Are things really bad and 90% certain to get worse? Yes.
By Daniel at 7 December, 2008, 9:59 am
I think the market has seen some interference at times of stress but mainly just sentiment and look at the vaporous things that have changed it.Hartford shares more than double. Makes a good headline but substance behind? I(ncreased earnings forecast by a huge 10% based on increasing prices apparently- fat chance. Earnings forecast reduced by half! less than 2 months ago, shares then down 90%.
Remember the bald muslim who was actually applauded after tarp passed? Well he went away to get to work- well he went away bought nothing at all laid low but by coincidence?! popped up yesterday making soothing sounds, no evidence just that.
Not much but the coordinator of themanipulation Bloomberg tv and MW made the most of it and again had people on who they knew would make optimistic noises and if they did not really the introduction suggested they were bullish!The 2 main themes repeated ad nauseam for brainwashing effect were:-
Unemployment is a lagging indicator and we now know the recession has been going a full year and since they do not tend to last more than 16 months it must be nearly over!
Well all indicators are lagging and forecasts are just that forecasts. I would trust Nokia`s horrible forecasts over these guy`s self interested ones. The fact that the market is forward looking does not mean these bad employment figures are going to stop in 4 months time. As some have said the 600k people who have just lost theirs-with the revisions highest ever? are not going to be going out spending.
This is clearly not a typical recession. It will last much longer simply because in modern times they strain every sinew to stop it happening instead of letting it take its course. They managed to “fix” it in 2003 and now is really a continuation of then. We had the dot com type bubble but that was cured by the housing bubble and serious economists thought they had run out of bubbles but no we now have the printing press bubble!Obviously this is no cure whatever- read about Zimbabwe-but for the moment experts are holding their criticisms for patriotic reasons?
see Oscar Wilde?
Argument- so much deleveraging print press ok for now -big inflation not for at least 12 months. Still a huge steamroller coming down the hill and if you were the Chinese who likewise must be forward looking would you not be thinking to get right out of treasuries just now when price so high and $ so strong. Will be the opposite before too long.
No comments yet.