jepittman

Global Markets in Review: Stocks Higher on a Stimulus and a Prayer

Bullish equity markets have always preceded an economic recovery, just as bearish markets precede recessions. Its just that they sometimes give false readings during the earliest stages of an advance (or decline). The market will herald the return of economic growth when it decisivly moves to the upside. IMO it is still a little early to write the obituary to the bear. But his days are numbered.


On Feb 08 07:59 AM constructe wrote:

> It's nice to see some short term bulissness even though long term
> everything remains bearish.
>
> The important fact is the bulishness is market bullisness not economic
> (no real fundamentals to back it with). And the other bulishness,
> as morph points out, is an even more worrisome bulishness: Bullishness
> on commondities and staples which correctly points to an unsustainable
> low treasury yield and possible inflation during a very bad recession
> later.

Is Buying Bonds Really a Good Idea?

Congratulations on a great trade. Keep us posted on what you like!


On Dec 31 04:18 PM dcb wrote:

> If you are looking to buy a bond fund it's too late because they
> have gone up too much and now the downside risk is greater than the
> upside. If you can build your own portfolio then you maintain the
> upside. I bought about 450K of bond funds at the height of the credit
> squeeze, and I'm happy to hold the LDQ, and investment grade funds
> I got at 87 that are trading at 100. At this point I'll loose more
> in taxes by not holding. After ZIRP there was no benefit, although
> european corporates may do well as the ECB is further expected to
> lower rates. This may also be the case with emerging market debt,
> but after it has run up I wouldn't be buying edd right now

Is Buying Bonds Really a Good Idea?

I am wondering how long people are going to be happy earning 0 to 2% on their money sitting in the financial bomb shelter. There is an economic recovery coming likely sometime in 2009 and markets anticipate these things. While Felix's lumping together of all bonds and saying 'stay out' is specific enough for now, I wonder how long it will be before these record spreads between govies and lower grade corporates start to narrow? How many 'defaults' are already priced in? Mr. market is offering 10%+ in yield and opportunity for appreciation in a recovery. Would it not make sense to at least acknowledge we may not be going into a global dark winter and at least nibble?

Credit Crisis Watch: Signs of Progress?

Very good work. The thawing of the credit markets and return of normal money flows is key to the economy recovering. IMO this is a process rather than an event. The trends appear favorable. Fears will slowly abate and traditional economic incentives will reassert themselves allowing an economic recovery to gradually assert itself. As the author implies there is a ways to go but the improvement is apparant.

Credit Crisis Watch: Are the Markets Thawing?

It is still too soon for normalcy to return to these markets. I saw a good piece by Tony Crescenzi that looked at the credit market distortions immediately after the 1987 panic. It showed that it took several months for the markets to settle down and return to normal. His point was that as the emotions of fear and panic subsided so did the credit markets. It doesn't happen quickly but it does happen. It is likely we will experience something similar in this panic.