Imminent and severe market correction

[sassa]

Wall Street et al must be allowed to weather the consequences of its binge.

The majority of articles in journals,the discussions on audio/visual at Bloomberg and Market Watch,the intervention of the Fed and the direction of the markets all point to no imminent or severe market correction at all.
Contributors are pointing to the resetting of mortgages in the sub prime next month as the telling time and the impending recession.
Analysts are not divided equally on a recession but lean heavily to no recession at all.The President said the government will step in and help people reset their mortgages to prevent them losing their homes.The Fed will cut rates(some say 125 basis points)to help with credit-this,of course,won't help the banks with the debt problems they have on their books(I think?).
It would seem there is no financial risk in the markets now and investors are certainly backing that up with the indices climbing when they really should be.......
So where is this credit crisis?

 

[explod]

The majority of articles in journals,the discussions on audio/visual at Bloomberg and Market Watch,the intervention of the Fed and the direction of the markets all point to no imminent or severe market correction at all.
Contributors are pointing to the resetting of mortgages in the sub prime next month as the telling time and the impending recession.
Analysts are not divided equally on a recession but lean heavily to no recession at all.The President said the government will step in and help people reset their mortgages to prevent them losing their homes.The Fed will cut rates(some say 125 basis points)to help with credit-this,of course,won't help the banks with the debt problems they have on their books(I think?).
It would seem there is no financial risk in the markets now and investors are certainly backing that up with the indices climbing when they really should be.......
So where is this credit crisis?

I learnt the hard way not to take any notice of Wall Street and in particular Bloomberg and Market Watch.

This is the punch line yet few heed it. 'I never invest in anything that I do not understand" Warren Buffet, wealthiest investor in the world.

Analystic journalists are paid to maintain the status quo. At the moment that is to try and hold up Wall Street while the smart money and the Fed can reajust themselves. Unless it can break strong resistance at 13500 the Dow is still in a down trend

 

[Sean K]

The majority of articles in journals,the discussions on audio/visual at Bloomberg and Market Watch,the intervention of the Fed and the direction of the markets all point to no imminent or severe market correction at all.

Contributors are pointing to the resetting of mortgages in the sub prime next month as the telling time and the impending recession.

Analysts are not divided equally on a recession but lean heavily to no recession at all.......

So where is this credit crisis?

sassa, it might just depend on which articles you read. I'm trying to keep an open mind but I'm always swayed by the bullish articles more because I'm that kind of guy! An ostrich

Seriously, I'm not positive you can validate the future of the market on a few newspaper articles. All have an agenda. Perhaps the news writers have a vested interested in getting it right, or is it to sell newpapers? Maybe that ends up hand in glove.

Can you give some references to the analysts summary etc?

 

[DTM]

The majority of articles in journals,the discussions on audio/visual at Bloomberg and Market Watch,the intervention of the Fed and the direction of the markets all point to no imminent or severe market correction at all.
Contributors are pointing to the resetting of mortgages in the sub prime next month as the telling time and the impending recession.
Analysts are not divided equally on a recession but lean heavily to no recession at all.The President said the government will step in and help people reset their mortgages to prevent them losing their homes.The Fed will cut rates(some say 125 basis points)to help with credit-this,of course,won't help the banks with the debt problems they have on their books(I think?).
It would seem there is no financial risk in the markets now and investors are certainly backing that up with the indices climbing when they really should be.......
So where is this credit crisis?

Please correct me if I'm wrong but didn't the US Government also say to people not to fix their interest rates when it was 0 or 1% a little while ago??

They even wheeled out GDubbya to tell people not to fix, and that variable was better than fixed?

Go figure

 

[sassa]

Can you give some references to the analysts summary etc?

javascript:vlaunch('http://www.marketwatch.com/tvradio/player.asp?guid={5AE0C5E8-0FEA-4DA2-86F5-68D6BD2426AB}')

 

[Sean K]

javascript:vlaunch('http://www.marketwatch.com/tvradio/player.asp?guid={5AE0C5E8-0FEA-4DA2-86F5-68D6BD2426AB}')

sassa, what part of that link do I use? Thanks.

 

[surfingman]

http://www.marketwatch.com/tvradio/player.asp?guid={5AE0C5E8-0FEA-4DA2-86F5-68D6BD2426AB}

use the part inside ' '

 

[Uncle Festivus]

The majority of articles in journals,the discussions on audio/visual at Bloomberg and Market Watch,the intervention of the Fed and the direction of the markets all point to no imminent or severe market correction at all.

So where is this credit crisis?

The commentator in the Marketwatch piece alludes to a phenomenon called stagflation, without actually saying it as it might scare people. I vaguely recall a bit of market turmoil some weeks ago which constituted a correction? There was some animated requests pleading for the US Fed to come to the rescue with an interest rate cut as well. So a new week and all is back to normal.

As far as I can tell nothing has improved over the last few weeks other than stocks regaining the losses to be nearly back to where they were before the correction. I remember nearly all analysts trying to explain what was going on, but the best one was that the market was a tad overheated & needed a healthy retracement. So now that we are back in overheated territory are we again overbought?

The imbalances in the US are now structural and will detract further from GDP in the coming qtrs, so the show has just had it's full dress rehearsal for the main event to come. More 'mark to market' asset write downs.

The new mantra is 'The return of capital rather than return on capital'.

Classic bull trap.

http://www.marketwatch.com/news/story/take-more-just-rate-cuts/story.aspx?guid=%7BDF4666CE%2D2FFB%2D423A%2D9751%2DC5E083C525B2%7D

 

[Sean K]

http://www.marketwatch.com/tvradio/player.asp?guid={5AE0C5E8-0FEA-4DA2-86F5-68D6BD2426AB}

use the part inside ' '

That wasn't really a well rounded summary to me.

Maybe if Marc Faber had have given his opinion as well there might have been some balance.

 

[sassa]

That wasn't really a well rounded summary to me.

Hi Kennas,
Could you direct me to an article that explains the behaviour of the markets now when I think that they should be falling or marking time?Do you have any thoughts on the spread of the Dow indices?

 

[Sean K]

Hi Kennas,
Could you direct me to an article that explains the behaviour of the markets now when I think that they should be falling or marking time? Do you have any thoughts on the spread of the Dow indices?

Not at the moment, will get back to you. I'm not the one to ask about US indices though, I'd just be quoting someone else.

There's a few threads discussing the direction of the market though. Some TA, some FA, and there's lots of confliction in and amongst.....

 

[Uncle Festivus]

Hi Kennas,
Could you direct me to an article that explains the behaviour of the markets now when I think that they should be falling or marking time?Do you have any thoughts on the spread of the Dow indices?

sassa,
Another viewpoint to confuse us?

In the midst of all this, many investors are baffled that equity markets have not been more seriously damaged. Part of the explanation, which may be a more hopeful pointer for the global economy, is that confidence in the corporate sector has taken much less of a knock than in finance. With relatively unstretched balance sheets, business people across the world have responded to falling share prices by initiating share buy-backs.
Boardroom insiders’ purchases of shares have also been outweighing sales by a big margin.
Whether the optimism holds up in the face of a slowing economy remains to be seen.
The large chunk of corporate profits attributable to finance in the US and UK is also a bear pointer. While central banks have so far succeeded in keeping the financial show on the road, the problems of the housing market and the flakiness of the accountancy for complex financial instruments means that there is a drip feed of bad news yet to come.

http://www.rgemonitor.com/blog/roubini/212919/

 

[dhukka]

The majority of articles in journals,the discussions on audio/visual at Bloomberg and Market Watch,the intervention of the Fed and the direction of the markets all point to no imminent or severe market correction at all.
Contributors are pointing to the resetting of mortgages in the sub prime next month as the telling time and the impending recession.
Analysts are not divided equally on a recession but lean heavily to no recession at all.

Here's a question for you sassa, how many mainstream analysts/economists predicted the last US recession? If you can come up with one you'd be doing well. Economists are great contrarian indicators.

The President said the government will step in and help people reset their mortgages to prevent them losing their homes.

A gross over-generalization, the measures proposed by congress would help around 80,000 households, there are 2 million ARM resets to come over the next 12 months.

The Fed will cut rates(some say 125 basis points)to help with credit-this,of course,won't help the banks with the debt problems they have on their books(I think?).

No it won't and it won't bring back the sub-prime market , all the mortgage originators that have gone bust or the secondary market for non-prime RMBS.

It would seem there is no financial risk in the markets now

Is that so? you should inform the rest of the financial community that are unwilling to borrow or lend to each other, I'm sure they'll be relieved to know.


Um lets' see, how about the fact that every other day a mortgage originator goes bust or a hedge fund announces they have serious trouble. How about the now non-existent LBO market? How about the shrinking ABCP market? How about the difficulty in obtaining a mortgage? How about widening credit spreads, falling housing prices and sales, falling residential investment, massive losses and write-downs from builders, building sentiment at 16 year lows, falling corporate earnings for financial companies.

Yeah I don't know what they are on about with this credit crisis stuff

 

[sassa]

sassa,
Another viewpoint to confuse us?

http://www.rgemonitor.com/blog/roubini/212919/

Thank you,a very interesting read with some thoughtful comments such as-
"The central banks have reacted sensibly to the implosion in the money markets with their repeated injections of anti-coagulant. But at the root of it all is the correction of a credit bubble."
And how does a credit bubble correct?Does it break and send other kinds of unwanteds into the financial sector or does the huge amounts of investment cash available from other rich economies(e.g.China)smooth it out?

 

[sassa]

Not at the moment, will get back to you.

Found this article.
http://money.cnn.com/magazines/fortune/fortune_archive/2007/09/17/100250262/index.htm

 

[bean]

Looks like after todays action China may join the party with everyone in the coming days.

 

[numbercruncher]

Looks like after todays action China may join the party with everyone in the coming days.

What action happened today ?

 

[YOUNG_TRADER]

I'm not sure, but Beans comments maybe in reference to Chinese Inflation at 10 yr highs

http://www.marketwatch.com/news/sto...7C-425C-9BD5-69D5723ABB58}&dist=TQP_Mod_mktwN

 

[bean]

I'm not sure, but Beans comments maybe in reference to Chinese Inflation at 10 yr highs

http://www.marketwatch.com/news/sto...7C-425C-9BD5-69D5723ABB58}&dist=TQP_Mod_mktwN

Yes and the Markets dropping. So was that their top???

 

[>Apocalypto<]

Bean their sharemarket and economy do not have anything to really do with each other its not a gage of health like ours is.

now looking at their chart, SSE 180 INDEX looks like they are starting another correction nothing to really worry about yet.

but we all know how avalanches start!

the main thing that interests me on this selling is it reminds me of the expanding pattern the dow made a while back before it banded to set up fall if i remember correctly but I am not saying that that will happen here.

good trading