woollyB

Newsletter Writers Are Increasingly Bullish

The psychological and economic backdrop of 2009 is very different than 2003-2007. Optimistic readings this extreme in light of the fundamental reality means one thing: LOOK OUT BELOW!

Expect a Spring of Retail Bankruptcies if Holiday Sales Don't Materialize

This is consistent with my experience. Everywhere I look I see people doing whatever it takes to survive a little longer, based largely on hope and assumptions that things have to start getting better soon. If those assumptions don't pan out pretty soon, things look pretty bleak.


On Nov 25 10:01 AM Snitzer wrote:

> Come the first of the new year there will be a mass reassessment
> going on as we all step back and try to get a feel for the coming
> year. For many small companies surviving 2009 was just the first
> storm to be weathered, Q1 2010 will be the critical tipping point
> for many of us. Looking around it's good to still be here, but looking
> ahead there are still a million things that can yet take us out.

Another Crisis Looms Right Around the Corner

What scares the perma bears is that the debt bubble that we are (not) dealing with right now is far greater than the one that caused the Great Depression. Notwithstanding his claims of Depression "scholarship," Bernanke & Co. are following the same patterns that were followed back then, and repeating all the mistakes that Japan made.

This isn't the end of the world. We will come through it. But not without a depression, no matter how hard we try to fight it off. The time to avoid a depression was years ago.

Mortgage Mess: A Quarter of All Borrowers Are Underwater

Just wait until the avalanche of walk-aways starts in the non-recourse states. There's only so far underwater a rational person will go before throwing in the towel.

Q3 FDIC Quarterly Banking Profile: FDIC's deposit insurance fund drops by $18.6B to -$8.2B, the second time in its history the balance has gone into the red. Problem banks swelled to 552 from 416 last quarter. Banks profited a collective $2.8B, while loan balances dropped 2.8% or $210B, the largest decline on record.

This news is obviously bullish because the market surged upward right when it came out. We do not second guess a rising market. The market knows all. (Except when it's going down, in which case it is driven by irrational fear.)


On Nov 24 10:26 AM MarketGuy wrote:

> yep, recovery abounds. Can't wait to hear the bullish spin-off on
> this data. The creativity (see: smoke and mirrors) of the pump crowd
> is now at fever pitch levels.

Still the 'Most Hated Rally in History'

The fundamentals never look weak at a significant top or strong at a major bottom. That's why analysts who focus on fundamentals never forecast the major turns. They're too busy extrapolating the current trend based on the fundamentals. If your outlook is correct 90% of the time but your portfolio loses 50% on the one time your analysis is wrong, you have a pretty serious problem.

In other words, fundamentals NEVER matter to what the market is doing. They are lagging indicators. The market normally trends in one direction, so the fundamentals appear in tune with that direction (once it is well enough established), and it makes sense to assume that fundamentals are driving the market, so that's what almost everyone does.

Could England Be Headed for a Sudden Stop?

Good post. Most of this is applicable to the USA as well.

It Was The Best of Markets, It Was The Worst of Markets

It's not just stocks moving up and down together, it's practically all asset classes because liquidity is driving everything. When liquidity is expanding everything goes up, and vice versa. It's unclear to me why the strong correlation between multiple markets isn't getting more attention.

The Weak Dollar Crowd Is Too Confident

I agree, for those of us who are staying safe, the forthcoming dollar rally is going to be fun to watch.

10 Reasons to Believe That We're in a Depression

Pretty tough to argue with that list. I keep telling people, they weren't calling it the Great Depression after a 50% stock rally and abundant green shoots in 1930, either.

Gold: Still Cheap Despite New Record High

Dow 36,000 anyone?

Gold Closing In on 20% Above 200-Day Moving Average

Gold looks like tech in 1999 and real estate in 2005. Nobody thinks it can go down. If you think gold can only go up from here, its all-time high, you should explain why "this time is different." And if the explanation has to do with inflation, the Fed, etc., well, there are always compelling arguments at the top. That's why it's a top.

Paulson Plans Gold-Only Hedge Fund

Classic behavior for a market TOP, launching new products and rationalizing further gains. This idea would have been a great call ... eight years ago.

Now that nobody believes gold can go down, gold starts to look a lot like tech in 1999 and real estate in 2005. If you think gold can only go up from here, its all-time high, you should explain why "this time is different." And if the explanation has to do with inflation, the Fed, etc., well, there are always compelling arguments at the top. That's why it's a top.

Google Phone May Be Data Only, VoIP Driven Device

A $20 monthly plan including voice and data is about what it would take to draw me into the world of smart phones, so I hope this is in the works. AT&T's network gets a lot of bad press but I'm thinking Google wouldn't go forward unless it were confident in the quality.

Housing Starts Plunge

This is bad news because the U.S. has such a dangerous undersupply of housing? I know it's a bad indicator for employment, manufacturing, etc. .... but at some point don't we have to face reality? Who is going to buy the millions of vacant and bank-owned homes that we already have?