Where are all the bears now?

[skc]

I must admit I am a bear but I am back in the market. The writing is on the wall and the status quo is being protected. While I don't think it will end well, I have to back my ability to manage the risk.

Like Zerohedge's tagline: On a long enough timeline the survival rate of everything drops to zero.

I also believe I will die one day... but it doesn't mean I shouldn't have a go at living (if the analogy makes any sense).

BTW, when the last bear turns into a bull, that's a sell signal...

You seem to be confusing America with the world, the world is a big place...a place where lots of growth is happening...2011 data below but still very relevant..Philippines GDP growth is over 7% this year.

http://www.delawareinvestments.com/...ile/equity-capabilities/emerging-markets.html
~

Probably shouldn't form a view of world growth by the size of geographical area. All the greens on Africa probably has less absolute $ growth than half a province in China.

 

[oneagainstthem]

I remember it wasn't too long ago that there was all this talk about Greece leaving the Eurozone, Spanish banks defaulting, the US debt ceiling getting higher and higher, and more and more job cuts were happening in Australia.

All those things haven't changed much since they first arose, yet over the last six months the XAO has kept rising and rising, see chart:

View attachment 49994

Does anyone have an explanation for this?

Also, back then, around April/May 2012, there were a lot of bears talking down the market, talking gloom and doom, but those voices seem to have disappeared somewhat. I'd prefer to enter the market at around 4000-4200, but does anyone think the market currently is undervalued?

I am still a bear because I believe those global issues remain a serious concern, but seems that the market doesn't care. So am I the only bear at the table?

View attachment 49995

the trouble with being a bear in this market is that the politicians around the world are more interested in keeping the markets high to hide the fact that most of the world is skint,and they have screwed up on a massive scale, and so they keep throwing more, very cheap money at the banks who then invest it in the markets to keep themselves in a well paid jobs, which keeps the markets high and most of the people fooled,and therefore politicians look like they are doing something right, but this insanity can't last for ever and sooner or later the bills have to be paid, regardless of accounting tricks, because unlike Greece, everybody can't write off most of their debts and jump straight back into debt again,the US have only just moved the edge of the cliff,again,and they will never fall over the edge if they keep doing this, but sooner or later they will have to face the fall, and the bears will come back with a vengeance, only to be stopped with the banning of short selling. Who said the markets are not manipulated !!

 

[Uncle Festivus]

There is no explanation, there is nothing going on out there to support such moves, and as said above it's largely the banking sector lifting it up.

The US Fed is 'printing' $100BILLION a month that gets distributed around the globe eventually - it's gotta go somewhere even if it is into junk that has poor fundamentals. Until there is a loss of confidence in the global default currency? The irony is that if the US does get a recovery, when rates start to rise, they will be wiped out! There is no QE exit strategy.

Breaking - Fed may now end QE at end of 1013???

Stocks swiftly dropped on the release of the minutes, and the dollar DXY +0.68% gained, signaling market participants pricing in tighter conditions than they had previously expected.

Almost all Fed members thought that the $40 billion per-month program to buy mortgage debt started in September was working, but there was also uncertainty about whether the benefits would last and that the potential costs could rise as the size of the Fed’s balance sheet increased.

 

[Garpal Gumnut]

I'm bearish. It will be short and sharp and nasty, and hopefully no silly politicians will try to "rescue".

The whole system needs a good sell off, to clean it out. Bankruptcies, arbs jumping off computers backwards on to their smartphones.

US, Japs, Euro, Brazil, Argentina, Russia, all need a good correction.

Chinese too if they were a market economy.

gg

 

[Vixs]

The US Fed is 'printing' $100BILLION a month that gets distributed around the globe eventually - it's gotta go somewhere even if it is into junk that has poor fundamentals. Until there is a loss of confidence in the global default currency? The irony is that if the US does get a recovery, when rates start to rise, they will be wiped out! There is no QE exit strategy.

Breaking - Fed may now end QE at end of 1013???

The exit strategy can only be to maintain the level of debt (or increase it) and keep meeting interest payments as they get cheaper with inflation and time. Should the time come when bills actually need to be repaid, the US will actually have to face some austerity measures themselves. That time hasn't arrived yet.

We know the phrase is that you don't need to be able to repay your debt, only service it. They're only acting on it for political point scoring - I doubt the Republicans give a crap or are that opposed to further debt - they just want to take potshots at the Democrats with the political football of the moment...government debt.

It makes me uneasy thinking about the hyperinflation that has to come.

 

[young-gun]

The US Fed is 'printing' $100BILLION a month that gets distributed around the globe eventually - it's gotta go somewhere even if it is into junk that has poor fundamentals. Until there is a loss of confidence in the global default currency? The irony is that if the US does get a recovery, when rates start to rise, they will be wiped out! There is no QE exit strategy.

Breaking - Fed may now end QE at end of 1013???

Agreed, they're playing with fire. I don't know what is going to trigger the loss in confidence. I would like to say severe currency debasement but over the past few decades it probably couldn't get any worse than it has been(with the exception of hyper inflation.) and yet everyone is more than happy to take it on. After all they can't pump all those dollars back into their currency, so might as well buy some more.

When the GFC struck, banks were bailed out, interest rates were lowered sharply, stimulus was embarked on etc. None of this has been stopped for the past 5 years, what do they do when we are struck with the next crisis(likely this year or next)? They have no where to go, last resort will be mass printing or deflation. It's just a matter of how long they can keep this puppy going before facing the music. Seems like a long time unfortunately.

PS did you mean 2013? or 3013?

and hopefully no silly politicians will try to "rescue".

Not a chance??

 

[young-gun]

Breaking - Fed may now end QE at end of 1013???

And it appears it's just whispers. A general statement made by some 'officials'.

"Several (officials) thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet," the minutes said.

A few of the voting members on the central bank's policy-setting Federal Open Market Committee thought asset buying would be warranted until about the end of 2013. A few others highlighted the need for further large-scale stimulus but did not specify an amount or time frame.

http://www.cnbc.com/id/100352475

 

[sydboy007]

Just waiting for the debt ceiling negotiations to start up, and when the the bond vigilantes realise Germany is already bankrupted from the "credits" they have built up int eh TARGET2 system.

TARGET2 is the central clearing / settlement system for the euro area and each night all trades are basically balanced out.

In October 2012 Germany had 695 billion euro in credits to balance out the deficits of counter party trades.

Basically Germany is damned if the Euro survives - via being stuck in a low growth economic zone for a decade or more, or they are screwed if the euro dies and they are left trying to get back all the money they have lent to the euro system.

I would say the only thing propping up markts at the moment is the financial repression being forced upon a lot of countries by their Govts trying to debase their currencies by artificially lowering interest rates to below CPI and forcing them to buy shares and chase yield in the hope of an above CPI income.

Whenever the next bout of fear kicks in the swing back to bonds will be swift.

 

[Struzball]

I'm bearish. It will be short and sharp and nasty, and hopefully no silly politicians will try to "rescue".

The whole system needs a good sell off, to clean it out. Bankruptcies, arbs jumping off computers backwards on to their smartphones.

If only markets were rational and did what was good for them. Too much funny business going on and I don't think that means a crash any time soon, maybe when the allords is at 10,000 it will crash back to 5000, but even then, maybe it will get pushed to 20,000 instead?

The only thing I know is market is going up at the moment, and has been since 2003.
Six months ago it was heading down and had been since 2007.

 

[Aussiejeff]

The US Fed is 'printing' $100BILLION a month that gets distributed around the globe eventually - it's gotta go somewhere even if it is into junk that has poor fundamentals. Until there is a loss of confidence in the global default currency? The irony is that if the US does get a recovery, when rates start to rise, they will be wiped out! There is no QE exit strategy.

Breaking - Fed may now end QE at end of 1013???

Wow... that was a looooooooooong time ago.....

On topic, the bears all died out when the world ended recently....

 

[CanOz]

The only thing I know is market is going up at the moment, and has been since 2003.
Six months ago it was heading down and had been since 2007.

Which market?

 

[Struzball]

Which market?

Disregarding the shenanigans in between of course.

 

[Knobby22]

No time to be a bear. Stop watching doomsayers on conservative TV and buy.
Sharemarket will keep going up now that Obama is re-elected.
I'm fully invested and made 6% this week.

 

[notting]

Eyeing the US Debt Ceiling, spain, and France.
Awakening to the sound of Ben talking of an early end to QE - predictable.
Very much looking forward to all the debates on the ceiling.
Waiting for the herd to turn.
At this time of year, bears thinking, it's a muppet rally, I mean don't we smart people normally sell the news!
Was there any smart doubt that the Cliff would be straddled.
I'm not one today at least.

 

[Tyler Durden]

Has the global equities market officially entered a bull cycle or is it illusory?

Craig Drummond, the chief executive and country head of Bank of America Merrill Lynch, Perpetual's head of equities, Matt Williams, Tyndall's head of equities, Bob Munster, Deutsche Bank's Scott Mailer, and others believe the rally isn't a false start, but a clear shift in the cycle.

Indeed, Craig James at CommSec revised his end-of-year forecasts for the Australian sharemarket to close at 5300, up 14 per cent.

"It does appear on current developments that we were too pessimistic, swamped by a 'perfect storm' of bad news," James says. He had previously estimated a year-end close of 4900 to 5000 points.

Drummond believes the turning point in the cycle was when the European Central Bank president, Mario Draghi, made his famous ''whatever it takes'' speech about Europe.

''Those comments said to investors there isn't a lot of downside in taking on risk. Prior to that point there was massive uncertainty about what the ECB would do and whether they would provide the liquidity,'' he says.

"Falling interest rates have helped, but it is also confidence, that's what has changed.''

For Drummond the world is continuing to globalise and the equities rally is a global thematic.
"If global equities run, Australia will be part of it," he says.

More at http://www.smh.com.au/business/brok...the-bulls-as-drought-ends-20130201-2dq20.html

I still think this is a false run, especially if the basis is Draghi's comment - printing more money does not solve problems in the long term.

I call a huge fall in the XAO in May this year.

 

[CanOz]

The reaction in the markets to the LTRO payments shadowed the NFP release...Gold went nuts.

Here's an article from Zerohedge...the author is Tyler Durden...

CanOz

 

[young-gun]

More at http://www.smh.com.au/business/brok...the-bulls-as-drought-ends-20130201-2dq20.html

I still think this is a false run, especially if the basis is Draghi's comment - printing more money does not solve problems in the long term.

I call a huge fall in the XAO in May this year.

Depends. This global rally may very well be as a result of all the fed interference. They were trying to re-inflate housing but it's obviously finding stocks around the world. I would expect this rally to continue for some time yet, given the fed is still printing open-ended.

 

[Tyler Durden]

Also, people are starting to get angry:

 

[Gringotts Bank]

Sentiment wins again. http://www.insideinvestorrelations..../19242/investor-sentiment-rises-sharply-2013/

Seems like all the commentators feel like the next high will be higher than the current, and the current leg hasn't even ended yet. Might be easier just buying a Aus200 CFD.

Funds too:
http://www.hsbc.com.au/1/2/about/news/13/130118

 

[Gringotts Bank]

^^^So is this good or bad?

Contrast with this:

Fund Manager Sentiment Reaches Extreme Bearish Levels

Posted: September 6, 2011

Hedge fund managers have turned very bearish against domestic stocks. The new data from BarclayHedge/TrimTabs Investment Research Survey showed that Bearish Sentiment on the S&P 500 rose handily in August to 42% versus what was only a reading of 27% bearish in July. While this is often viewed as a contra-indicator, the report shows that over half of those surveyed believe that the economy is already or will slip into recession.

Read more: Fund Manager Sentiment Reaches Extreme Bearish Levels - 24/7 Wall St. http://247wallst.com/2011/09/06/fund-manager-sentiment-reaches-extreme-bearish-levels/#ixzz2Jpe97YTT