The Next Bear Phase

[skc]

You could be right but I hope you aren't.

Thing is that if it all goes pear shaped again and some quite respected analysts are predicting just this then there will not be any capacity for bailouts.

Pump priming the economies wont be an option and that means things could get very nasty indeed.

I like this passage from an ex-hedge fund manager.

Where are you going to buy proection on US government's credit? I mean, if the US defaults, what bank is going to be able to make good on that contract? Who are you going to buy that contract from, the Martians?

The book is called "Diary of a very bad year - Confessions of an anonymous hedge fund manager". By Harper Perennial. A very entertaining and informative read.

 

[Glen48]

Think most yanks now realise QE1 didn't work so they tried QE2 and it didn't work and most assume QE 3+ will be the same and OZ home owners will see house prices tank and quickly sell so they don't get caught like USA or so they think.
Buy bullets and beans

 

[Synergy]

XAO 4,666.60 -16.60

Looks like we've entered the devil bear phase...

 

[cynic]

You could be right but I hope you aren't.

Yes - this is one of those rare occasions when I'd rather be wrong.

Unfortunately, I have it on good authority that events of this magnitude will inevitably occur.

 

[Intrinsic Value]

Yes - this is one of those rare occasions when I'd rather be wrong.

Unfortunately, I have it on good authority that events of this magnitude will inevitably occur.

There are quite a few respected analysts who agree with you.

I am holding 60 percent cash at the moment after liquidating a few weeks back.

Even if things do go bad I can afford to hold on to the good stocks I have and then take adavantage of any bargains.

 

[wayneL]

Yes - this is one of those rare occasions when I'd rather be wrong.

Unfortunately, I have it on good authority that events of this magnitude will inevitably occur.

I agree, but after calling the last one way too early and underestimating the propensity for gu'mints to prop things up, I refuse to call a time frame.

However I am as certain as my @rse points to the ground that there is a particular deep pool of doo-doo somewhere on the road ahead and we will drive staright into it.

 

[Uncle Festivus]

There are quite a few respected analysts who agree with you.

I am holding 60 percent cash at the moment after liquidating a few weeks back.

Even if things do go bad I can afford to hold on to the good stocks I have and then take adavantage of any bargains.

What's the point of holding 'good' stocks when the market may well be suspended when crunch time comes? Banks & resources will be the hardest hit.

This (point of view) is interesting in that for even those who do have a balanced view of all things financial etc that what is coming is just another opportunity to BTFD, as we have been accustomed to do because we now know The Fed or their equivalent will magically hold it all together?

But if you have a real good think about it there is no room for a severe & protracted equity or economic downturn ie the next bear phase is not 'priced' in because to actually go there is the end game? There is no 'ammo' left to buy their way out of a new bear. There is even more debt now than before the GFC started. There is no self sustaining 'recovery'.

Unfortunately for us we have the last vestige of prosperity firmly aligned to a quasi capitalist/communist experiment called China, and when world trade collapses again (BDI??), highly indebted Australia will have to start counting the chooks coming home to roost.

Cash in bank won't be the same as cash in hand, and there will be no guarantee that markets will even be open for trade? Not possible? Back in 2007 was the GFC plausible? While the very same people who said all was contained and US housing was a minor aberration are still in charge ie Bernake & the banking cartel (with Goldman Sachs squid tenticles?), - how are they explaining away the recent weakness in various data?

Mean reversion for humanity?

 

[KurwaJegoMac]

Market breadth compared to historical breadth during previous lows. The reaction of stocks to bad news, has declined. I get the feeling that the market has a high concentration of sturdy holders as opposed to weak hands.

+1. Firmly agree. We've had a lot of bad news in recent months and no where near the same reactions received a year ago to similar news. Given all the bad news hanging around atm, you've got to wonder why we're still holding up as well as we are...

 

[wayneL]

+1. Firmly agree. We've had a lot of bad news in recent months and no where near the same reactions received a year ago to similar news. Given all the bad news hanging around atm, you've got to wonder why we're still holding up as well as we are...

What do you think would make these folks sell?

 

[KurwaJegoMac]

What do you think would make these folks sell?

Nothing at all. Things look peachy all around the world :

 

[IFocus]

I agree, but after calling the last one way too early and underestimating the propensity for gu'mints to prop things up, I refuse to call a time frame.

However I am as certain as my @rse points to the ground that there is a particular deep pool of doo-doo somewhere on the road ahead and we will drive staright into it.

I just hope the doo-doo doesn't some how become a serious war.

 

[Intrinsic Value]

What's the point of holding 'good' stocks when the market may well be suspended when crunch time comes? Banks & resources will be the hardest hit.

This (point of view) is interesting in that for even those who do have a balanced view of all things financial etc that what is coming is just another opportunity to BTFD, as we have been accustomed to do because we now know The Fed or their equivalent will magically hold it all together?

But if you have a real good think about it there is no room for a severe & protracted equity or economic downturn ie the next bear phase is not 'priced' in because to actually go there is the end game? There is no 'ammo' left to buy their way out of a new bear. There is even more debt now than before the GFC started. There is no self sustaining 'recovery'.

Unfortunately for us we have the last vestige of prosperity firmly aligned to a quasi capitalist/communist experiment called China, and when world trade collapses again (BDI??), highly indebted Australia will have to start counting the chooks coming home to roost.

Cash in bank won't be the same as cash in hand, and there will be no guarantee that markets will even be open for trade? Not possible? Back in 2007 was the GFC plausible? While the very same people who said all was contained and US housing was a minor aberration are still in charge ie Bernake & the banking cartel (with Goldman Sachs squid tenticles?), - how are they explaining away the recent weakness in various data?

Mean reversion for humanity?

If it gets that bad then nothing will save us.

Maybe living on a farm where you grow you own vegetables and have chooks and cattle etc is the only real hedge against a complete meltdown of all the financial systems.

You have mentioned Australia being leveraged to China but India is also a sleeping giant and one that could mean even greater prosperity for Australia in the long term.

I am still bullish long term but in the short to medium term there could well be a GFC2 that could cause even greater hardship than the previous GFC1.

I don't think it is going to be the end game as you put it but the hard medicine has not yet been taken and the inevitable pain will need to be delivered sooner or later.

 

[LifeChoices]

Let's face it no one really knows if we are going belly up or not. My personal feeling is there is a good chance that it may happen in my lifetime. Most of my time on earth has been pretty peachy, and I'm at a stage of life where I'm feeling pretty bearish.

What I'm interested in is: when some of you say the world is going to end, things will never be the same again, etc - and you put your views on a public forum and tell other people what you think - does it make you feel better when you do that?

Are you bearish guys:

1. just spruking to help the rest of us plebs deal with the future or
2. hoping we all fail and drown, so you can stand above us and say "I told you so" or
3. just pessimistic people

 

[Wysiwyg]

I don't think it is going to be the end game as you put it but the hard medicine has not yet been taken and the inevitable pain will need to be delivered sooner or later.

You posted some sense and I am wondering what type of pain you believe will be delivered? For example house price crash or manufacturing severely affected or diminished resource demand and the resultant unemployment rise?

 

[cynic]

What I'm interested in is: when some of you say the world is going to end, things will never be the same again, etc - and you put your views on a public forum and tell other people what you think - does it make you feel better when you do that?

Are you bearish guys:

1. just spruking to help the rest of us plebs deal with the future or
2. hoping we all fail and drown, so you can stand above us and say "I told you so" or
3. just pessimistic people

All of the above!

 

[Aussiejeff]

Nothing at all. Things look peachy all around the world :

Yup.

DOW UP 25% in last 12 months to-date. This during a time when manufacturing & employment have barely improved.

Seems dem speccies must know somefink da rest of us don't!

Either that, or their speccy dream is about to turn into a nightmare...

Oh well, best not be negative.

Party on....

 

[Tysonboss1]

Can't have a bear thread without a contribution from Marc Faber.

Or a comment from Buffett,

 

[wayneL]

Interesting comments from the Oracle. But we must acknowledge that Warren is not known for prescience, just recognizing value when it appears. Also as he is quite elderly now, his outlook may be jaundiced by his own limited time-frame.

Doesn't mean he's wrong, just some thoughts.

 

[trainspotter]

Invstopedia states "Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in."

Which seems pretty damn obvious to me.

 

[Tysonboss1]

Also as he is quite elderly now, his outlook may be jaundiced by his own limited time-frame.

Age can be a strength in investing and economics due to the fact the both knowledge and experiance is cumulative. One of Warrens key strengths is the knowledge base that he has built up over the decades, Combined with the fact that he doesn't pretend to know the unknowable.