market ace

Stocks Threatened by Inflation

Hardly anyone pays any attention to purchasing power of their investments anymore and all they care about is the "gain" in terms of the almost worthless US $.

Continuing to monitor one's wealth by dividing their wealth by the price of gold is a simple way to tell whether you are winning or losing.

The market seems to be highly overpaying for stocks today based on projected earnings and high P/E's that make little sense and throwing in inflation will only make it worse as the author says.

To Heck with Fundamentals: Dow 11,000 Is Up Next

I guess what you are saying is that a lucky guess makes up for brains. Sometimes that is true, but to conclude the market is where it should be shows a total lack of intelligence. Agreed the panic of last Oct and Mar were probably overdone, but so is the new panic buying.

Oh you forgot to mention that Even DOW 10,000 today is worth less than 75% of DOW 10,000 in 2000 and that the main rise recently in the markets is the crashing dollar that will evemtually take many of you over agressive buls for a long ride down a steep mountain when you finally realize that all the "profits" you made and forecast won't buy you a cup of coffee..

Break-out or Fake-out?

The whole financial world and the US economy are riding the gov't and medias giant FAKE OUT

The FED is destroying interest earnings for millions of retirees and therefore destroying income necessary for recovery just so they can pimp for their failed banks. Bottom line: Right now, $1,000 invested in a 3-month Treasury bill yields a meager $1.20 in yearly interest. At that rate, just to match the 5 percent interest you could have earned on T-bills in early 2007, you’d have to leave your money sitting there for 42 years! U.S. savers are obviously getting shafted.

The U.S. Treasury Gobbling Up Available Credit, Crowding Out Nearly All U.S. Businesses!

Due to giant bailouts and out-of-control federal deficits, the U.S. Treasury is now borrowing money at the fastest rate of all time, hogging nearly all available supplies of credit. Meanwhile, American businesses and average consumers are getting shut out or even shoved out of the credit markets.

In the first half of this year, the Treasury has stepped up its pace of borrowing to annual rates of $1.4 trillion in the first quarter and $1.9 trillion in the second quarter. That’s 3.5 times and six times more than last year’s pace, respectively.

Meanwhile, businesses are getting crumbs: Last year, banks provided new credit at the annual pace of $472.4 billion in the first quarter and $86.7 billion in the second. This year, on a net basis, they’re not providing any credit whatsoever. In fact, they’re actually liquidating loans at the rate of $857.2 billion in the first quarter and $931.3 billion in the second.

Ditto for mortgages. Last year, mortgages were being created at the annual clip of $522.5 billion and $124 billion in the first and second quarters, respectively. This year, they’ve been liquidated at an annual pace of $39.3 billion in the first quarter and $239.5 billion in the second. WIth a foreclosure every 13 seconds this will only get much worse.

For consumers to borrow on credit cards and with other consumer loans is even tougher. Last year, people were able to add to their consumer credit at annual rates of $115 billion and $105 billion in the first two quarters. This year, in contrast, they’ve been forced to cut down their credit balances at annual rates of $95.3 billion in the first quarter and $166.8 billion in the second quarter.

Clearly, consumers, small businesses, and even larger businesses are also getting shafted.

But Wall Street Traders Reap Gigantic Rewards While Average Workers Face Worst U.S. Job Market Ever Recorded!

So it should come as no surprise that, with the U.S. Federal Reserve virtually guaranteeing a fantasy land financial environment for banks, GS has hit the jackpot this year: The bank has accumulated a bonus pool of an estimated $16 billion to dish out to an exclusive group of its heavy hitters as part of Wall Streets pool of an estimated $140 billion. That’s enough to cover a $50,000 bonus check for each and every household living in Los Angeles, Chicago, San Francisco, and Detroit.

Meanwhile, all across the USA, with small and medium-sized businesses unable to get credit or hire Long-term joblessness has hit the highest level in at least a half century: The share of the unemployed who were out of work for at least six months reached 35.6 percent in September, the most since the U.S. Labor Department began keeping statistics in 1948.

More than 5.4 million people have been unemployed for at least 27 weeks, with 1.3 million expected to exhaust their benefits by the end of this year. 15 million unemployed Americans are competing for 3 million available jobs, the worst on record, while 35 million remain on food stamps.

More than 7.2 million jobs have been lost in the past 21 months. In contrast, in the 30 months of the past recession, only 2.7 million jobs were lost. The official unemployment rate, at 9.8 percent, is just the tip of the iceberg. The true unemployment rate, including part-time workers who can’t find full-time jobs and workers who have given up looking, is 17 percent according to the U.S. Labor Department and 21.4 percent according to Shadow Government Statistics.

Anyone thinking that this Stock Market miracle reaching over 10,000 today while the US dollar is getting crushed is not a head fake will soon learn a lot ablout false hope.

Nothing Fuels a Market Rally Like Free Money

Pretty good analysis and I quit playing thier games long ago when fundamentals went out the window and DD means nothing. I probably missed out on some easy money, but I sleep very well at night not playing an ultimate losing game.

I sure hope no one figures out that this constant sudden surge in the last 5 minutes every day and the way above average up days does not mean recovery is ruling, but manipulation is. Hopefully the S&P will hurry to 1,250 so it can be shorted safely again.

Then again if BO can win the Noble peace prize anything can happen next it may be the Noble prize for economics.

The 'Buy Anything' Market

This is the most honest article I have read in along time, but there may be a few reasons below the surface that are driving at least some of this insanity.

The charts and technicals suddenly look better to the computers doing the trading as many of the big dips from last year have now fallen off of the charts and stats.

The ETF mania causes stocks to be grouped by industries or indexes with little regard for individual performance or fundamentals and ETF buying is now a market force.

Pure greed is overriding too many decisions with too many investors afraid of missing out and creating a psychology of panic buying and still pushing some short sellers into covering.

However, I think a big driver is simply the notion that cash is trash and so with the dollar diving holding any other asset is a plus at the moment. Ultimately the falling dollar will cause other problems costing investors dearly in purchasing power, but the gains look good on paper and beat the losses possible from holding dollars and not investing them.

Unfortunately, there are too many conflicting variables out there in the form of considerations like:government interventions, herd mentality buying and selling, quick moving currency valuations, artificial interest rates and potenial inflation affecting investments decisions far more than individual fundamentals of individual companies I used to be an avid DD guy, but have now found it to be a waste of time.

One Good Thing About Today

I cannot believe what I just read here. The whole economy and all of our ills just evaporated and markets are sound again, because we are suddenly forgetting about huge losses from 13 months back and pretending they never happened.

I'll bet people that lost their butts (real money) in the Wall Street fiasco (soon to be repeated again) will celebrate by buying more financial crap just becuase some moron like you says the money they actually lost should now look like a percentage gain because of some short term memory loss. GS and the banks have gotten away with this so far, but I'm not sure it will work very well for indexes sucking investors back into these hopeless markets.

I cannot belive a fiancial writer has fallen to these depths, but I hope he is dumping a lot of his personal money into these "new" and improved markets now that they are on the steroids of deceit and pretend percentage gains..

Is the Jobs Data a Concern?

I do not belive this staement at all

"Finally, realize that investing is messy. There are no magic numbers that tell you when to buy and when to sell."

I became a firm believer in 5% trailing stops long ago as they are a sure way of how to know when to sell. The 52 week lows are also a great guide as to when to buy again. Sure day's like today can trigger some that look bad right now and the last down turn triggered a lot that have since gone back up (until today anrway). However, in the longer run this will prove to be a winning startegy even if I miss the very top.

The mantra of "less worse" cannot carry a market forever, especially with a P/E of over 130 and reality again setting in. Mr; Bernanke's recession may be over, but for many others it is just beginning.

When I am 100% in cash it will coonfirm that this rally is over ad I will be glad to play it this way and wait for the next huge drop before entering again.

Due for a Correction? Market Is Already Priced for Grim Future

I know people want to believe this nightmare is ending, but it is obviously just beginning. Just because the FED throws money at the big Wall Street firms and they again push speculative bubbles in their same greedy manner to prop up failing manipulated markets, should not give anyone reason for much optimism or beleif that such optimism can be sustained.

How can anyone say a share of stock is worth anything, let alone multiples of hundreds of times a companies real earnings. Most stocks do not even pay any dividends, or pathetic dividends at best, so they provide no real value. The only value they have is just like the chips used in vegas where you can bet with them and the odds are stacked aginst you. Sometimes people actually think these pieces of paper, (like FR$) have value and create wealth, but that is just a myth and it all comes down to trust and artificial values that can disappear in a heartbeat.

To even imagine an economic "recovery" that even begins to resemble the "good old days" of a few years ago takes a lot of imgination and keeping ones eyes tightly closed to prevent seeing any reality all around them. Personal, corporate and certainly gov't debts far exceed what could ever be repaid and economist somehow keep pinning hopes on creating more debt to boost a dead economy.

Some will play the markets and win, but there will always be far more losers than winners and "believing": in these markets again takes more guts than brains.

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

All of the above comments have merit and the markets are sloppy gambling halls driven by excess greed and FED money, which will all come tumbling down when reality really sinks in - BUT also rememeber tc cover your backside.

Is all of this money pouring into stocks and commodities (think especially oil here) because da boyz know the dollar is sinking like a rocjk could be seriously devalued very soon and they do not want to be caught holding US dollars.

Just a thought, when markets act so irrationally and it may nor all be because of media hype about green shoots.

Weekly Market Recap: What Year Is This, Anyway?

Let's give the gov't (ie Goldman) credit here. They are doing something right - The Plunge Protection Team is really on the job and successfully propping the markets up.

The media is also doing its job ignoring reality and repeating every economic lie and phony stat the gov't can produce.

Congress keeps drinking Obama's kool aide and thinks they can spend money forever to "stimulate" the economy and prop up failing companies.

The FED is doing its jobs by artificialy killing interest rates so every retired (or soon to be retired) mom and pop has to become a speculator to try and earn enough to survive or try and recoup their horrible losses. The FED keeps feeding tons of speculative capital to the big banks (with the false hope they might loan it to main street - that doesn't want to borrow it) which also produces more bubbles in stocks as the money has to go somewhere to justify outrageous bonuses. The FED using the old shell game to manipulate its money printing and make it look like foreigners are still buying Treasuries that they are actually buying certainly does earn Benny another term to "calm" the markets and perpetuate a false rally.

So all is obviously well in the land of Wall Street and the US stock markets even if Main Street is crashing and burning as you amply point out.

Morgan Stanley Sees V-Shaped Recovery: I See W-Shaped Recession

Well I'm sure MS can concoct a smoke and mirrors scenerio about 3rd qtr GDP growth, because car inventories will be blaoted to unsustainable levels again, but what then? Jobs are disappearing, income is declining, a few real estate auctions boost housing sales while a shadow inventory of millions of homes waits in the wings. State and local govt's are all broke and our quality of life will be cut to the bone when this all really hits the fan. When recovery only looks like maybe keeping mail delivery a few days a week and keeping a few county hospitals open while begging the Chinese for enough money to prevent a total national BK, I do not think people should get carried away with the delusion that the worst is over.

The bank balance sheets are a disgrace and "trading" profits from pure manipulation cannot be sustained forever. The FED and Gov't have thrown everything they have at this mess to create a few green shoots, but I'm not sure when we will actually see the roses again.

Investment Advice: Keep It Simple, Low Cost and Long-Term

With all of the Wall Street manipulation, programmed computer trading, economic information and mis-information, gov't interventions making a shambles of historical data and charts and financial accounting rule changes clouding reality, no one can depend or rely on any one to consistently beat the markets as they are all guessing and some are just luckier than others.

However, one analyst has consistently said investing has now been made very easy. It can be sumerized in just three words. "buy gold, silver and oil".

Rose-Colored Glasses

Your analogy is right on, but rose colored glasses may be just for the average Amerian to view the deteriorating economy as most of Wall Street now has blinders on. Of course the gov't has been wearing blinders for a long time and will soon make them madatory for everyone. For example can you imagine the "favorable" results of "stress tests" they just published did not even include the word "derivatives". Surely they know they exist and will bring down the big banks just like they did AIG and others, but apparently they fooled a lot of people so far.

Geithner's PPIP: Are We Really This Stupid? - Barron's

Geithner is just bending the rules and attempting to break the rules to again shift wealth to his Wall Sreet buddies (and masters). First we do away with M2M accounting to fool people, then we let the banks participate in entities to buy their oen assets at a premium and then the tax payers eat the ultimate losses. What a deal Mr. Geithner. Even more profitable than not paying your taxes don't you think?

This guy needs to go quickly and the gov't needs to quit giving in to "financial terrorism" that continues to use extortion to steal money form the txpayers.

What Marks the Bottom?

Why does anyone even care about the bottom any more? There will be a lot of new bottoms and new highs on a regular basis and ever increasing volatility into the future. I do not think anyone can find a bottom and ride it for years to a top as was once the norm. In these markets and for the foreseeable future you will have to be a trader and ride the waves with the ability to jump on and off very quickly.

In the modern world when markets are going up they do so on technical rallies and short covering so no amount of bad news can stop them. Conversely when the bears take over no amount of good news can save them. You have to learn to let the market dictate their trends and then go with them as any extended patterns in either direction are a thing of the past..

The big short term problem is all of the gov't intervention and its effect on the markets on a daily basis This does not allow the markets to move in any direction for any extended period of time. When markets are moving wildly every time someone in gov't makes a statement they are operating on a hair trigger and so small investors have a hard time staying on course.

While some are busy searching for a bottom others are making money and looking at the predictions for the DOW and S&P to reach great heights again this year from some apparent bottom appear far fetched at best.