A New Bubble Has Formed

I have a very bad feeling about this market.

are things really 36% better than they were on March 9th? That said, this stupidity (IMO) may continue for a while because of dumb money and earnings.

I think a lot of dumb money close to the bottom as they just gave up and threw in the towel and put what was left of their funds into money markets and treasuries. The rally began to coax these people back into the market. That creates upward momentum and encourages more dumb money to come back in. When the bids dry up though...

Company earnings have been better than anticipated, but that's merely an illusion. Revenue has declined and any earnings gains are due to cost cutting - a process that can't continue. At least not without jacking up unemployment and increasing earnings. The effects of lower revenue and government investment crowding out private investment will be revealed in future quarters and then.....

I would feel like the market were much more in tune with reality if the rise had been slow and steady, not manic and breathless.
 
Quote from Angrycat:

I have a very bad feeling about this market.

are things really 36% better than they were on March 9th? That said, this stupidity (IMO) may continue for a while because of dumb money and earnings.

I think a lot of dumb money close to the bottom as they just gave up and threw in the towel and put what was left of their funds into money markets and treasuries. The rally began to coax these people back into the market. That creates upward momentum and encourages more dumb money to come back in. When the bids dry up though...

Company earnings have been better than anticipated, but that's merely an illusion. Revenue has declined and any earnings gains are due to cost cutting - a process that can't continue. At least not without jacking up unemployment and increasing earnings. The effects of lower revenue and government investment crowding out private investment will be revealed in future quarters and then.....

I would feel like the market were much more in tune with reality if the rise had been slow and steady, not manic and breathless.
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Very good points......

The question is not whether we are in a bear cycle, we are....the question is are we in a cyclical or a secular bear cycle.

If cyclical, then this bounce could mean something...if we are in a secular bear cycle, which I think we are, this bounce will sting the stock-holding bulls hard enough to think twice on the next bounce.

Of course, for those of us who just "trade", up/down is the same coin ....
 
Quote from Barth Vader:


Of course, for those of us who just "trade", up/down is the same coin ....
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Exactly - although uni-directional moves with dying volatility are no help to traders.

The only reason I worry about this vicious rally is that when the equally vicious correction comes (and I have a feeling it will as the government is even more in control of the economy now than at any time in history save the Great Depression), the SEC will come up with shiny new dumb rules to screw things up even more. In other words, it will pile regulatory risk on top of market risk and the behest of the idiots who have decided to buy at the top and who will be bankrupted by their decisions which they will dutifully blame some scapegoat for. I'm sure that they'll demand public executions of short sellers.
 
bubbles are at the top.

this isn't a bubble.








Quote from MrDODGE:

It is right infront of your face. Real estate and financial equities are trading like bubble stocks. Take a look that their charts, they have gone parabolic off the March 9th lows with no real pullback. Furthermore, they increase at a rate of 10%+ no matter the news stream. Several of the major banks are almost back to their pre credit crisis levels.

What other time do stocks go up 150-300% without a pullback? It has to be a bubble!
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Quote from Angrycat:

I have a very bad feeling about this market.

are things really 36% better than they were on March 9th? That said, this stupidity (IMO) may continue for a while because of dumb money and earnings.

I think a lot of dumb money close to the bottom as they just gave up and threw in the towel and put what was left of their funds into money markets and treasuries. The rally began to coax these people back into the market. That creates upward momentum and encourages more dumb money to come back in. When the bids dry up though...

Company earnings have been better than anticipated, but that's merely an illusion. Revenue has declined and any earnings gains are due to cost cutting - a process that can't continue. At least not without jacking up unemployment and increasing earnings. The effects of lower revenue and government investment crowding out private investment will be revealed in future quarters and then.....

I would feel like the market were much more in tune with reality if the rise had been slow and steady, not manic and breathless.
More...

More like, are they 60% worse from 2 years ago? The answer's no. The stress tests are leading us out of the woods and have provided a measure of certainty about the financial's future earnings.
 
Quote from bwolinsky:

More like, are they 60% worse from 2 years ago? The answer's no. The stress tests are leading us out of the woods and have provided a measure of certainty about the financial's future earnings.
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Change the accounting rules and pump the financials with massive amounts of money from tax payers and beyond and of course things are going to look positive.
 
Quote from S2007S:

Change the accounting rules and pump the financials with massive amounts of money from tax payers and beyond and of course things are going to look positive.
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It can very much be argued marked to market is why we're at this stage, and there's no talk of repealing that.
 
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