basehitz

The Financial Crisis: Nowhere Near Over

“This indicates that Goldie is bearish on both the euro and gold. which hints that Wall Street’s finest are likely betting on a US Dollar rally”

The trade has been dollar up, stocks and commodities down, and vice versa. The inverse correlation was shown clearly by Karl Denninger in a chart here:
“The dollar and S&P 500 correlation . . . in July it became nearly-perfect”
market-ticker.org/arch...

And if Goldie is right on financials bearish bet, the market won’t fight that. Since Goldie’s results last 2 Qs shows they almost never have a losing day trading, you gonna bet against them?

I need to rephrase the author’s following statement:
“Given Goldman’s incredible access to and close relationship with the regulators and federal government”

That should read:
“Given Goldie’s directives to it’s wholly owned subsidiaries, the Federal Reserve and the US Treasury. . . “

Dennis Gartman on Gold, Oil, Government and the Economy

To underscore ilster's comments:

Gartman says

"yes, we have relatively large amounts of debt, but you can go back to the recession of 1974; you can go back to 1980-81; you can go back to the recession of 1907, and you will see the same arguments—that the world is too debt-laden. And the same arguments, the same language, the same verbiage was always written in exactly the same circumstances. Guess what? We moved on. This time might be different, but I’ll bet that it won’t be."

Geesh! OK, more homework. First the overview. The time periods Gartman refers to as analogous were times where out debt to GDP ratio was NOT comparable to today. Right now, it is higher than it ever has been in history. EVER! The ONLY time it was even close. . . ready for this? . . . was 1929. Now the homework, as opposed to the Gartman's unsubstantiated logic, Jeremy Grantham issued a report printed in Barron's Feb 11, 2008 and Marc Faber issued an extensive report Oct 9, 2005 on his website. I urge the reader to access both. The chart in Faber's report of Debt vs GDP shows this ratio as modest in the early 1900s and from the 1940s thru 1970s. Even the early 80s was reasonable. These are all the periods Gartman refers. Enter Alan Greenspan and the explosion of credit vs GDP since the 80s. There were only 2 periods in our history when debt vs GDP exploded. . . now. . . and . . . ready for this. . . 1929. Dates Gartman cites as explaining away the problem did not have this condition. The basis of his argument is false. I once respected Dennis Gartman. It seems now his celebrity has clouded his analysis.

Dennis Gartman on Gold, Oil, Government and the Economy

Gartman states "Do I believe that we’re going to run out of crude oil in the next 100 years? Not on your life"

Rather than draw such a conclusion as this from such anecdotal logic as OPEC's failure to discipline themselves in the past, Gartman should consider many, many other considerations. For readers interested in studying something that is actually thought out, I suggest a book entitled "Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy" by Matthew R. Simmons. His arguments are detailed and conclusions credible. If Mr. Simmons is even directionally right, Mr. Gartman's overreaching statement will prove an embarrassment. The market has a habit of teaching humility to the arrogant.

36 Opportunities for the Beginning of the Bull

Bill,
Thank you for your thoughtful post. I invested through the last bear market. Today, I can find prices of solid companies at the last bear trough, in spite of improved aspects. For example, last week bought JBL near $9. They just reported earnings, positive cc, and stock was bid up to $12 premarket. In spite of earnings being out, it was still trashed. Finding value is easy. Staying patient is tough.