tag:blogger.com,1999:blog-2335748440449035592.post1194989170713584530..comments2008-10-01T11:56:01.598-04:00Marknoreply@blogger.comBlogger6125tag:blogger.com,1999:blog-2335748440449035592.post-3642299662804875302008-10-01T11:56:00.000-04:002008-10-01T11:56:00.000-04:00Thanks Ferminator<BR/><BR/>I actually, on the economic side, have probably been running at a 95% accuracy call, going against the herd and saying it is far worse than everyone was saying. Unfortunately I cannot trade futures on my economics calls or I'd be up 100%. Even worse during those periods the market ran on "hope" instead of "reality" I lost a lot of money versus the market when my short ETFs ran me into the ground. So there is a lot of irony out there. I have a lot of posts from late last summer and fall that one day I should pull together to show some sort of competence :) <BR/><BR/>But guessing the market versus guessing the economy have been two completely different animals.<BR/><BR/>I believe what you are seeing is a delevering in every part of the US economy - perhaps global but there is true cash in parts of Asia and the like. When delevering like this happens everything goes down. Hedge funds in particular are the "marginal" customer on every stock - they dont hold the most assets but do the most trading so when they are being forced to reduce their leverage and have panicked investors that brings down the price of most everything. I think that has been happening - banks trying to reduce risk and some just going out of business (Lehman) obviously are not giving the same latitude in terms of letting institutional investors borrowing - its just a credit crunch the same as it is on the borrowing side for normal non investing items. So everything is in effect shrinking. Even companies who are using cash to buy back stock are selling off after the initial reaction.<BR/><BR/>Our biggest creditors are actually in Asia and it still is in their self interest to keep us afloat because we still are too large of the world GDP. What the US needs to realize is every year that passes the US is becoming less and less of world GDP. At some point in 10-20 years the US will become small enough a part of world GDP (and by then our debt will be probably 2x or more higher) that the plug can be pulled. The world will feel pain, but less pain then they do now. And thats when the US will default on its debt and officially be a banana republic.<BR/><BR/>So to answer you - no it is not a conspiracy. The US financial system is more than double as levered as any other country in the world. So if we just went back to the mean it would cause tremendous pain. The world can't afford (yet) to let us free fall. But as the middle class grows in those countries, especially in the East, and more of their own GDP is based on internal growth and less on exports - one day they will pull the trap door below our legs. And as all debtors one must day do - we will face the music.TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-74104531705145019872008-10-01T09:55:00.000-04:002008-10-01T09:55:00.000-04:00Mark,<BR/>I found your Blog by accident via a google search for "Citibank" "sale" "arab" "stake" which turned out : http://www.fundmymutualfund.com/2007/11/citibank-c-sells-stake-to-abu-dhabi.html<BR/><BR/>You wrote this in Nov 2007 so just short of 1 year ago, and I was blown away as to how spot on you were!<BR/><BR/>Unfortunately I'm caught in the market due to my ignorance with a large position (as far as I'm concerned) in AAPL and can not bail out at the moment as I'm leveraged and I can wait it out for the long run.<BR/><BR/>What is amazing to me is that there is so much downward pressure almost to the extent that someone wants to nuke all US equities despite companies like AAPL having no debt and a very positive cash and liquidity position with a health growth prognosis.<BR/><BR/>Do you think this is being induced by foreign interest as a final blow to finish off 9/11? I know it sounds very conspiracy like, but just recently we've seen some major alignment in OPEC with Russia, Venezuela, attempts at including Brazil, along with African interest not to mention IRAN.Ferminatorhttp://www.blogger.com/profile/18264301138529262190noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-12360536244514596412008-09-30T19:34:00.000-04:002008-09-30T19:34:00.000-04:00Always a kick to read TM's pieces.. <BR/><BR/>Also, I agree with nxgstock's feelsings about this being a trading bottom and not a final. <BR/><BR/>I remember watching Louise Yamada on Fast Money when she said the DOW would trend to 10,000 if it dropped beneath the present (present day of the show) support. The Fast Money crowd had a chuckle over that, but we sure were getting close yesterday, weren't we. Her book, "Market Magic" just arrived today. I'm looking forward to reading it.. <BR/><BR/>jeganjeganhttp://www.blogger.com/profile/05850061548373752817noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-6101939233425523552008-09-30T16:36:00.000-04:002008-09-30T16:36:00.000-04:00The catalysts of this crisis are different, but human behavior is almost always the same. Successfull participants in this market will pay more attention to the emotion of the crowd than to the reason they are emotional.nxgstockhttp://www.blogger.com/profile/05833841974191631472noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-58344372390212723632008-09-30T16:22:00.000-04:002008-09-30T16:22:00.000-04:00A big down day would of been good to create a washout bottom<BR/><BR/>The problem with history is there is no real precedent for the situation we are in - early 90s late 70s early 00s all have different conditions. Most of this recent volatility is due to government, nothing to do with 'markets' or 'stocks. Today they cheer the potential elimination of mark to market. Because that will obviously stop the foreclosures. We again are turning into Japan 1990s - we almost have their blueprint down - now we will change the accounting rules so toxic loans can be hidden for a long time. Perfect.<BR/><BR/>We shall see how earnings season unfurls. Maybe expectations have been lowered enough that disappointing guidance is baked in. Maybe not.<BR/><BR/>First comes Washington DC and then the labor report Friday. <BR/><BR/>We'll see how it goes - people forget there was no real bull market in 68 to 82. So the period of 00 to 08 could just be a replication of your history - meaning we have another 6 years to go ;)TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-35248078239924874922008-09-30T16:12:00.000-04:002008-09-30T16:12:00.000-04:00Mark,<BR/><BR/>I think the saying is that volatility is always greatest at turning points. Yesterday and now todays action is near text book reversal stuff. A wash out right away this morning would of been completly orgasmic for all of us "dying to become a bull" types. I will go out on that limb and say this is a good trading bottom to work off of. Long term bottom?, who knows. <BR/><BR/>After months of watching and a little snickering, I've moved into some of these disasterous commodity stocks. Your pick of JRCC was interesting so I dabbled with 7000 shares this AM. So far so good. Lots of other things loaded into the portfolio as well. Won't be suprised to see some side ways action for quite a while. Take a look at 87' and the action a month prior and two months after. History is always an excellent guide!nxgstockhttp://www.blogger.com/profile/05833841974191631472noreply@blogger.com