All The Negatives Are True

All the negatives that everybody is focusing on are true.
  • Their are pension issues.
  • There are municipal issues.
  • There are sovereign issues.
  • There are commercial and residential real estate issues.
  • I can go on but you get the point
But these issues have been around for a long time, including through an 80% rally. In the bigger picture I believe these issues will keep us in a secular bear market. In the short run these issues tell us nothing.

6 comments:

PJ said...

Yes, except that GDP was rising, so there could be hope that rising incomes would eventually bailout the balance sheet issues.

Now it's becoming clear that GDP and incomes will fall and the balance sheet issues will have to be dealt with through defaults. That puts a whole new perspective on the question of how much are you willing to pay for a risky leveraged asset?

IC said...

When there are tornado conditions that does not mean there will be a tornado, but it is not prudent to venture out. Yes all these problems were known, yes we bounced. Might bounce another 10 times, but sooner or later the problems will overwhelm and there will be a rush for the exit. Crashes happen from oversold conditions for this exact reason.

Tsachy Mishal said...

9 out of 10 times the market bounces under these conditions. The one loss probably takes the profit away from 3 wins but over time but that is still a net of +6.

Where was everybody warning about these issues in April. Its the same people who were talking about how great the "liquidity" was back then that are now giving dire warnings.

Anonymous said...

clearly the housing numbers and others were not as bad in April.


I find it amusing that you emphasize any positives when you are trading long. Then, when you sell or short you immediately flip and emphasize why the markets will drop.

-- the psychology of trading!

Anonymous said...

I think we are in a market where one should be quick to sell (when overbought) and slow to buy (when oversold).

You seem eager to get long at the first sign of an oversold reading, especially for one so overtly bearish from a fundamental standpoint.

JD

Tsachy Mishal said...

What positives have I emphasized? I am saying that it sucks out there and the bears are right.

My view about the economy has been remarkably consistent all year.