Too much Pessimism and too many shorts.

[dsq]

Quote from day7793:

Please add these to your post:


Sky is falling..
Titanic is sinking
This over now
Real estate will never come back
We are done
We are in a recession and this will never end
We are entitled to things we donot deserve.

why dont you shut up and jump off a bridge.

All you do is bitch about how bad it is look at the market negatively.If you are a trader you make money on the downside like on the upside.If you only trade bull markets then you are missing half the ride.This is a bear market,if you dont like it,stop bitching and posting your stupid rants and sit in a corner for a few years.
Actually since you have never traded a stock just go back to your mommys bed and cuddle up with her.You are a 14 yr old idiot.
Everybody here cant stand your bitching.You and your fictious posts are not welcome.You have never traded a stock/options in your 14yr old existence.Leave.Go post on myspace.

 

[HedgefundTrader2]

Quote from Bigpipn:

The Titanic full of federal reserve notes will sink in the rough seas of credit default swaps..

Feds have never sunk. They own your balls.

They have been playing this court for over 60 years. You do not know these Feds once they get on cutting rates they do not stop. The will flush out out all this gunk and negativity and pessimism.

Its low self esteem that causes this behavior and this doom and gloom.

 

[HedgefundTrader2]

Quote from dsq:

why dont you shut up and jump off a bridge.

All you do is bitch about how bad it is look at the market negatively.If you are a trader you make money on the downside like on the upside.If you only trade bull markets then you are missing half the ride.This is a bear market,if you dont like it,stop bitching and posting your stupid rants and sit in a corner for a few years.
Actually since you have never traded a stock just go back to your mommys bed and cuddle up with her.You are a 14 yr old idiot.
Everybody here cant stand your bitching.You and your fictious posts are not welcome.You have never traded a stock/options in your 14yr old existence.Leave.Go post on myspace.

I did not bitch anything. The [poster] bitched and I added few things. Sorry it riled you so badly, like you have eaten fresh cactus ?

How do you know I have not traded a stock/ option? Were you standing there in a white coat with your bean counter in hand and massaging my balls?

 

[MKTrader]

Looks much more like a long-term sideways market, a la 1966-1982. The 2000-2002 bear was a lot like the 73-74' bear inside that market. Personally, I think this sideways market (now 10 years, from '99-'08) will break to the upside faster than the '66-'82 one, but who knows. If earnings grow (even slowly) over the next few years and stocks trade sideways, valuations should start getting really nice. In '82, average P/E was something like 8....a sure signal to load up and hold on to stocks.

If you look at long-term history of the stock market, it's almost completely filled with sideways and bull markets. Bear markets are typically 1-3 years inside sideways markets. True long-term bear markets are very rare. Last one was during the Great Depression.

(OK, let all the permabears now try to convince everyone that we're in Round 2 of the Great Depression...)

Oh, and Japan is/was a totally different animal--definitely an apples and oranges comparison.

Quote from Capablanca:

Multi-year bear market cycle began with year 2000 dot com bust. Yes I know it sounds strange. The 2000 to 2002 fall was the first down leg. 2003 to 2007 was the return move that did not convincingly break above the 2000 highs. We are now looking at what is potentially the beginning of a leg 3 downward move.

The fundamental backdrop to this is a bubble during the stock mania of the late 90s transferred to housing that has now burst. If one recalls the 2000 bust, the Fed initiated a series of rate reductions that were touted to lift the market. It took two years for that to happen. During that time excuses proliferated as to why the market would head higher yet after each rally a downturn followed. Hey maybe this time the market can discount its way through a recession---but I wouldn't bet on it.

If you want an extreme example of the kind of problems being faced examine Japan after its bubble burst in 1990.

 

[MKTrader]

Another contrary indicator is how many clueless traders are allegedly "making a killing" by going short and selling every rally. It seems as easy as buying tech stocks in the late 90's or flippin' properties a few years ago. That means it won't last too long.

The same folks will get killed when the market moves back into a low-volatility bullish-sideways phase like it did post-S&L Crisis in the early 90s and from 2003-2006 after the tech wreck bear market.

 

[amedhussaini]

Quote from MKTrader:

Looks much more like a long-term sideways market, a la 1966-1982. The 2000-2002 bear was a lot like the 73-74' bear inside that market. Personally, I think this sideways market (now 10 years, from '99-'08) will break to the upside faster than the '66-'82 one, but who knows. If earnings grow (even slowly) over the next few years and stocks trade sideways, valuations should start getting really nice. In '82, average P/E was something like 8....a sure signal to load up and hold on to stocks.

If you look at long-term history of the stock market, it's almost completely filled with sideways and bull markets. Bear markets are typically 1-3 years inside sideways markets. True long-term bear markets are very rare. Last one was during the Great Depression.

(OK, let all the permabears now try to convince everyone that we're in Round 2 of the Great Depression...)

Oh, and Japan is/was a totally different animal--definitely an apples and oranges comparison.

good post. it'd be nuts to see another 10-20 year period of sideways price action with decreasing PEs.

 

[makloda]

Regarding banks going bankrupt: There is a good chance we will see a number of them. It would be right in line with the playbook of earlier periods.

Just like we did after 80/82 or 1990, hundreds of banks failed in that period combined. Not sure why some people here call for a depression now though, did we end up with a decade of depression after 74? After 82? After 2002? I don't see why today's economic backdrop should be far worse than any of those periods.

So who's the first big one? WM? NCC? C? Maybe too big to fail, but who really knows who's safe. The sooner we have the garbage removed from the system the sooner credit markets should stabilize.

 

[Specterx]

Quote from makloda:

Just like we did after 80/82 or 1990, hundreds of banks failed in that period combined. Not sure why some people here call for a depression now though, did we end up with a decade of depression after 74? After 82? After 2002? I don't see why today's economic backdrop should be far worse than any of those periods.

I think a prolonged period (like 7 years) of slow growth is far more likely than a serious depression. For example, I don't think that unemployment will go all that much higher. Job creation has been sluggish over the past few years because companies increased hours, outsourced, added automation and IT etc. rather than hiring new employees. Now they ought to cut back hours rather than fire people en masse.

All the same I think times will be very tough for wage earners in general and especially people at the lower end of the pay scale. 401(k)s and retirement accounts won't be going up (and indeed many will take big losses), people are loaded down with debt, and salaries will likely fall.

 

[eusdaiki]

Quote from MKTrader:

Looks much more like a long-term sideways market, a la 1966-1982. The 2000-2002 bear was a lot like the 73-74' bear inside that market. Personally, I think this sideways market (now 10 years, from '99-'08) will break to the upside faster than the '66-'82 one, but who knows. If earnings grow (even slowly) over the next few years and stocks trade sideways, valuations should start getting really nice. In '82, average P/E was something like 8....a sure signal to load up and hold on to stocks.

If you look at long-term history of the stock market, it's almost completely filled with sideways and bull markets. Bear markets are typically 1-3 years inside sideways markets. True long-term bear markets are very rare. Last one was during the Great Depression.

(OK, let all the permabears now try to convince everyone that we're in Round 2 of the Great Depression...)

Oh, and Japan is/was a totally different animal--definitely an apples and oranges comparison.

I'm have a bit of an austrian view on monetary economics... So I like using the gold standard when looking at long term charts [take out the fiat money factor]

If you look at the 20th century S&P vs Gold. You see that the S&P does several big spikes that go up and come back down. To an equilibrium level.
The exponential curve you see in the usual S&P or DOW chart for a long time period, is mostly tue to the exponential expansion in fiat money supply. As money loses value, companies look more expensive.

I think that fiat money was a bad idea all along. No one should have the right to print money as they please, that can only lead to trouble.
Bernanke can only lower rates so far, he can only go so far lowering rates, what's he going to do, pay 2% anual to people who take loans?
The rate cuts have been getting less and less efective at reactivating the bull market. If they keep pushing in the same direction, inflation might get out of hand... You might be looking at a scenario similar to the 70's with a zimbawe twist and a little bit of argentina.

Quiet a nasty pill to shallow; not the kind of legacy you'll expect of such a fine stateman as George Bush Jr... so he'll probably figure something out. [please note sarcasm.]

 

[HolyGrail]

I talk with many of my customers on a daily basis. There is not even one of them that is considering laying off anyone. In fact, it is just the opposite. They want to hire more people but cannot find them. That sure doesn't sound like a recession to me.