

Seriously there should be some sort of contrarian play on the idea "unprecedented" or "it's different this time".

It is never really different. Trees don't grow to the sky. Civilization is here to stay. Things only seem bad because we measure differences, not absolute values. We are in a severe recession because economic activity has gone down two per cent.

Surviving the Short-Term to Participate in the Long-Term

Historically a Black Swan event is an occurrence or discovery that breaks a long held belief system based on a long history of observations that leads to a set assumptions of fact based on inductive logic. It isn't based on the statistically improbably result, but rather a binary event that totally trashes a belief or system of beliefs. One classical example of a Black Swan event was the discovery of microorganisms. Another was the discovery of black swans in Australia forever altering the belief that all swans are white.

The current stock market behavior is not a Black Swan event except in the vernacular of the hyperbolic prose that so often is the content of financial blogs these days.

As far as stock markets go, it is quite apparent we are in a asset deflation period. It is also quite apparent that this will not going to continue for a long period of time given the extraordinary monetary supply inflation that is going on right now. As such it is absolutely the worst advise imaginable to recommend people should be totally in cash. That boat has sailed. The time now is to start buying harder assets. Yes, you might have to wait a while. But maybe not. The other side of this may be merely six months away.

Investors: Down the Rabbit Hole

Why exactly do the CPI and GDP deflator have to have anything in common? One is a basket of consumer items, the other is prices for domestically produced goods and services in the economy, not based on a fixed basket.

Since the GDP deflator is based on the domestic economy the primary source of inflation in the US economy, oil prices, is factored out. That is why the rates are very different.

When the Market Runs Out of Lifeguards, Will You Sink or Swim?

Look at IWM - this shows the idea that the damage was done last year even better than the S&P 500.

Wake Up America, You’re Sinking

Crikey what a bunch of pantied wussies you guys are. Wah Wah Wah.

I lived through the Great Depression and WWII. Let me tell you, America in a recession is still a dynamic and powerful nation with immense capability to solve ANY problem that might occur. The only things wrong with this nation today are the cruft that builds up in a society that has had it very easy for 60 years.

SO WHAT if some people cant afford a McMansion and three giant SUVs? That sort of a life is phoney plastic. What really matters in your life is how you affect the people around you, and what good you do in life.

58 Trillion Dollars needed for social programs, debt and so on? Let me tell you, that is NOTHING compared to what the true capacity of this nation is. We have a 15 Trillion dollar economy today, and it is full of inefficiencies. If the nation is really challenged that economy will generate TWICE that amount, and a 58 Trillion will melt away like a snowball in a blast furnace.

The U.S. Economy Is Holding On - For Now

You miss the point with respect to Mars - it is not like we are stuffing the landers with Franklins. The money stays here and is used to develop new tech, much which will be recycled into other applications, repaying the investment to the IRS 100 fold. Not to mention that the entire space program is equal to about one out of the hundreds of bailouts mulligans and do overs the Fed will support this year.

If you really want to save money, let a few banks fail.

Crunching the Numbers: It's Not a Recession

Two quarters of negative GDP growth is a very simplistic definition, one that almost no economist buys into.

The Top 5 Looming Financial Issues

Hmm.... the consensus is that the sky is falling. Gold is way up, despite the fact it has no productive value and earns no income.

I know! It must be time to start buying equities.