wagman

Goldilocks Dow and the Three Bears

If you look at a chart of the dow priced in real money (ounces of gold) the bull run is exactly that – a blip along a steep slope down from start of the bear market in 1999. The bear market in terms of the nominal dow has only just begun and has a long way to go. Elliottwave International has been featuring this chart in their various publications for quite awhile. (elliottwave.com)

This Isn't a Bottom, It's a Disturbance in The Force

I'm with Freefalling. This is the first of several disturbances in the force that will be experienced until a lasting bottom is reached. We are nearing a tradeable bottom now, but certainly not the bottom.

If you are a value investor then you are buying now with funds from the positions that you have stopped out of on the fall. You pretty much have to be a buyer since everything looks like a bargain to you compared to last year, last month, last week, etc. Hopefully you are buying high quality companies that pay dividends and will still be around when the eventual bottom is reached and once again the force of optimism pokes its head up like a tiny flower in the desert ashes of overwhelming pessimism.

If you are trader or market timer then you are acting on whatever your technical analysis, previous experience and instincts are telling you to do and keeping your wits about you.

If you are neither of these then safest cash equivalents in the safest institutions are the place to be right now.

Cash as king has only just begun and preservation of your precious capital is quite an admirable strategy. When the dust settles and the next great bull market is getting it’s legs and everyone is saying how stocks are the worst thing you could ever spend your money on then you will have the opportunity of a lifetime. We are not there now and still have several years of bear market downslopes and countertrend rallies until we get there.

May the force be with you always Jedi knights. All of this will come to pass right here and not in a galaxy far, far away.

Stimulus Tracker: Results Are Scary

Well said Zooey. Disinflation/deflation is the operative force right now. Somewhere along the line here the realization that owning a home is a consumption choice and not the American dream will set in. If you need to be bailed out of your mortgage then maybe you shouldn't own a home right now. Homeownership can be just as big of a value trap as equities in a deflationary/disinflat... cycle. Rent, consume less and save for better times ahead (probably several years).

The Calm Before the Storm?

The bailout will happen. Politicians are simply doing what they always do - maneuvering to do what they perceive to be best for their chances to stay in office. Bernanke is doing what he said he would do all along - throw as much liquidity as he can into the market to prevent 1929 style depression. Paulson is serving himself and his masters. No bailout will certainly lead to a hard crash ala 1929-1932. Bailout will likely prevent this from occurring. Unfortunately deleveraging of the massive credit inflation will not be stopped by any bailout measures. There will simply be a much longer, slower deleveraging process - think Japan and the lost decade (now 2 decades). Choose your equity and commodity investments very carefully. There are plenty of value traps remaining and prices for all investment classes have alot further to fall before we finally hit bottom and start a new cycle. Be careful, be safe, take care of your health and your families. There is no easy solution here.

I'm Speechless: Palin on the Bailout

Thank you rmgreenwald. I found the Palin clip to be amusing and discomforting. I also find the multiple partisan political comments posted here to be amusing and discomforting. The bailout is occurring because these very same politicians from both political parties have been grabbing all that they can for themselves (political contributions to keep them in office) from all of these Wall Street players year after year then rewarding the contributors with favorable legislation. That so many of our commenters actually think that if their candidate gets elected it will make a difference is most discomforting. If I want to tune in to a bunch of political ranting and sniping the choices are endless. This is primarily a financially oriented website and how we manage our investments and finances actually does make a real difference in our lives. Perhaps you can all spew your political venom elsewhere.

The Paragraph That Changed the World: Will Treasuries Crash?

the only certainties are death and taxes and you can be certain that our tax burden will rise as a result of this bailout and for what? to stabilize housing markets and help us to be able to get affordable mortgages. hardly. politicians are once again wanting to be reelected and are throwing their sponsors a bone and hoping that the rest of us will reelect them as we do with regularity so they can continue to slop at the trough of government largess. i'm with econ 101 here. let the markets work things out for themselves. that way those who overpaid for their houses, stocks, bonds or whatever can take their losses and those who were more responsible with their investment choices and saved rather than spent during this long period of credit inflation are not being penalized for the sake of "special interests". good luck to all of you who are buying this rally and looking forward to this being the new "signal event" indicating a market bottom. credit deflation is inevitable and will march onward until satisfied. this action does nothing but delay it for awhile, benefitting certain sectors and individuals, hurting others, and being passed off as needed for the greater good. the ultimate irony will be when they are forced to reduce and eventually eliminate the mortgage tax deductions that have been the other ongoing stimulus to encourage you to overpay for what is really just another consumption item.that is when john q. public will know that he has once again been fleeced and left on the hook for the biggest housing bust we are going to see in our lifetime. great time to be a renter and protect whatever you have for the time when there really is "blood in the streets" and then buy whatever you can with whatever you have left.

Financials and TED Spread Could Signal a Bottom for Corporate Profit Declines

Perhaps you should look at a more useful spread: the difference in yields between Moody's Corp. BAA (junk) bonds and U.S Treasury 30 year. The widening spread here forewarned of the first big leg down in this bear market, narrowed some into the recent bear market rally, and is now even wider than it was in April which augers much greater downside for stocks. So good luck, J. Clinton Hill, with your preparation for the impending bull market. I too am preparing by selling short with an eye toward the time i will need to be all out & into safe cash equivalents which will be used to buy back in to the impending bull market of 2011 or 2014 or whenever.

Bracing for Another Round of Credit Related Woes

As deleveraging of massive leveraged credit inflation continues things will get much worse. Deflation is the operative force now and PPT will not be able to stop this. I agree with the excellent post by wpdragon that the FED and U.S. Treasury actions are designed to prevent collapse prior to the election and definitely for the benefit of their insider cronies. Whidbey is also spot-on. The end for collapsing real estate prices in CA and elsewhere in U.S and Europe is not anywhere near in sight. History shows that bailout actions in bear markets bring lower stock prices vs bull markets where they do the opposite. This bear market has so far given us the Bear-Stearns bailout, opening of the FED discount window and several "suprise" target rate decreases. My guess is the Fannie & Freddie bailout will be the next shoe to drop and kick the banks, stock and real estate markets much further down.