Kevin Walmsley

Options Trader Monday Outlook: Global Pandemic Edition

Great point on General Motors.

The market has rallied strongly over past weeks on news that the banks are now able to lie about their financial position, with the blessing of regulators and the accounting community. Now GM surges on news that the common shareholder will experience massive dilution, courtesy of secret meetings between General Motors' management, union representatives, and the Treasury Department.

It's time to start using the term "irrational exuberance" again. Or, "certifiably insane exuberance". Maybe.

A Bull Is Born, 2009

More like stillborn. Every single economic datum is deteriorating. EVERY SINGLE ONE.

Yes, you're right--the stock market typically leads upward before the economy does. But for that to happen, the market has to become cheap. It isn't. Even with the most optimistic crack-dream-induced forward earnings forecast, the market is trading at 14 times. That's not even slightly inexpensive, let alone cheap.

Sorry, but this is a sucker's rally. It might last another couple of weeks. After all, we can expect Barack Obama and his miracle workers to get nothing less than fawning media coverage, through the first week or so after the inauguration. Then the blinders come off again.