Bull or Bear

[Katare]

Recently we had a panic attack on stock markets all over the world fueled by the fear of sovereign debt issues in Europe. Investors are sitting on almost 100% gains from where they were a year back which makes them pretty nervous. On the other hand we have ~$3 trillion sitting in money market funds waiting to be deployed in equities as soon as buying opportunities present themselves.

Is it a short term buying opportunity for investors that missed on the largest stock market rally of their life time last year? Or is it the beginning of the equity market collapse all over the world.

To make it simple, specific and measurable the poll is only about stock markets in USA.

Let’s see if collective predictive might of BRF is ahead of the (time) curve or not.

Please vote and explain in detail your views (and vote). Also feel free to extrapolate how equity markets in Asia and Europe would fare in short to medium terms

Disclaimer: Please do not use this poll or any views given by any poster as basis of making equity investments. Do your own due diligence and seek professional help. Alternatively you can ask astrologers, fortune tellers or flip a coin.

[Chinmayanand]

The poll is not working , my choice is second. I think we are done with the rally.

[Katare]

Mods,

Could you please fix the glitch!

[Katare]

The Polls been fixed, please vote and explain.........

[Katare]

Led by Wipro, Indian ADRs lose $12bn in a week

[wig]

economics is like hindsight; exceedingly accurate to describe/ analyse financial events that are history. but the big subsidies given to banks and financial institutuions are not being adequately represented in growth in manufacturing, infrastructure or new technologies,
as a matter of cold fact research and quality manufacturing and innovation no longer is the preserve of the G-8 countries (include the european powerhouses) india, china and a host of other countries globally are deepening the technological roots that are vital for industrialising the economy comprehensively.
cheerio!

[mnag]

the futures in usa are up close to 2% at this time. Still tomorrow could turnout to be a red day, but my guess is this would be another short term buying opportunity followed by a big drop later in the year - similiar to what we saw in 2007.

[Katare]

Markets have recovered from their route last week......
Wall Street Soars; Dow Surges 400 Points

Sensex gains 561 points after IMF emergency aid to Greece

[RoyG]

Throwing money at the problem will only delay and worsen the economic collapse of the west.

I find it funny that some people here in the US still think we can prevent it.

We don't produce anything except arms to help our military dissuade countries from diversifying oil transactions out of the dollar.

Meanwhile, the dollars in circulation continue to increase thanks to remarkably low interest rates and stimulus measures.

How long can the US hope to keep this up?

[Muppalla]

There are new cycles in economies these days hitherto never heard off in the past or any tranditional economic lingo. The steps in the cycle are:

(1) A country goes deeply into debt and to an extent of "point of no return"
(2) The stocks collapse with all records tumbling
(3) Doomsday theories are talk of the towns
(4) Now comes a magic wand and the angels start printing the currencies very rapidly
(5) Debts gets readjusted
(6) The stocks soar to new heights

The economy is back to normal. Some of these cycles as quick as three days.

This is the most innovative invention of the 21st century. So the summary is just live on debt and nothing is going to happen.

[svinayak]

There are new cycles in economies these days hitherto never heard off in the past or any tranditional economic lingo. The steps in the cycle are:

(1) A country goes deeply into debt and to an extent of "point of no return"
(2) The stocks collapse with all records tumbling
(3) Doomsday theories are talk of the towns
(4) Now comes a magic wand and the angels start printing the currencies very rapidly
(5) Debts gets readjusted
(6) The stocks soar to new heights

The economy is back to normal. Some of these cycles as quick as three days.

This is the most innovative invention of the 21st century. So the summary is just live on debt and nothing is going to happen.

All these are temporary measures. It will last 2-4 years and then the inflation will kick in.
If global trade reduces or there is a threat to it due to war then there will be super inflation and collapse of currency and insolvency

[Neshant]

the only metric i'm looking at is - is there ANY new industry creating high paying jobs.

if the answer is no, then the so called recovery is as bogus as the "build the economy by flipping houses" method.

ultimately something has to power economic growth. problem with bernanke and the boys is they don't understand that. they think just pushing money round and round is somehow going to spark some magic.

[Katare]

Interesting hypothesis Neshant. But why a new industry is needed for recovery to happen? why can't existing industries grow at top end in US?

[vina]

Katare, though I am "vina the bear" ,I just voted for 1 "it is a short term buying opportunity" . Yes, I think the stock market isnt going to collapse (Euro collapse is off the table now). However, that said, I don't think it is going to boom either.

The market is going to stay where it is. The US market will be stable. Euro zone will be very hard pressed to return to decent growth anytime soon. China is already getting it's nuts squeezed. The Chinese market as of now is in a "bear" ie. 20% off it's peak. I think the fat lady is going to start singing in China soon.

All in all, any positive news will be balanced by the shocks that come from other parts of the world. I expect the China shock to ripple through finally. Yeah a "China Shock" will in a perverse way be good. Commodity prices will collapse and that will take the inflationary pressures out of the world. Lets face it. The largest source of "imbalance" today is China and they can continue to "fund" that imbalance because of their support to RMB and the ability to subsidize inputs and other key costs and provide cheap finance to Chinese industry.. to do that, they export commodity inflation outside, "deflation" of finished goods , while sucking up jobs from everywhere else. Long term, I think Brazil and Australia are at their absolute peaks. If there is anyway to short those two economies and currrencies, I think I would do it.

[Chinmayanand]

I think S&P 500 may fall to 865 in the coming months. Since i follow the technical path to my trading, i cannot add any view on the fundamental side to my view. But I can see S&P going down. The fall may start from tomorrow . I expect S&P to touch 1165 to1170 today and then that's it.

[RoyG]

Interesting hypothesis Neshant. But why a new industry is needed for recovery to happen? why can't existing industries grow at top end in US?

What existing industries lol? We generally manufacture Hi-Tech products which don't require mass employment. Everything else is either private service sector and inefficient public sector jobs. Both of which are now dependent upon an overinflated economy. What the US needs is another industrial revolution. Manufacturing, emphasis on savings, privatizing much of the inefficient public sector, shrinking our military, ending much of the social welfare schemes, end to bailouts and stimulus for good, and reverting back to sound money is the only way the US will get out of this. It's a tough pill to swallow but at this point we don't really have any other choice! I honestly believe that we will be hit with a currency crisis within the next two years.

[Neshant]

Interesting hypothesis Neshant. But why a new industry is needed for recovery to happen? why can't existing industries grow at top end in US?

Exactly what top end growth are you referring to? Perhaps you could identify specifics and how this contributes to a major boost in productivity/profitability and the creation of high paying jobs.

The work of many existing industries is already being done overseas at a fraction of the cost.

A new industry that has the potential to generate large scale high paying jobs and boost productivity needs to emerge. Something that has the equivalent impact to the computerization of the workforce in the 80s/90s or the internet in the 90s. Then the recovery follows as productivity skyrockets and companies start emerging, innovating and hiring. Its absurd to claim recovery when there is nothing driving it.

When there is nothing driving it as per post-2000, you know its a bogus recovery.

So just keep your eye out for any new industry which has the potential to massively boost productivity. Once you see it and it starts taking off, you will know there is recovery. Until then, all the central banking, financing & bullsh&tting in the world is not going to spark any magic. Tightening this and loosening that, easing credit and using monetary tools to do whatever... is just hog wash. The stock market has become a meaningless metric due to rigging.

IMO by the time this thing is done, keynesian economics will be relegated to the garbage can of history along with all the wall street high rollers.

[derkonig]

Seems the bears are back on the markets, not just any other bear, but the russian bear from the tarrel mountains and deepest lakes of siberia

[Chinmayanand]

I think , S&P may rally back to 1140 from here. Time to get out of short positions here at 1045.

[derkonig]

AoA,
Any bets on where will the Down Jones end up today?

[amdavadi]

My Bet is dow is down 310 by close...See you at dow 8K

[mnag]

Yes. if it doesnt hold 1045 on S&P today through Friday, we're in for deep trouble. However, there is some support at 1020. if that
breaks, it will be disaster.

I am seeing 90% down volume versus 10% up volume. if things dont improve by 3 PM, it will be down 300

Just my opinion

[Prem]

My Bet is dow is down 310 by close...See you at dow 8K

Hmm, it was close to the mark.

[Katare]

I was castaway for several weeks in nomen's land, back I am to see world hasn't collapsed or gotten hunky-dory yet.

Dow was at 10380 when I started this thread and it closed yesterday below 10K point.

Vina the bear is as usual being bearing around and we have Paul Krugman predicting depression now…..

What has changed?