Satyajit Das:Bear Market of epic Proportions

Quote from Mvic:

The later is more likely if the $ craters. This is one of the risks of playing a global contraction by shorting US Equities, you may be right in real terms but make nothing due to the $ falling and US equities staying flat or even rising but less than the % the $ declines as has already been happening.
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As usual you make the best post on this thread.

I'm amazed when I hear dollar bears say, "I'm shorting stocks, selling my home....." That's precisely the WRONG play. As you allude, asset appreciation is very much tied to currency depreciation. It's like talking to kindergartners around here....
 
maxpi: wasn't directing the morality stuff at you. That was meant for those folks who keep beating up on Ben for doing this rate cut, as if he had any choice.
You see all this stuff about him, but no one comments on Mervyn King, who followed the line those folks who beat up on Ben would have liked to see Ben follow. The result? A bank run, and huge recriminations. Also, the pound fell to a multi-year low against the euro.
Around here, it's like it never happened. Doesn't fit into their propaganda re the dollar and Ben.
 
Bearish? To countertrend technical traders maybe so, but where is the highway vola? It seems to be a one way street right now. Look at 99/00 vola, it's a yo-yo, same goes for 02/03, there has to be multiple attempts at all time highs and a break of a weighted support area for the whole world to agree with bearish analyses of any one individual. A bull market that just keeps on advancing like it has been since 02 will not go into a PROPER bearish phase that easily, ImO vola has to increase both ways before there is a chance of a major decline, otherwise this bull will take out all time highs from 99 and will continue on its way until the time it stumbles into a definite area where bulls will put on their bear outfits, in masses.

And in respect of government intervention ImO it is limited, PPT helps to sustain/support bullish market activity on intermediate basis only, but when markets overextend there is little they can do to stop hysteria. Look at the steps that the British government has taken in respect of the Northern Rock, it is a private bank after all and in financial difficulties, firstly the government warrants safety of all deposits with NR, then it warrants all deposits in all UK banks upto £100,000, how far will they go? Yes they will attempt to sustain calm, but it will not be constante, just think back 7 years.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1615748>
 

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Had the opportunity to read through Satyajit's paper today - excellent read, I think I will look into his books. Thanks for posting this.
 
Quote from JSSPMK:

Bearish? To countertrend technical traders maybe so, but where is the highway vola? It seems to be a one way street right now. Look at 99/00 vola, it's a yo-yo, same goes for 02/03, there has to be multiple attempts at all time highs and a break of a weighted support area for the whole world to agree with bearish analyses of any one individual. A bull market that just keeps on advancing like it has been since 02 will not go into a PROPER bearish phase that easily, ImO vola has to increase both ways before there is a chance of a major decline, otherwise this bull will take out all time highs from 99 and will continue on its way until the time it stumbles into a definite area where bulls will put on their bear outfits, in masses.
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There is a reason why the S&P can pop back up that fast since mid-2005.

As I recall, S&P changed its calculation method of the S&P index in mid-2005 to a modified version of the true capitalization weighting method. That means, it is going to weight each stock based on flow, not the true # of outstanding shares.

The old high in S&P 500 has to be recaculated using the new method to give a proper comparison.
 
Quote from trefoil:

maxpi: wasn't directing the morality stuff at you. That was meant for those folks who keep beating up on Ben for doing this rate cut, as if he had any choice.
You see all this stuff about him, but no one comments on Mervyn King, who followed the line those folks who beat up on Ben would have liked to see Ben follow. The result? A bank run, and huge recriminations. Also, the pound fell to a multi-year low against the euro.
Around here, it's like it never happened. Doesn't fit into their propaganda re the dollar and Ben.
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I just responded about the morality issue because you introduced it to the thread and I had something to add..

The article and ensuing thread is a great one, thanks to the originating poster for the link.
 
Quote from Lawrence Chan:

There is a reason why the S&P can pop back up that fast since mid-2005.

As I recall, S&P changed its calculation method of the S&P index in mid-2005 to a modified version of the true capitalization weighting method. That means, it is going to weight each stock based on flow, not the true # of outstanding shares.

The old high in S&P 500 has to be recaculated using the new method to give a proper comparison.
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Point taken, but I was trying to make a point about volatility.
 
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