Tuesday, September 14, 2010

FRANK TALK

Some things change but some things remain the same more than ever, and after an historic run for stocks from the March 2009 lows, its time to be realistic about what may lay down the road.

Most of my contemporaries have NO or little memory of the 1930's or 70's, most of us have the last GREAT BULL MKT that began widely accepted in 1982 in our minds.....ever larger credit and debt growth, easy lending, easy job hunting, higher values for stock is our experience....until now.

And there is a HUGE difference between inventory glut investment Recession and one caused by credit excess and debt gluttony......why else or when in our lifetimes have we seen stocks over a 10 year period DECLINE?

*(PLEASE read John Hussman piece I posted yesterday for plain honest asessment)

WHat follows a timid bull is a timid bear. What follows an historic long term BULL is a nasty big bad Secular Bear.....we my friends IMHO are still in the grasp of that BEAR....and that's why we had the jobless recovery of 2003 and why we are in JOB LOSS recovery now.

I keep hearing the MSM and other cluesless idiots telling people how "great the banks are doing", BUT ONLY because FASB (and GAO) CHANGED THE ACCOUNTING GAME which led directly to stocks bottoming in March of 2009 that allowed BANKS to value said crummy paper at MUCH HIGHER than realistic values on their books and they APPEAR MUCH healthier and profitable than they actually are! THIS tells me the SPX profits are a MIRAGE!...so why should I be buying them?

YES, stocks have rallied, YES they "could" go higher, but it more likely IMHO that they end up MUCH MUCH LOWER than they are today when they BEAR tries to finish the job....maybe 50% LOWER.

I go back to what "GREAT BUYING OPPORTUNITY" in historical context would look like, the S and P 500 would yield closer to 6%, not the current anemic 2% !!!! AT the 2000 top it was 3% !!!

If you look at employment chart in Hussman piece, you can see the magnatude greater the job losses were than pervious weak period 2000-2002....and how much weaker any job creation IS compared to even the "jobless recovery" then.

And the FACT that autos, finance, credit growth, housing and related all layed ahead to propel economy from 2003-2007.....what will now, the same? not hardly. We have shown from chart after chart how housing even after historic intervention and stimulation has been HARDLY IMPACTED......the stock market is priced BEYOND PERFECTION and for a V-SHAPED RECOVERY.....have we had that?

10 YEAR BOND YIELDS BELOW 3% are NOT consistant with recovery thesis. FORGET double dip calls for a moment have we even experienced a meaningful recovery at all?....especially fo you take away cheap trick stimulus ploys that ONLY borrow from future demand....we have a GIMMICK ECONOMY.....as soon as home buyer credit ended sales slumped..and are still lying at historic lows.

"we will force banks to loan" REALLY? banks are wary, consumers and businesses are wary...I'm not sure the HORSE will drink even if led to the water.

If my biz falls by 70% but then it bounces are grows by 10% from those lows is that significant? But I can call it growth!

I have pointed out how the uncertain climate has added to business malaise, that it was MORE important for Obama to pass socialistic agenda then to put economy first, pro business, pro growth first.....whatever plan is being talked about, forget about it....too little too late.

Election time, get RID of the establishment....new blood is needed, new ideas....a new direction and JOBS and small business put first, ELLIMINATE THE UNCERTAINTY.......any social agenda or war efforts etc has to be borrowed, we just set record wit $1.3 TRILLION deficit...BUSH on steroids, stop using BUSH as excuse! lame ass politicians.

CUMMULATIVE DEFICITS now equal to year of GDP near $14Trillion.......who do you think is left with the bill?

WE have charted the current short term stock action, and when we see a break we will have better clarity.....10 months and no new high for market.....bully.

THIS JUST IN

Eurozone economy shows signs of slowing down
4 minutes ago (ino.com)

"Europe got further evidence that its unexpectedly strong economic recovery is slowing, with the news that German investor confidence fell sharply in September and eurozone industrial production unexpectedly stagnated during July."


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