Saturday, February 18, 2012

"Yet these types of policy-induced market runs become the devil’s playground for precarious Bubble excess. With the bears out of the way, stock prices become easily detached from underlying fundamentals. Markets become dislocated – and speculation runs roughshod. Markets will tend to climb walls of worry – and derivatives will tend to leverage market buying power. And a marketplace dominated by trend-following and performance chasing trading dynamics forces everyone in. It convinces most to disregard risk. Hedging is abandoned, and everyone gets comfortably positioned on the same side of the boat.

I look at the global backdrop and see all the makings for a major, major market top. It’s just impossible to know how far away – both in time and price – we are from such an outcome. I don’t envisage a new bull market – but instead see the same type of manic marketplace that brought us the 2010 “flash crash” and the 2011 10-day market shellacking. "

My sense is "enjoy it while it lasts". If you don't think the entire run from 2009 is courtesy of the Federal Reserve and worlds' central banks, better think again. With bond yields here and elsewhere below 2%, they have left you with FEW alternatives, and usually when the choices are slim and none trouble follows....this is NOT a normal functioning market when the people are forced to ALL go in one direction.

Remember who also OWNS the majority of the Bonds being bought at such generational lows in yields? F E D.....Are you making a 10 year committment at 2% or below? Are you buying the argument there is little inflation?

What has the FEDERAL RESERVE and GOVT policies brought us in the last 12 years? BOOMS AND BUSTS, BOOMS AND BUSTS....let's see we got ? BOOM now without the job growth it normally brings....and what follows? B U S T

It's going to be onehelluva BUST as well, because now we have government bonds invloved and the printing presses have been going NON STOP all over the world. The gov't finance bubble is going to POP.....and they might go down like dominos.

SAVERS have been hosed down like Greek rioters in the street. No ONE asked them about the bailouts, about the FEDS 6 YEAR 0% RATE POLICY.

The stock market has always been a place of ups and downs. In bull markets you just HOLD ON, as long as the trend continues, as the market always goes up over time. There is precedent however where a BEAR can last up to 16 years.

"The current market entered a long term secular bear market in 2000, and as history shows us, this will last at least until 2010, probably longer. As demonstrated above, during secular bear markets, the market trades in vicious cyclical bull and bear markets. Therefore, you have to be careful in the stocks you buy and be ready to sell them quickly should the market turn against you. Pull backs or cyclical bear markets will present opportunities to take new positions once they have run their course. It is also important to find value situations and play the hot sectors. We will need to be defensive in our positions and for those who are willing to take the risk, we may want to take some short positions.
Trading and investing is much easier in secular bull markets, and much more difficult during secular bear markets. Since we are in a secular bear market for the next 5 to 10 years, it is going to be much more difficult to be successful in your trading and investing.

Currently, the cyclical bull market that begin in early 2003 is close to being over and a new cyclical bear market will begun that will last another 2 to 3 years. This means that the best plays will be on the bearish side for the next couple years, that is, until the next cyclical bull begins."

If you followed above advice and enterred markets in 2003 you exited a bit early but out by 2009 bottom add 3 years you get? 2012.....PIGS GET?

Now IMHO we are STILL in a SECULAR (long term) BEAR MKT? WHAT???!!! ONLY gov't and FED actions, of historical nature have both avoided the inevitable corrections to markets and economic excesses and prolonged a REAL RECOVERY.

Are we headed for an historic BLOW OFF TOP? I think so....look around and see what is being done to stave off what is just around the corner, major Greece bond holders are happy just to get BACK 50% on the $ or Kroner or whatever its called.

GOLD refuses to give up the enterred a TRUE BULL MKT in early 2000 when the FED games began and we have had 2 bulls and 2 bears since then....and they fight it even more now.

And they say "we can withdraw the liquidity" no problem.......with a market doubling from the lows, all these calls of economic expansion, job growth....corporate profits.....why then continuation of 0% rates for another 3 years?

Is a BOND MARKET accident waiting to happen? What if yields begin to rise? and get away from the open manipulation?

US deficits don't seem to be much of a problem.....with attention elsehwere, even to Japan where they have the worst ration to GDP of any's still seen as safe haven...they still fight DEFLATION since 80's.

In for a penny, in for a pound, THEY can't stop now.....the lie grows and grows.....there is NO free market.

Some companies offer a program of "guaranteed" high as 8% a year....and you ALWAYS get the wins, never the losses.....I am guessing you would have to ANNUATIZE the money and get paid monthly for the rest of your life or sacrifice your get paid as long as the company issuing these promises stay solvent.

NOPE, I don't know where top will be or when it will come, but I'm pretty confident because of how we got to here, that this seemingly risk free market is going to reverse and when it does....retrace most of all of its gains and end at new lows.....all will be hope is the fabric of our society can hold together....for that we should pray.


No comments: