Imminent and severe market correction

[TheAbyss]

If you required confirmation that the Americans have thrown logic out the window and are becominging increasingly desperate and grasping at straws no matter how thin, look no further than Fridays late rallly.

If they can move a market up by some 6% based on a rumour that an individual from the private sector is coming to the white house to take over from Paulson then they are clueless and looking for any ray of hope imo.

This will be a short lived rally for sure and certain.

 

[sammy84]

If you required confirmation that the Americans have thrown logic out the window and are becominging increasingly desperate and grasping at straws no matter how thin, look no further than Fridays late rallly.

If they can move a market up by some 6% based on a rumour that an individual from the private sector is coming to the white house to take over from Paulson then they are clueless and looking for any ray of hope imo.

This will be a short lived rally for sure and certain.

Private industry?! Geithner is from the New York Fed, before that the IMF, and has had an integral role in the bail out plan to date. From what I hear from my friends in the US, Geithner is one of the most respected men in the financial sector. Regardless, if you speak to technical analysist they say we were due for a bounce anyway.

 

[explod]

Private industry?! Geithner is from the New York Fed, before that the IMF, and has had an integral role in the bail out plan to date. From what I hear from my friends in the US, Geithner is one of the most respected men in the financial sector. Regardless, if you speak to technical analysist they say we were due for a bounce anyway.

Agree absolutely; at 3pm US time trading, the Dow was at 7,500, in the last hour it rallied 546 points to the close of 8,046. Not only on this, but many other indexes, the US close stratiegic sales for maximum sheeple consumtion over the weekend. I bet a lot of fed money went into that last hour. They failed this time on the HUI and the gold price, maybe that will be the crack in the ice.

This week will indeed be interesting, reminds me of listening to the Lone Ranger on the radio as a child; could not wait for the next episode. 5.45pm on 3YB Warrnambool.

 

[TheAbyss]

No matter who the guru is or where he hails from there is no silver bullet and sentiment is low.

A rally is due and will come on the back of almost any news but the white knight can only lay the basis for the future not the present which was written in the past excesses.

 

[barrett]

On the daily chart of the Dow, Friday was a reversal that also completed a bullish engulfment on very high volume which is about the most bullish candlestick sign that there is. So I expect a massive rally through Christmas. Why? Lots of monkeys tapping on keyboards. That's about the most useful fundamental explanation that there is in this market.

 

[noirua]

The UK FTSE 100 rose 9.84% (Mainly big cap and financials in rally) and Dow currently up 4%. Big rebound on the ASX later this morning, no severe correction today.
Massive Budget boost in UK. Australia needs, and should get one soon.
Citigroup gets $20 billion bailout.

 

[The Edge]

Monday 24 November 2008

> If you required confirmation that the Americans
> have thrown logic out the window and are
> becoming increasingly desperate and grasping at
> straws no matter how thin, look no further than
> Fridays late rallly.

To throw anything out the window requires one
having it in the first place. It is questionable to
accuse Americans, collectively, as being grounded
in logic.

> If they can move a market up by some 6% based
> on a rumour that an individual from the private sector
> is coming to the white house to take over from
> Paulson then they are clueless and looking for any
> ray of hope imo.

The impact was a knee-jerk reaction to a desperate
situation where the public is looking for anything to
fill the vacuum left by Bush. It is not so much a
grasping at straws as it is recognition that at least
some positive steps are being taken, and these steps
were viewed favorably by the market.

Most of the world is clueless over this unparalled,
historic series of events, as the global economy
unravels before everyone's helpless eyes. And
sadly, yes, any ray of hope will make a difference,
because it is a start.

> This will be a short lived rally for sure and certain.

Have to disagree with you on that one. The vertical
nature of this decline, along with the heavy volume
on Friday, makes this activity climatic, and it sets the
stage for a rebound, within a bear market.

What rally may ensue, and I could be dead wrong,
is not likely to be short-lived, and by that is meant
measured in days, or even a few weeks.

The only thing ever certain in any market is that it
will change, but the how is never certain.

 

[wayneL]

Monday 24 November 2008

> If you required confirmation that the Americans
> have thrown logic out the window and....

Who are you quoting here Edgy?

 

[Sean K]

Who are you quoting here Edgy?

Is he talking to himself?

 

[explod]

The recent US bailout of 900 billion now looking pretty insignificant. Todays Business Age details a new US pledge to lend more than $US7.4 trillion on behalf of the American taxpayer to rescue the financial system. That is according to the article $US24,000 from every man, woman and child.

And in the UK they are going to increase spending and reduce taxes. Does that mean Brown has an election coming up? he he eh ::

Lets all just go down to the casino, I will show you a nice little system for the roulette.

 

[Aussiejeff]

The recent US bailout of 900 billion now looking pretty insignificant. Todays Business Age details a new US pledge to lend more than $US7.4 trillion on behalf of the American taxpayer to rescue the financial system. That is according to the article $US24,000 from every man, woman and child.

And in the UK they are going to increase spending and reduce taxes. Does that mean Brown has an election coming up? he he eh ::

Lets all just go down to the casino, I will show you a nice little system for the roulette.

HOORAY!!!

The Regulators Of The Free Markets have attached a HUGE INFLATIONARY bottle to the next MASSIVE speculative bubble!

WHOOP-EEE! All punters get ready for TAKEOFF - this is gonna be a moonshot this time!! Our buddies in the World Guv-Mint$ are gonna back Big Bus$ne$$ to the hilt - the taxpayers hilt that is - HAW, HAW!!!

PS: All you "long term" investors and econo-freaks can go jump. C'mon punters, let's have a big party while the bubbly rises!!! YOW-ZAAAA!

 

[The Edge]

Monday 24 November 2008 [on CST]

Quoting from The Abyss, above, #3782.


Cheers!

 

[CAB SAV]

US buying on hope. Poor data ignored- Sales of existing homes declines more than expexted in Oct. 45% of sales were distressed sales, foreclosures increasing 5% in Oct. 84868 homes lost to foreclosure.
3 mth Libor rate up 2.16 to 2.17% Overnight Libor up 0.7 to 0.8%

 

[mayk]

US buying on hope. Poor data ignored- Sales of existing homes declines more than expexted in Oct. 45% of sales were distressed sales, foreclosures increasing 5% in Oct. 84868 homes lost to foreclosure.
3 mth Libor rate up 2.16 to 2.17% Overnight Libor up 0.7 to 0.8%

Don't let truth get in the way of a good story...

 

[CanOz]

US buying on hope. Poor data ignored-

IMO this is the most important statement here. If you want to trade this rally (if its really a rally) then it all depends on how well and how long the market can ignore the bad news, and there will be plenty.

So its got to ignore the bad and over react to any postive news, thats the key to sentiment in the next few sessions.

Cheers,


CanOz

 

[Bushman]

US buying on hope. Poor data ignored- Sales of existing homes declines more than expexted in Oct. 45% of sales were distressed sales, foreclosures increasing 5% in Oct. 84868 homes lost to foreclosure.
3 mth Libor rate up 2.16 to 2.17% Overnight Libor up 0.7 to 0.8%

It is poor data but it is priced in. You need to look at the balance of housing supply in the states (round about the 11 month mark) and this has been showing signs of stabilising.

The next downward move will be based on recessionary signals (business confidence, unemployment, factory orders, inventory t/o and the like) or the price of oil stabilising and then rising (inflationary). My 2c.

US housing has bottomed. It would have to be CMBS or something like that deteriorating that adds to the 'credit crises' from here.

 

[sassa]

In response to the question of the day -- do I think we're consolidating right now, the answer is no. The four market sectors that account for the largest percentage of the market all have incredibly bearish charts right now. That concerns me greatly.

http://www.bonddad.blogspot.com/

 

[CAB SAV]

Will be interesting to see US reaction tonight. Out comes GDP Sept Q, Personal Consumption Sept Q, Core PCE Sept Q, Cons Cons Confidence Nov, plus more Wed.

 

[basilio]

What if the stock markets were closed down?

Just thinking out of the square here. We are in totally uncharted territory at the moment. To spell it we have

1) Huge collapses in the US banking systems with knock on implications around the world. There is much unraveling to come
2) Imminent collapse of American car manufactures with the predictable consequences on employment, debt and effects on national income
3) American debt levels going into the stratosphere. They are already way overstretched. How will any markets handle the extra trillions of dollars of treasury notes? Who can and will buy them?
4) Social security responsibilities that were always going to a struggle but will now take on far greater dimensions.

I'll leave out issues 5 -100...

My point is that when we add up the figures it all looks ugly. We have accepted corporate deceit and used self deception as a mechanism to keep all the balls in the air up until now. But I do fear that the current world wide debt liabilities probably outweigh nominal assets.

So perhaps there could be situation when reality comes through and stock markets are simply too sick to be allowed or able to trade. Historically the pricking of the South Seas bubble in England 1720, and the simultaneous implosion of the Mississippi Bubble in France in the same year collapsed the economies of these countries.

There is a more constructive view of what we need to do. It's worth checking out the full text of this story and the Energy Bulletin website that brings these ideas together.

Kunstler: Zombie Economics
James Howard Kunstler, blog
All the activities based on getting something-for-nothing are dead or dying now, in particular buying houses and cars on credit and so it should not be a surprise that the two major victims are the housing and car industries. Notice, by the way, that these are the two major ingredients of an economy based on building suburban sprawl. That's over, too. We're done building it and the stuff we've already built is destined to loose both money value and usefulness as the wrenching transition goes forward.

All this obviously begs the question: what kind of economy are we going to live in if the old one is toast? Well, it's also pretty obvious that it will have to be based on activities productively aimed at keeping human beings alive in an ecology that has a future. Once you grasp this, you will see that there is no reason to despair and more than enough for all of us to do, so we can recover from the zombie nation disease and get on with the next chapter of American history -- and I sure hope that Mr. Obama will get with the new program.

To be specific about this new economy, we're going to have to make things again, and raise things out of the earth, locally, and trade these things for money of some kind that we earn through our own productive activities. Don't make the mistake of thinking this is optional. The only other option is to go through a violent sociopolitical convulsion. We ought to know from prior examples in world history that this is not a desirable experience. So, to avoid that, we really have to put our shoulders to the wheel and get to work on things that matter, and do it at a scale that is consistent with what the world really has to offer right now, especially in terms of available energy.
(24 November 2008)

http://www.energybulletin.net/node/47322

 

[Bushman]

http://www.energybulletin.net/node/47322

Harder to do though under the current capitalist system that sees the US dollar as the sole global currency? We need currency diversification and competition! Who though - Euro most likely I guess even though it carries Spain, Italy and Greece on its shoulders.

Otherwise status quo will resume and the rest of the world will continue to dig up resources and manufacture trinkets to feed to the bloated body of the US consumer.