The Coming Bear Trap
- Thread starter calibertrader
- Start date
Ha ha ha your head is in the sand.
All speculation and overblown.
Subprime is justa bucnh of hype by the media to get peopel to sell stocks so the money guys can buy cheap and it isn't a big deal at all. Only 2 public companies were affected. There has been NO spill over and won't be.
No more terror in the US cause we disrupted all the teror camps and the war on terror is working
No recession. As long as I see teens with ipods and expensive cellphones and other shit there is no recession.
Nope. Currency collpase are very rare and usually dont affect US market much
The time 2 buy is now.
Major gap-up on monday
The nasdaq will probably gap up 1% and rally perhaps 2%. The dow and S&P will also rally.
There will be TONS of buying and huge volume as and his will continue for the rest of the week
Um hum the bottom was retested last week. The doublebottom confirmed.
There is no reason to sell, therefore you buy.
Um also GOOG will go up 30 points soon
And LEND will go to 17
And NEWC.pk will go to $24 cause subprimes will return . Subprimes aren't dead and neither are mortgage and lending. Housing market huuuuuuuuuuuge and not slowing down.
Currency collapse is a feasible answer.
I'd have to say the lending scandal is going to do it...I don't think it has to be subprime spilling into prime...these guys were getting prime candidates into places they couldn't afford too using wild west lending practices.
One of my most bearish companies I'm following is Countrywide....the CEO was on CNBC last week practically begging the Fed for a rate cut, all the while stating that his company would be the ultimate benefactor when the whole subprime ordeal was done and gone. The catch is that he's unloaded over $2M in stock this month alone and has depleted his holdings to next to nothing...I smell smoke and I think by mid-summer this whole RE bubble really hits the financial markets hard. Overpriced, overstocked, overvalued, overbuilt, etc.
I'm extremely bearish for the next year or so...being long is going to get bumpy in my opinion.
Not gonna happen
Quote from S2007S:
Are you serious, this is something I should print out and read everyday before I start my day. This has got to be one of the top 10 posts.
NEWC at 24 is pushing it.
But he may not be far from the truth ...
Lets come back to this soon. It will be fascinating, regardless !!!
remember, BAD NEWS is being priced into the market. When the markets don't move down on bad news anymore, you know its bull mode once again. What China did today on that interest rate tightening was a VERY good sign for the broad markets (for the bulls).
Remember we aren't trading current news; we're trading the future outlook, not the future's 'reality'. I happen to agree we're on potentially shaky ground and can tell you 5 potential weaknesses that will blow up the economy:
1-subprime
2-credit crunch / no $$ for consumer to spend
3-high energy and commodity costs killing profits
4-market pessimism and fear
5-poor fiscal policy in US, ie social security / medicare / entitlements / debt
And 6 potential strengths:
1-subprime and housing worries have already discounted existing multiples, and people may realize risk premium has disappeared (or closely) from the market. Everyday data points come out which put seeds of doubt into the bears' minds that perhaps the trade is over.
2-long term inflation trend is driving up earnings and will keep demand for stocks and return high. Remember (this can be construed as negative too), dow/etc. returns indexed to inflation are relatively meager and show the equity markets are really ways to avoid losing to dollar devaluation. So if this is true, continued inflation will merely continue what has always happened - dollar goes down and markets 'appear' to go up.
3-poor fiscal US policy creates huge supply of bonds, which lowers long term interest rates, which in the end makes it cheaper for companies to RAISE $$$ for investment. (leverage is cheaper)
4-energy and commodity prices in a moderate range (ie under $70 oil) that has been absorbed in the past without huge detriment may allow the consumer and company margins to do relatively well.
5-obscure data facts that bulls can spin into reasons that the economy isn't so bad: ie GM is actually MAKING A PROFIT !!!
6-China GDP growth (9-10%) will continue, and is the machine driving everything else. Even if it goes to 6%, or 4% down the road, it is still growth. That is not recessionary, and will be contagious.
So there you go. The whole thing is a massive mindfuck, and we're all trading psychology, not anything else.
Good, sensible post.
The permabears call for all of this doom-and-gloom every time we hit a 5-7% correction. It's always the end of the world as know it.
Also, 2000-2002 was the worst bear market since the Great Depression. Is it possible we could see another plunge like that around the corner? Sure, anything is possible. But back-to-back crashes like that are very unlikely according to hundreds of years of stock market history. But who wants to talk history and probabilities when you can blindly speculate about sub-primes, terrorism and carry trade horrors that still haven't materialized?
The permabears call for all of this doom-and-gloom every time we hit a 5-7% correction. It's always the end of the world as know it.
Also, 2000-2002 was the worst bear market since the Great Depression. Is it possible we could see another plunge like that around the corner? Sure, anything is possible. But back-to-back crashes like that are very unlikely according to hundreds of years of stock market history. But who wants to talk history and probabilities when you can blindly speculate about sub-primes, terrorism and carry trade horrors that still haven't materialized?