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What more bad news could come out?
- Thread starter Cutten
- Start date
Quote from GermanTrader:
Major earthquake in the West, crippling LA, Frisco, Portland and Seattle. NOT already priced in.
a few weeks ago, my gf predicted that on nov. 12th, the big one (to end all big ones) would hit cali. half of the state will be under water, untold millions will perish.
unfortunately, both corey feldman AND corey haim will survive. that was the horrifying part.
Quote from jackangel:
a few weeks ago, my gf predicted that on nov. 12th, the big one (to end all big ones) would hit cali. half of the state will be under water, untold millions will perish.
unfortunately, both corey feldman AND corey haim will survive. that was the horrifying part.
Send tickets to them FedEx overnight... Nov 12th in the penthouse of the Frisco Hyatt!
An absence of government interference and bailouts could be bearish for the stockmarket. The ban on shorting and the $700 billion bailout were not the only announcements made over the last week.
There was also a money market insurance fund announcement. There might have also been other announcements, but to be honest there were so many bailout announcements on Thursday and Friday that I just lost count of them all.
Following on from the above, congress could vote against the $700b bailout, or they could substantially modify it.
Housing prices could fall much further, which would be bearish for financials and homebuilders.
The big three auto companies could fail.
Peak oil could further reduce consumer spending.
Peak oil could result in additional airline bankruptcies.
And generally the recession could get much worse, resulting in a steeper drop in consumer spending.
There was also a money market insurance fund announcement. There might have also been other announcements, but to be honest there were so many bailout announcements on Thursday and Friday that I just lost count of them all.
Following on from the above, congress could vote against the $700b bailout, or they could substantially modify it.
Housing prices could fall much further, which would be bearish for financials and homebuilders.
The big three auto companies could fail.
Peak oil could further reduce consumer spending.
Peak oil could result in additional airline bankruptcies.
And generally the recession could get much worse, resulting in a steeper drop in consumer spending.
Quote from Cutten:
I'm not exactly a bull on stocks. I'm pretty bearish on the economy. But I have to ask - is there much more bearish news that can come out? AIG is down, 3/5ths of Wall Street is down, every man and his dog knows real estate is in a depression.
What new news can come out in the next 2-3 months to make things worse? I'm actually struggling to think of it. Some possibilities:
1) US AAA rating goes on review. That'll hit bonds for a while, but stocks for 1-2 days. After that it won't mean shit to equity valuations
2) Some banks go bust. Already priced in.
3) Retail & consumer sector stocks get hammered due to spending slowdown. Partly but not fully priced in. But this is, what, 20% of the S&P? Who gives a fuck.
4) US recession. Lol, say hello to S&P 1300 if that happens. MORE than priced in.
5) Large Hadron Collider generates quantum black holes which hit a few stray protons, get heavy, sink into the core of the earth, and swallow up the world over a 6 month period, leading to the total destruction of earth and human life. Ok, I admit this would be pretty bearish for stocks.
Seriously, what sectors are left to drop? Retail. Tech. Consumer finance. And...er...that's about it. This is a minority of the market. Every other sector has already been taken out and shot - real estate, check. Banks, check. Non-bank financials, check. Commodity producers, check. High P/E former glamour stocks, check. What's left?
I feel a bit premature calling bottom, but I have to say, I am struggling to come up with solid reasons for significant lower lows. Of course a sentiment-induced crash is always possible. But there's virtually no doubt it would bounce back pretty quick. It's not like we will go to S&P 1000 and *stay there*.
To be honest, the investment case for stocks looks pretty good here. I'd say long-term returns of 10% from current prices are decidedly possible.
Any thoughts?