# "The End" of the US Stock Market Boom



## The Edge (18 January 2009)

Saturday 17 January 2009

An interesting article, if not already posted.

http://www.portfolio.com/news-marke...folio/2008/11/11/The-End-of-Wall-Streets-Boom


----------



## basilio (18 January 2009)

*Re: "The End" of US Stock Market Boom*

That  story is devastating...

Basic message is that Wall Street is just a giant con game game run but the most stupid but greedy people in the world solely for their own gain.

And we, the people and the investors are the sheep who get sheared and slaughtered.

But read it your yourself and make your own judgements.

Unfortunately it makes one question the financial basis of most of our current systems - banks, super funds , investment companies which have substantial exposure to the unreal values generated by this false boom


----------



## Pager (18 January 2009)

*Re: "The End" of US Stock Market Boom*



I think the stockmarkets around the world will struggle for along time and not necessarily because of the current problems.

Many people around the globe have been burnt very badly and will not forget what has happened in a hurry, valuations IMO will be very conservative compared to the last few years, dividend yields however will be higher and once this highly volatile period has passed then volatility may go from 1 extreme to the other which wont be good for many traders particualy those with short term time frames.


----------



## CAB SAV (18 January 2009)

*Re: "The End" of US Stock Market Boom*



Pager said:


> I think the stockmarkets around the world will struggle for along time and not necessarily because of the current problems.
> 
> Many people around the globe have been burnt very badly and will not forget what has happened in a hurry, valuations IMO will be very conservative compared to the last few years, dividend yields however will be higher and once this highly volatile period has passed then volatility may go from 1 extreme to the other which wont be good for many traders particualy those with short term time frames.




Half the problem is too many people have short memories & boom/busts keep repeating. I can't see any benefit by holding long with all the uncertainty, global governments playing the market and all agreeing to spend their way out of this. Until govt,s get out of the market and  we learn to consume less than we produce things will get worse. In a few years time US is going to have to work out how to fund $55 plus trillion for social security/medicare payments. How will the markets react? Who will lend them the money?


----------



## theasxgorilla (18 January 2009)

I thought it was brilliant, thanks.

Can someone confirm if this is real?  I mean, are all the players real?  I haven't had time to research it.


----------



## nomore4s (19 January 2009)

Very good article.

Talk about greed and stupidity.


----------



## theasxgorilla (19 January 2009)

nomore4s said:


> Very good article.
> 
> Talk about greed and stupidity.




And ignorance.  He managed to tie together then entire finance markets time continuum for the last 25 or so years and demonstrate how ignorant everyone has been.


----------



## Sean K (19 January 2009)

Is it the end FOR EVER, or just a part of the overall cycle?


----------



## prawn_86 (19 January 2009)

kennas said:


> Is it the end FOR EVER, or just a part of the overall cycle?




Thats something im also tossing up Kennas. Historically the bad/depressing times have always been a good time to purchase for value investors. Each time people have said "this crash is different" as they are now. So is it actually different this time? ie - will the markets not recover within the next 5 - 10 years


----------



## theasxgorilla (19 January 2009)

prawn_86 said:


> Thats something im also tossing up Kennas. Historically the bad/depressing times have always been a good time to purchase for value investors. Each time people have said "this crash is different" as they are now. So is it actually different this time? ie - will the markets not recover within the next 5 - 10 years




Keep an eye on earnings though.  If they continue to disappoint the bear market will perpetuate.  If you buy now in anticipation of a bull market which starts in 5 years, in the meantime I reckon you'll be holding through a lot more very bad news and all the psychology that goes with that.

Time to look at alternative investments.  Oh wait, that's what got us here.  Which is why no-one is looking there and why the truly smart money probably is.


----------



## theasxgorilla (19 January 2009)

kennas said:


> Is it the end FOR EVER, or just a part of the overall cycle?




It's cyclical in the sense that at some point in the future there will be another bull market.  In the meantime, what is broken needs to be fixed.  

To paraphrase John Mauldin, an entire international credit industry has been vapourised.  And anyone who doesn't comprehend how credit has made their long-only portfolios profitable during the last 25 years simply hasn't done enough homework.

I took this away from that article.  He wrote _Liars Poker_ in '89 after leaving the industry in anticipation that the machine was broken.  It's not difficult to find such opining around this era.  The two Market Wizards books are filled with very bright and successful traders predicting that the _real_ end was nigh.  And then we got the 90s, and then we got the 00s.  

Now, there are a lot of credible reasons to believe that the machine really is broken.  And presumably worse than if the Wall Street Lewis walked away from in the 80s had been dealt with and reformed then rather than two decades later.

Some people are drawing parallels with the 70s, but at the same time a lot of statistics are coming out with claims that they're the worst since the 30s depression.  The surreal part is the way the impact to the real economy is being drawn out.  I'm not noticing it much at all in either Australia, Sweden or Holland.  People just got through Christmas buying more for less.

It seems a lot worse in the UK and the US...through the looking glass of my Internet screen.  But if it's that bad where are the soup kitchens?  Or have western societies standard of living risen far enough to ensure this is unlikely to happen?

My gut tells me we're in bull trap territory.


----------



## Sean K (19 January 2009)

theasxgorilla said:


> My gut tells me we're in bull trap territory.



Yeah, me too. Can't wait for the next 4 horseman to arrive so I can park some cash somewhere. It's just buying rum at the moment, which isn't a solid investment.


----------



## theasxgorilla (19 January 2009)

kennas said:


> Yeah, me too. Can't wait for the next 4 horseman to arrive so I can park some cash somewhere. It's just buying rum at the moment, which isn't a solid investment.




Last time I checked it was extremely liquid though


----------



## basilio (19 January 2009)

Interesting question about whether the market is over "forever".

Michael Lewis rightly thought in 1989 that the market needed fundamental reform or would crash. Since then there has basically been a steady and then escalating increase in debt which seems to have funded the rises in stock markets - particularly America.

The Madoff scam is the best example of this effect where the fund continues to grow while more money is poured in. Trouble is the fund is a bubble.

I suspect the market will mirror Madoff. It is mostly bubble. Real physical product making value is very thin on the ground. How can it be otherwise when the most lucrative game in town is playing with money to make money rather than more industrious activities?

And there are still other issues that have to be dealt with in the real world - dealing with the permanent decline in cheap energy  for one and tackling the destructive effects of climate change around the world. 

Just my opinion.


----------



## cuttlefish (19 January 2009)

theasxgorilla said:


> Last time I checked it was extremely liquid though





Volatile too ...


----------



## Macquack (19 January 2009)

basilio said:


> I suspect the market will mirror Madoff. It is mostly bubble. Real physical product making value is very thin on the ground. How can it be otherwise when the most lucrative game in town is playing with money to make money rather than more industrious activities?




I agree.

Why be a steel manufacturer when you can be a banker, its a lot easier and historically more profitable.

When I look at the USA, all I see is ONE BIG F--KING FUND.

Pension Funds, Superannuation Funds, Equity Funds, Mutual Funds, Hedge Funds, Managed Funds, Indexed Funds, Future Funds, Growth Funds, Value Funds, Foreign Stock Funds, Money Market Funds,Foreign Exchange Funds, Sector Funds, blah, blah, blah.


----------



## GumbyLearner (20 January 2009)

Bernie Made-off Ponzi Rap Jam  



So whatcha whatcha want....


http://blogs.chron.com/nickanderson/archives/2008/12/shape_shifting.html


----------



## GumbyLearner (20 January 2009)

A traders synopsis of 2008. 

http://leavittbrothers.com/stocks-o...k-at-2008-through-my-eyes-by-upsidetrader.cfm

What, you think I'm Larry Kudlow? Mustard seeds my ass. We have issues. The media will have you believe that the bell will toll on December 31 at midnight for the all clear. More of the same from that lot, just more of the same, and it will NEVER change, they have no vested interest in telling you to sell things. Why? Because about 1 % of the public knows how to short and it's not their audience. 

In 2008 we saw the unfortunate failures of banks and investment banks, two of the brokers, Lehman and Bear I spent some great years working for. We discovered that Greenspan was a putz and was more knowledgeable about body tanning with Andrea Mitchell than anything about the economy. What a charlatan. We discovered that although Ben Bernanke was a scholar on the Great Depression he almost single handedly put us in another one. Speaking of body tanning, Angelo Mozilo sent Counrtywide Credit to hell in a hand basket and we discovered the hard way that the credit rating services give new definition to the word incompetent (they are analysts after all). Alan Schwartz at Bear Stearns told us things were swell and that counter party risk wasn't an issue but went belly up days later. Funny, why weren't some of my buddies taking their trades at the time of the interview? It was OK though because Jimmy Cayne was at the helm, he was smoking wacky weed at the time, but he was at the helm. Richard Fuld hid in his ivory tower as Rome burned to the ground, now his art work and Hampton's hacienda could be up for sale. He's not getting saved by zero. The Oracle of Omaha took it in the shorts because even the mighty fall when markets crash. Trust in the market was annihilated this year and nothing has really changed because we will just pass the baton to another twit who will be thrown into the deep end of the pool and will discover baptism by fire. It's just the natural evolution of things. Chairman Cox watched the world implode from his mahogany office, he started a "no short rule" but the market still tanked thousands of points. A couple of months later he signed off on some really sweet triple short ETF's. No, you can't make this **** up. Cramer yelled buy, buy, buy for about 90% of the move down yet the idol worshippers still call in every night just to say Booyah. The media has yelled "bottom" for thousands upon thousands of points and at some point they will be right by accident, but they did none of their viewers any favors. 

But from the ashes some stars were born. Meredith Whitney was the only gal in the room that had the balls to call the financials the drek that they really were and still are. She received death threats and harassing calls from the old boy network that all suckle from the same teet. The same mindless warriors that travel together like neons in a fish tank, all snapping in unison at the same minute piece of food. Pathetic and no value added at all.


----------



## Naked shorts (21 January 2009)

Thanks Gumby, very interesting stuff


----------



## Aussiejeff (21 January 2009)

Yeah. I gather he has a chip on his shoulder.... 



aj


----------



## Aussiejeff (21 January 2009)

Looks like "The Real End" starts today....??


----------



## MrBurns (21 January 2009)

Aussiejeff said:


> Looks like "The Real End" starts today....??




Yeah they're all moaning about the Dow over there, I'm sick of it, clean your act up and perhaps your stocks will be worth something..........one day.


----------



## prawn_86 (21 January 2009)

Just finished reading it then. Great stuff.

My biggest take from it was how management have passed on risk to shareholders, while they happily take their bonuses. It only re-inforces my view that i want to get into upper level management... if capitalism as we know it is still around by then


----------



## Buddy (21 January 2009)

prawn_86 said:


> Just finished reading it then. Great stuff.
> 
> My biggest take from it was how management have passed on risk to shareholders, while they happily take their bonuses. It only re-inforces my view that i want to get into upper level management... if capitalism as we know it is still around by then




Or maybe its payback time. Assassination, sell the children, seize their assets, run over their dog, etc. All that sort of stuff. The reaper will take his toll.


----------



## Uncle Festivus (21 January 2009)

The end of the US & global capitalism as we know it? The illusion of wealth is perpetrated by the increase in unrestrained credit/money. The money is now vaporising because it's based on .....nothing.....it never really existed in the first place, at least that amount over and above what could be created into existance by honest productivity? Simple?

The end (of the downturn) will be when people are employed to build homes according to the ability to pay for them ie to live within their means. The good thing about Australia is that we, supposedly, don't have a suplus of homes to get rid of, unlike the rest of world, so our recovery will be construction lead?


----------



## Naked shorts (22 January 2009)

prawn_86 said:


> Just finished reading it then. Great stuff.
> 
> My biggest take from it was how management have passed on risk to shareholders, while they happily take their bonuses. It only re-inforces my view that i want to get into upper level management... if capitalism as we know it is still around by then




Thing is, you gotta deal with 'Joe average' lower-middle class shareholders who complain about anything/everything.

"Why isnt the price going up?"
"Why did you take a holiday in the Caribbean for 1week? you should have been working" 
"Why do you get a big fat bonus?"

I'm quite happy staying out of shares and making my money through futures and/or foreign exchange. And if I start a company, it will be a partnership.



Uncle Festivus said:


> The end of the US & global capitalism as we know it? The illusion of wealth is perpetrated by the increase in unrestrained credit/money. The money is now vaporising because it's based on .....nothing.....it never really existed in the first place, at least that amount over and above what could be created into existance by honest productivity? Simple?




So true. Dodgy accounting practices is the real cause of all this.


----------



## basilio (22 January 2009)

The really scary part? Real wealth  (IMO) is based on tangible resources. Fertile soils, adequate water, renewable  forests, accessible mineral resources and above all a kind climate.  Being on dry land also helps.

All the evidence to date is saying that we are overusing all the natural resources and causing a climate change phenomenon which will make most of the planet too hot to sustain the societies we currently have. If there is a question about the End of the stock market it needs to relate to the factors of production that go into every element of our producer society.


----------



## Buddy (23 January 2009)

Buddy said:


> Or maybe its payback time. Assassination, sell the children, seize their assets, run over their dog, etc. All that sort of stuff. The reaper will take his toll.




"*Merrill Lynch paid billions in bonuses before bailout *
Merrill Lynch, the loss-making Wall Street bank, paid its staff billions of dollars in bonuses even as it prepared to be taken over by the US government-backed Bank of America. ........"

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4316475/Merrill-Lynch-paid-billions-in-bonuses-before-bailout.html

OK, so John Thain has just elected himself to the top of the list.


----------

