Thursday, October 09, 2008

A Rout by Any Other Name

. . . . is still a ^#!$!^&& rout.


I don't have anything to really say about today that you do not already know. Unprecedented---comes to mind. Unprecedented wealth funded by debt ends badly. Whether we are invested in the market or not, we will be affected.

Prudent savers and investors trusting the markets to eek out a reasonable return so that they can live a financially independent life may now have to re-write some of that.

Capitalism and consumerism fed all of this. The indictment is squarely resting there--oh but wait. Aren't capitalism and consumerism the centerpiece of our American value system? Somewhere we squandered the deeply felt and hard-won values of freedom and independence for these two whores that promise only fleeting pleasure and a very dear price.

I've surmised here that underlying concept of the 'NEW MIDDLE CLASS' in emerging markets. Always said do breathlessly and full of hope that the appetites of the rising Asian and Latin American populations would prove bigger than our own. The pay off: lucrative goods and services. Of course, we'd have to inculcate the values of spending v. saving. I still hear the echo of the money managers saying that while the middle class American wasn't really important anymore and the luxury good makers would weather just find. IN fact they would IMPROVE. The chart below--a massive head and shoulder that broke within the last few days--tells a different story.


For those of you who employ technical analysis, I (layperson that I am) encourage you to employ a longer term view--10 year. Would you buy this chart? Looks like some roll over potential there.


What about this chart? Perhaps IBM will find support at $80 or so. Their revenue grew at 5%. I don't see that revenue growth accelerating in the upcoming economic environment do you?


Husband is in West Virginia. Hopefully there will be no accidents. This Mercury Retrograde has been pretty devastating so far. My son's wreck on the first day. Then the market's wreck each and every day it seems. Click on the graphic below to read more about Mercury Retrograde. You may find it interesting to not that RIMM had a major snafu under a Mercury Retrograde (remember when their systems went down). Mercury rules communication.

9 comments:

nice said...

Indeed, looks like Mercury the cosmic trickster has pulled a fast one on both investors and on the 'Wall Street' machine...

Hope everyone is unscathed...

The amount of 'unwinding' into US dollars is quite incredible - so at least one thing is working for Paulson.

Oddly enough the sell offs lately are not the 'a.m. European type' selling - but an 'end of day get me out' or maybe fund redemption type selling..

Tax losses are coming early this year...

The almost parabolic surge into ultrashort etf's in the last 2 hours was quite a sight to see -

Of course many are expecting tomorrow to be the 'big un' - a 1000 point drop - circuit breakers et al...

However it is a holiday weekend...

I guess if the planners are in dire staights - one way to give the market a 1000-2000 point kick up would be to:
Ban all short selling including banning short etf's on a temporary basis - that would be good for a fast bump in the DOW back upto 10000 probably...

btw Wonder who's on the losing side of LEH's settlements tomorrow?

Unfortunately I believe AIG settles in 2 weeks....

nice

nice said...

Near 2002 cycle lows early this a.m.

They are interviewing investors on TV this morning - and they are saying how they are shorting, all in cash... or averaging down resource stocks..


nice

Leisa said...

I closed my DUG. Entered it at the beginning of the day had an 8 pt slippage prior to their filling it. A commond problem with these ETFs. Kept my DIG.

I miss my OCT 35 DUG calls...Sold them in AUG for about $5 and htought I was doing well. Made 3.5K and walked away from 40K...Oh well....

nice said...

One has to wonder where the buyers are going to come from?

A lot of Hedge Funds are out of business...

Those that held or bought this year - are not likely to go back in.

Those parked in cash may need the money for spending...

Oil is nearing $75 which was my target...

Recall last summer I mentioned that Oil always returns to its previous spike

The last spike was 1991 gulf war - $40

I think we will go back there (adjusted for inflation) over the next 2 years

I still find it amazing that 3 months ago everyone was talking about global growth and commodities - and 3 months later everyone is talking about a world wide depression.

I think things have gotten ahead of themselves re: the depression over the short term anyways...

VIX 70... that's panic

My 'tin foil' wonders if the SEC is upto something? - maybe more rule changes coming??

nice

nice said...

Boy the margin calls on some of these resource stocks must be quite large...

And the US dollar still rising...

Did Paulson sacrifice the stock market to save the dollar?

nice

nice said...

Seems a little odd here - with all the finance ministers talking about closing the market while the market is open - it only creates more fear

And spearding stories about circuit breakers...

What the heck are these guys thinking...

These guys better getta grip on things soon or it really will be 1929.

nice

nice said...

Going long here some stuff ...

nice

nice said...

A little bit overdone on the Canadian dollar

down 25 cents in a very short period of time...

Worth watching this one - since it correlates will with the cyclicals..

Cananda's new Central Bank head is-from - you guessed it - a Goldman Saks - spent his time in Russia helping GS make billions for the oligarchs -

These guys are planted every where now it seems... sad

nice

nice said...

Nice (close) that is

have a good weekend all...

nice