The Meltup Cometh
Bloomberg's chart of the day comes courtesy of proud "TARP 4eva" badgeholder Bank Of America. Basically it says to expect another 40% rally in the markets (yes on top of the 50% witnessed already) simply because America is now the same basket case economy that Japan was in the 1990s (and continues to be today), even though as everyone will attest the connection between economic reality and market stupidity ended long ago.
According to Bloomberg:
A “melt-up” rally in the U.S. may be triggered by central bankers keeping interest rates near record lows, an economic recovery or an undervalued dollar, Bank of America strategists wrote in an Aug. 26 report.
“Even in economies overcoming credit booms, rallies can be powerful and last much longer than you think,” Bank of America’s Sadiq Currimbhoy, Arik Reiss and Jacky Tang wrote. Should the similarity between the U.S. and Japan persist, the S&P 500 will keep rising, partly because of gains in the dollar, the Hong Kong-based strategists said.
“If there is one persistent similarity between Japan and the U.S., it is they both seem to be fighting a debt problem by producing more debt,” they added. “So, for equity investors, if these relationships were to repeat themselves, the risk for the U.S. market is that like Japan, the stock market ends up with big rallies and then sell-offs.”
Granted the fact that the Nikkei subsequently tumbled to new lows is somehow lost, but courtesy of HAL9000 which only cares for reading and replicating charts, the possibility of the fabled melt up will likely soon become a self perpetuating truth, as everyone starts expecting, nay demanding, another 40% run up in stocks just so that the HFT can extract their last several hundred million for providing liquidity in 4 financial stocks, then call it a day and buy that much needed 8th summer villa in Monaco.
(31 votes)
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on Fri, 08/28/2009 - 15:23
#52175
HA, That was real timely commentary ( if we got it 5 months ago)
on Fri, 08/28/2009 - 17:18
#52323
I think TD provided a similar comment back in early March if my memory serves me correctly, if I find the link I will post it. (I definitely know that Rosenberg in a commentary a couple of months ago postulated a melt up to S&P 1200.)
on Fri, 08/28/2009 - 18:14
#52370
and here is the link from June and an excerpt:
"
Tuesday, June 2, 2009
Equity Market Observations From Rosenberg Posted by Tyler Durden at 10:11 AM
In his morning update piece, following up on his CNBC interview and providing much more clarity on the themes he touched upon, Rosenberg gives his explanation on the four factors currently in play in the market, which include i) technicals, ii) fund flows/market positioning, iii) valuation and iv) fundamentals. It is a tale of two cities, with the first two indicating a disconnect from reality as the market has likely more potential upside, while the underlying valuation/ fundamentals representing a market that has rarely been as rich.
On the technicals, Rosie sees a possible break through all the way to 1,200:"
http://zerohedge.blogspot.com/2009/06/equity-market-observations-from.html
on Fri, 08/28/2009 - 18:46
#52410
Tyler is that you hiding under the bag?
on Fri, 08/28/2009 - 15:24
#52179
Whatever comes out of these gates, we've got a better chance of survival if we work together. Do you understand? If we stay together we survive...
on Fri, 08/28/2009 - 15:39
#52202
this isn't Left 4 Dead.
on Fri, 08/28/2009 - 16:48
#52288
How about Gladiator?
on Fri, 08/28/2009 - 18:22
#52382
I take it you never watched Gladiator. That would explain the commenter's name ... and his picture ... and his post.
on Sat, 08/29/2009 - 21:54
#53162
Pity.
on Fri, 08/28/2009 - 20:05
#52490
The cake is a lie.
on Fri, 08/28/2009 - 22:46
#52659
Now THAT IS a DEEP REFERENCE!
Valve YOU!
on Sat, 08/29/2009 - 00:37
#52712
get ready for the hored!
on Fri, 08/28/2009 - 15:25
#52180
I don't think that S&P chart is accurate. Plus, there are no corresponding dates on the X axis. The recent bounce is much larger than the bounce illustrated here.
on Fri, 08/28/2009 - 15:46
#52215
Agreed. I think it might be the $NDX (??) not the SP500.
on Fri, 08/28/2009 - 19:02
#52435
It looks like the SPX is inflation adjusted and the Nikkei is a nominal chart.
But, like the above poster said...could be the NDX
on Fri, 08/28/2009 - 15:32
#52190
If you compare charts of the last few years against the great depression era ... this 50% rally appears done and we're headed for a big decline soon.
in this bizarro "market" I'm not sure what are the apples and what are the oranges?!
on Fri, 08/28/2009 - 15:58
#52236
But that doesn't factor in Ben's liquidity--we were on the gold standard in the '30s. Take a look at ZH's liquidity bubble article today...
on Sat, 08/29/2009 - 16:32
#52948
Ben's liquidity just sits around as excess reserves.
on Fri, 08/28/2009 - 15:37
#52193
In other news, NASDAQ Composite has completed a 50% retracement of its move from the 2007 top.
on Fri, 08/28/2009 - 17:38
#52337
AND a concurrent 23.6% retracement from 2000 high.
on Fri, 08/28/2009 - 21:17
#52579
hahahah great post! very clever. hows that goin for ya? being clever...
on Sat, 08/29/2009 - 16:35
#52822
whole market way overvalued
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
on Fri, 08/28/2009 - 15:36
#52195
I know this is totally off topic, but I want to suggest this one more time and then I will shut up. Electronic billboard with smiling Ben Bernanke's face and waving his arms throwing away dollar bills. Times Square if you can raise enough donations. This would engender more public discussion than 1000 bloomberg stories. I will donate and I am sure hundreds of others will too. I am typing this out of frustration at not being able to do anything about all of the curruption. This blog is very informative but extremely frustrating for those of us powerless to do anything. Tyler, if there is a more constructive way for us little guys to put pressure on congress to address the issues that you highlight every day, please let us know. Thank you.
on Fri, 08/28/2009 - 15:51
#52223
Good idea. I would donate too.
on Fri, 08/28/2009 - 16:28
#52270
I would donate as well. I love the idea.
on Fri, 08/28/2009 - 16:32
#52271
I'm in, open a special tip jar for this and I will donate.
on Fri, 08/28/2009 - 16:59
#52307
I think you have to be part of the problem to get billboard ad space. You think your money buys free speech or something?
on Fri, 08/28/2009 - 17:00
#52309
Count me in as well.
on Fri, 08/28/2009 - 17:15
#52321
Recruit graffiti artists to do it, they'll put them everywhere. You'd be supporting the arts, maybe its a write-off?
on Fri, 08/28/2009 - 17:32
#52331
sort of like the Obama Joker Poster contest that had them posted everywhere -- nice idea - Zero could have a contest with various poster templates - here is the vid of the Joker contest winner
http://www.youtube.com/watch?v=tmbOIF8AJ7E
on Fri, 08/28/2009 - 18:27
#52386
Thanks for the link ANON, that was an awsome video.
This is much more project Mayhem style. ZH, you've got to think of something to make your audience a part of the solution, then you will have a movement not just a sounding board...
on Fri, 08/28/2009 - 18:41
#52403
What is so unnerving is that the conspiracy crowd are making more and more sense - take for example the headline on Drudge right now about the Internet - meanwhile the MSM is non-stop Ted Kennedy, I even heard William Kennedy Smith interviewed today; it's like Teddy is a latter day Mother Theresa as opposed to the drunken whoremaster that he was.
on Fri, 08/28/2009 - 20:02
#52484
They left out maslaughter!!! Mary Jo was a living person.
on Fri, 08/28/2009 - 21:11
#52571
yes. thank you for saying that. funny how it's all just overlooked. sincerely......
on Fri, 08/28/2009 - 16:02
#52238
I'm in!! Bernanke in a helicopter, big, shit-eating grin, dropping dollars on lower Manhattan.....that will do it for me!
on Sat, 08/29/2009 - 00:53
#52721
http://www.youtube.com/watch?v=rq0Ez7DZSnI
on Fri, 08/28/2009 - 17:44
#52343
Yep, count me in too. But can you use this picture of him crying please?
http://static.soxfirst.com/soxfirst.com/imgname--the_bernankeobama_dance...
on Fri, 08/28/2009 - 22:56
#52666
eeeeeeeeew. Needs a manicure. Badly.
on Sat, 08/29/2009 - 03:37
#52751
This is not especially effective. Instead, I would have a pit filled with common-looking folk, sweating and shoveling piles of money up to a stage where Tim Geithner stands. Then Geithner hands it to Bernanke, who bags it, and then hands it to a gathering of suited men smoking cigars and drinking champagne.
on Sat, 08/29/2009 - 07:07
#52771
Write your Senators and Congressman - email works fine. Ask for passage of the Audit the Fed act. Tell them they are nuts to even think about carbon credits. Tell them to leave healthcare alone until we figure the rest of this mess out. Tell them to stop authorizing social welfare programs for individual industries. Write, call and write again.
on Sat, 08/29/2009 - 09:31
#52800
agree with you Ned. I've done same. My congressperson is a sponsor and he sits on Barney's committee.....downside is he is a freshman and a true Pelosi suckup.
on Fri, 08/28/2009 - 15:37
#52198
"Bank of America strategists wrote..."
I think they meant "wished" or "dreamt" ...
These are the same "strategists" that ran BOA into the ground... or did they find some new ones?
on Fri, 08/28/2009 - 15:39
#52199
Regardless of the accuracy of the call, you have to appreciate analysts who have the hubris to come out and say that even if, like Japan in the 90s, our real economy is nothing but a monumental, debt-driven, highly leveraged shitstorm, at least you can play it for some short-term market gains.
on Fri, 08/28/2009 - 15:39
#52200
This is a perfectly logical and sound analysis. What's my broker's number again?
on Fri, 08/28/2009 - 15:43
#52207
917-BEN-DOVR?
on Fri, 08/28/2009 - 15:47
#52218
Ah yes, there's the number, right there on the floor...let me reach down and pick it up.
on Fri, 08/28/2009 - 16:51
#52292
you did a funny..hahah
on Fri, 08/28/2009 - 15:39
#52201
and now that the comparison is available for public consumption, it will play out completely differently. The only thing you can count on is that the price will move left to right, but I'm sure the liquidity providers are working on solving that little dilemma as we speak.
on Fri, 08/28/2009 - 15:40
#52203
ZH finally bullish. Can only mean one thing.
on Fri, 08/28/2009 - 16:41
#52280
As Barney Frank would say:
"Thweet comment."
on Fri, 08/28/2009 - 21:22
#52583
Yep... the market finally heads down on Monday, now that every bear has morphed into a bull... thank god... its about time!
on Fri, 08/28/2009 - 15:40
#52204
That chart can't be accurate since the 2007 top took out the 2000 highs...that chart must be inflation adjusted which would invalidate the comparison.
on Fri, 08/28/2009 - 15:41
#52206
They forgot to mention that the whole rally is based on QE which is being setup for removal this fall. Bernanke should not fear a depression as much as a trashed dollar.
Who cares if your portfolio is back up to a million if it doesn't buy anything. He can't be that stupid.
on Fri, 08/28/2009 - 15:45
#52210
The GAME IS RIGGED---
If you arent one of Ben Bernanke's Insider's Club, GTFO!
on Fri, 08/28/2009 - 15:46
#52211
Damn, that is spooky. "It's like a copy of a copy of a copy."
on Fri, 08/28/2009 - 15:53
#52227
It really is spooky.
It would be really interesting to see how many other factors from the same 2 eras correlate.
on Fri, 08/28/2009 - 15:46
#52214
THE GAME IS RIGGED!!!!
If you aren't part of Ben's Crony Insider's Club or getting insider tips from GOVERNMENT SACHS, then GTFO!!
Starve the BEAST!
on Fri, 08/28/2009 - 16:33
#52274
Starve the beast indeed. Take you money and business away from the Stress Test 19.
on Sat, 08/29/2009 - 00:32
#52711
I don't think you understand the game. If you *are* getting tips from Goldman Sachs, get out. Goldman bankers treat their clients as adversaries, they would cut a man's throat to take a dollar from his pocket.
on Fri, 08/28/2009 - 15:47
#52217
Anyone care to comment on today's preposterous close?
on Fri, 08/28/2009 - 16:16
#52256
Last week of August, many on vacation, more on vacation thru Labor Day.
Next 10 days will be effectively meaningless, like a politicians promise, a lover's sigh, or Ted Kennedy's life.
on Fri, 08/28/2009 - 15:49
#52221
This graph seems wrong. The top of the SPX was in 2007 not in 2002. Is there someone who can replicate this diagram?
on Fri, 08/28/2009 - 16:56
#52301
This chart is wrong... here is the reproduced chart.
http://tinyurl.com/n6zshf
on Fri, 08/28/2009 - 15:49
#52222
Regarding the Methup Cometh: Consider the source of who wrote it before engaging in such hypotheticals, and trading upon it. Generally, analysts who pontificate and theorize, rarely trade their own money. If they did, there would be a lot more money for us to make and share.
on Fri, 08/28/2009 - 15:51
#52224
I FEEL LIKE A CHIMPANZEE, BUT THE AUTHORS ARE SAYING:
the S&P 500 will keep rising, partly because of gains in the dollar, the Hong Kong-based strategists said
EXCUSE ME, BUT THE LAST TIME I CHECKED THE DOLLAR WAS NOT RISING, AND EVERYBODY AND THEIR MOTHER WAS PREDICTING A DOLLAR SELL-OFF
SEEMS LIKE THE US DEFICIT HAS BEEN TOTALLY IGNORED IN THIS ANALYSIS
NEXT WEEK'S ANALYSIS TO READ: DOLLAR TO SELL-OFF AS DEFICIT BALLOONS AND EQUITIES TO STILL RALLY
MAN THESE ECONOMISTS CAN'T SEEM TO AGREE ON THE DOLLAR
on Fri, 08/28/2009 - 15:54
#52229
Market up will require a lot more QE. Don't see it.
on Fri, 08/28/2009 - 15:58
#52237
The S&P chart does not look kosher, is in in yen, inflation adjusted or what? The October 2007 high was above the 2000 peak by a little (on the chart it looks very different)...
on Fri, 08/28/2009 - 17:46
#52345
me thinks its the NDX rather than the SPX...
on Fri, 08/28/2009 - 17:50
#52347
the NDX did not take out the 2002 low
on Fri, 08/28/2009 - 16:04
#52239
hey snorkeler --
you asked for some more...how about this:
http://en.wikipedia.org/wiki/Economic_history_of_Japan
Start reading in the section titled "1990s to present" -- striking similarities, IMO.
Steve
on Fri, 08/28/2009 - 16:06
#52241
Expect the unexpected.
Ben will surprise everyone by raising rates .50 points to fund the deficit.
Stronger Dollar, higher purchasing power and better bond yields is what this economy needs and will get.
The propaganda about recovery and green shoots etc is aimed at defining the bottom for interest rates. A supposedly growing economy can afford better interest rates and higher taxation levels.
Days of cheap credit are over.
on Fri, 08/28/2009 - 16:15
#52255
Ben will surprise everyone by raising rates .50 points to fund the deficit.
How does raising the FED Funds rate fund the deficiet?
on Fri, 08/28/2009 - 16:23
#52264
I think he meant that bond yields will go higher and more attractive to buyers, thus funding the deficit.
Quantitative easing cannot go on forever and thus saying the economy is on solid footing allows us to ease off the throttle. BB really has no choice.
on Fri, 08/28/2009 - 16:44
#52282
The budget deficit that's covered through continued bond sales.
on Fri, 08/28/2009 - 18:48
#52412
Another, lesser, way it funds the deficit is by producing higher taxes from increased dividend income from fixed income investors. I realize that there is additional longer term costs by issuing at higher rates, but it least it starts to move the cycle in the proper direction. A Zero Interest Policy, while appearing to be stimulative, is actually a super strong deflationary black hole. Fixed income investors panic because their income gets decimated. What they do then, in addition to stupidly chasing yield far down the quality spectrum, is go into a spending bunker. Everyone stops spending because their incomes have been shut off. If you start letting people's savings provide them with more of a boost it could assist it returning things to normal.
on Fri, 08/28/2009 - 16:20
#52258
And how does a strong dollar, that only worsens the trade deficit, help our over-consumption problem?
on Fri, 08/28/2009 - 16:51
#52293
China needs American consumption of their goods.
If the Dollar slides further, US consumers will tighten their belts further. Purchasing power needs to be stabilized at some level. Lending is not the issue anymore.
A .50 increase will send a strong message and bring confidence back to the Dollar.
It's more important than a stock market on steroids.
Unless the propaganda changes from "recovery is around the corner" back to "standing at the abyss and facing collapse" there's no political will to fund more bailouts or rescue programs.
There's no risk of inflation imo.
Inflation preceded this economy which is why everything was completely off the charts and out of shape. Deflation is healthy and with a restored purchasing power and stable income levels, the economy will improve over time.
If the Dollar goes kaboom as some predict it might, then you will see armies of $8/hr workers rallying against Washington.
$8/hr at current price levels is slave labor. Can't reduce the purchasing power of that important segment of American culture any further. Cheap credit helped these people for a while but that train has left the station.
on Sat, 08/29/2009 - 06:07
#52764
Let me fasten the strap on my tin foil hat for a moment. And by the way, this is my favorite hat lately, because when I think this way the madness that is the stock market makes a lot more sense.
When Mack Daddy said in March that the stock market was "like an opinion poll", I think he stumbled on to something profound (profound for someone who aspires to destroy what is left of a free-market economy and replace it with a czar infested fascist system.) I think what he figured out is that a rising stock market puts to sleep a segment of the population that needs to be asleep for him to pass his most damaging legislation, the government takeover of the US Health Care system. Once that's done, everything else will roll his way in time. So he says to Ben "Kite the stock market." Ben says "You know... eventually I will have to save the dollar, and once I do the market will crash back down to earth." MD says "Just keep it up long enough for me to get the legislation done, which will be no later than the August recess."
Is this anymore tin hat thinking than believeing that Bernanke will crash the USD and send us in to Zimbabwe-like hyperinflation? He is (probably) not an idiot. A political tool, yes... but idiot? Probably not. He knows he has to do what you say above... eventually. He just gets to fuck with us for a little while before that.
on Sat, 08/29/2009 - 07:15
#52774
This makes alot of sense. A campaign to support the equities market and pronouncements of mission accomplished as far as the Great Recession is concerned end with a (largely symbolic) rate increase by $.50. Dollar rally follows, with a corresponding reduction in equity prices. Treasuries esp the 10 yr begin to drop as rates go to 4, 5% and the funding of the deficit becomes easier since yields are attractive. Where's the hitch in this?
on Fri, 08/28/2009 - 16:09
#52247
It looks to me that the analyst was not trying to match dates of the chart rather he was looking for a match in patterns regardless of the dates of the match. Why this has any bearing to anything beats me. If I were in charge at BofA the head count of analsysts would be down by two tonight. First the analyst would be fired and secondly I would fire myslef for permitting such "junk" to be printed. Obvioulsy, there is no need for either of us. In reality this is what corporate america is finding and in the discovery they are getting rid of people who cant function regardless.
on Fri, 08/28/2009 - 17:07
#52314
Look at the names of the analysts - I bet they're all fake. You have to say them out loud to see the joke. They do this a lot at bloomberg. Someone's got to make up the news. And I wouldn't put my name on it.
on Fri, 08/28/2009 - 16:09
#52248
Bloomberg article states chart is adjusted for currencies...
on Fri, 08/28/2009 - 16:11
#52250
ZH... could you please address the S&P500 chart? As others have pointed out, it doesn't look accurate at all.
on Fri, 08/28/2009 - 16:21
#52261
Nikkei companies are exporters, Japan ran a huge trade surplus in those years, while the rest of the world grew stronger. The savings rate was strong among the japanese and Japan was a creditor country
on Fri, 08/28/2009 - 17:41
#52340
Exactly; great points.
on Fri, 08/28/2009 - 16:21
#52262
This chart is ridiculous. Classic case of data fitting...let's take some line graphs, superimpose them over one another and move along the x-axis until some type of relationship is apparent. What a joke...
on Fri, 08/28/2009 - 16:23
#52265
I can imagine you guys are all Barney Frank fans. Prepare for cognitive dissonance...
http://rawstory.com/08/news/2009/08/28/rep-frank-house-will-pass-ron-pauls-audit-the-fed-bill-this-year/
on Fri, 08/28/2009 - 16:23
#52266
It's Nasdaq, and it does match
on Fri, 08/28/2009 - 16:33
#52273
Dear Bonesetter...the graph clearly states that it's showing the SP500...
on Fri, 08/28/2009 - 16:45
#52285
I'm saying it is a typo. That graph is the Nasdaq.
on Fri, 08/28/2009 - 16:45
#52286
I'm saying it is a typo. That graph is the Nasdaq.
on Fri, 08/28/2009 - 16:36
#52278
The comparison between indexes is based upon adjusting for currencies.
We can certainly count on the Fed keeping the interest rate low, not so sure about an organic recovery at this point (but the synthetic, QE-based recovery has created a nice spike), and whether the dollar remains devalued . . . well, that will depend upon news out of the September 22nd Federal Reserve meeting. If the Treasury portion of QE actually ends, then the dollar should go bullish. If they change their minds and decide to extend, well . . . don't fight it, ride it!
on Sat, 08/29/2009 - 16:35
#52824
Mainly due to dollar devaluation.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
on Fri, 08/28/2009 - 16:46
#52287
Japan rose in the late 90's because they had customers for their products in the rest of the world during the TeleCom/DotCom bubble. I don't much of a parallel this time around in the fundamentals as the US doesn't have anyone who can be a customer for their products who is experiencing their own asset bubble.
The comparison to Japan's Lost Decades is optimistic. The US and rest of world are having a mainly coordinated debt deflation demand destruction situation.
The only possible exceptions will be in some of Latin America, Africa and SE Asia where they already had their debt blow ups and civil wars in recent decades/generations, so they don't have similar crippling levels of debts. On the other hand, their foreign markets are evaporating, so they will have to become self-reliant and/or regionally integrated, and then possibly be a market for rich nation's goods.
And even this addition to global aggregate demand would be small because wages in the Global South are kept low through the internal and international race to the bottom pitting workers and peasants against one another.
so i highly doubt there will be much further rallying to the S&P and expect it to skip through this melt up and continue the inexorable deflation of asset values down to long term trendlines of PE ratio with an extra ugly corrective of overshoot past the trendline so that Reversion to the Mean is accomplished over the longer term. Ie SP500 PE ratio based even on the gamed "operating earnings" has to fall down to 5 to 7 from the current level of 24.
SP500 = 2000 by 2012
on Fri, 08/28/2009 - 21:06
#52562
You raise some good points. During the past 20 years (and more, really) Japan has been a producing nation and a nation of savers. They run surpluses by and large, not deficits. The US is largely the opposite -- consuming, saving little, and running constant (and now astronomical) deficits. Yes, this is painting the picture with a big brush, but it is a generally accurate portrayal. It is not difficult to see the path the US has taken, both in the public and private sectors, is unsustainable, regardless of what similarities certain charts may have. The US indebtedness is a millstone around its neck that Japan really never had.
on Fri, 08/28/2009 - 16:58
#52303
Also, Japan was most likely able to feed off the massive tech bubble and beginnings of a real estate bubble in 97, 98. What are we able to feed off now?
on Fri, 08/28/2009 - 18:38
#52401
Soilet Green.
on Fri, 08/28/2009 - 16:58
#52304
Do we die from inflation or deflation? Dat is da question.
on Fri, 08/28/2009 - 20:10
#52499
Does it matter when you're dead?
on Fri, 08/28/2009 - 17:12
#52305
Tyler;
The Bloomberg chart of the SPX from 1990 to present day versus the Nikkei225 from 1980 to present doesn't make sense or at least is very different that my charts. The 2007 SPX peak was higher than the 2000 peak which is not shown on the Bloomberg chart (which shows the 2007 peak to be substantially lower than the 2000 high).
If Bloomberg has done a currency or other adjustment to get the desired result, don't think it is valid unless both markets are priced in the same unit like say... gold. But if you do that, the correlation between the two drops substantially as to make them not really comparable at all...
Am I missing something?
on Fri, 08/28/2009 - 18:37
#52400
Justice?
on Fri, 08/28/2009 - 17:02
#52311
That's right. The chart has been adjusted to reflect the difference in currencies, the phases of the moon, and to the different points of pressure applied to the pencil while drawing the lines.
on Fri, 08/28/2009 - 17:02
#52312
Homer's investment advice:
Mmmmmmm..........forty percent melt up........mmmmore cheeeeese.......buy.........more.
Six months later:
D'oh!!!
on Fri, 08/28/2009 - 17:51
#52349
LOL+
on Fri, 08/28/2009 - 17:08
#52315
I pointed this out on the liquidity bubble article, but,
The Zimbabwe stock market skyrocketed in 2007, with acceleration starting in 2005-2006.
on Fri, 08/28/2009 - 17:17
#52322
Funny./not
America is not Zimbabwe.
Zimbabwe never had, never will have a "world reserve currency" and a large arsenal of nukes.
on Fri, 08/28/2009 - 17:09
#52316
Maybe I've been watching the wrong DOW and the wrong S&P and the wrong dollar, but the one's I've been watching seem to show me that every time the dollar goes up...the market goes down...and vice versa. So, needless to say, when I read comments like this "the S&P 500 will keep rising, partly because of gains in the dollar, the Hong Kong-based strategists said." from the so called experts, I'm led to believe that either:
a) I'm watching the wrong Dollar, DOW and S&P
or
b) This so called expert is utterly full of shit.
Only time will tell I guess...
on Fri, 08/28/2009 - 17:34
#52334
Long Kool-Aid Sep calls
on Fri, 08/28/2009 - 17:35
#52336
No correlation at all. Tyler is fishing on this one. This might be the top now that Tyler has capitulated......
on Fri, 08/28/2009 - 18:19
#52379
I was thinking that myself - but we'll first need to see the sequel to this article
on Fri, 08/28/2009 - 18:35
#52397
LOL! I just noticed your avatar!!! That totally rocks, I mean... raps...
on Fri, 08/28/2009 - 18:00
#52358
FYI: the chart is accurate. Look at the % delta.
on Fri, 08/28/2009 - 18:20
#52381
It's like giving a machine gun to a monkey .....
on Fri, 08/28/2009 - 18:44
#52407
If the chart has been adjusted for currencies, have they also accounted for inflation I wonder? I'm guessing this last up move WAS the final 40%, since I don't see taking the dollar to 60 is much of an option, but what do I know, I wear Affliction t-shirts... Anyway I can't find the original article on bloomberg, anyone got a link?
on Fri, 08/28/2009 - 18:57
#52428
>>another 40% run up in stocks
The first 40% runup is bot even visible in the chart. Something is seriously wrong with the stated definition of what this chart is.
I agree with all the commenters who think the author had better define EXACTLY what this is supposed to be a chart of.
on Fri, 08/28/2009 - 19:16
#52446
This chart comparing US to Japan is invalid in that US has a lot more debt, both private and public sectors.
on Fri, 08/28/2009 - 20:04
#52485
That chart does make some perfect sense. Think about. America is the number one economy, Japan is the number 2. Japan has been parked for years. Drained of money and put into mild perma recession. Do that to america and you've parked 1/3 the economic activity on the planet. The same thing has to be being done in europe. Just becasue everyone is talking and yacking about quantative easing doesn't mean it's happening. All we are seeing is huge bonds. A bond is a IOU a promise to pay it serves the banks. A bill (currency) is a debt instrument it serves the people. Talking about huge stimulus and talking about quantatitve easing doesn't mean it's happening as we think it is. America is getting drained of money there's little economic activity. The bank bailout is bullcrap. They are freaking banks. They can get money electronically created and loan it out 10 times to fix thier balance sheet. DOING that stimulates the economy which is why they are taking it from the taxation side. The bailouts are in fact draining the economy. Quantatitive easing is just being quantatative it's not easing. It's piling up huge debts and then ratioing the currency out to match it. Which is why the currency markets seem to keep pegging out against each other.
The world is getting encased in concrete and anything that moves won't happen unless it comes straight out of the central banks. It'll decide who is flushed with cash and who isn't.
on Fri, 08/28/2009 - 20:16
#52511
Well said. That cuts right to heart of the matter. Look at tax reciepts, there is no stimulus. Look at retail sales number, there is no stimulus.
The world is a Banana Republic; the Puppet in Chief decides who gets all the bananas (hint: it's not you).
on Fri, 08/28/2009 - 22:07
#52623
All the debt to pay off debt bonding is rediculous. They should fire up a printing press and get thier squid on. Sometimes you just gotta ink a bitch. Just replace all those promises to pay with payment.
on Fri, 08/28/2009 - 20:08
#52494
So now analysts are saying dollar strengthen = equities rally? I thought it has been dollar weakness = equities rally until now? So heads ->equities rally, tail-> equities rally then? Sounds good we can make money right?
So low interest rates by Mr bean, somehow the US$ will rally? Then what happens when Mr bean raise interest rates? US$ rallies again?
Common, what is the combined age of these BAC analysts in Hong Kong? Shouldn't they be spending some time watching the Shanghai index instead of calling up-melting in US? Or maybe they are making a last desperate pitch, like Andy Xie mentioned in his latest piece, these"experts" want to talk up the market to stall the inevitable plunge coming your way in Shanghai (and then the world) in the fourth quarter?
on Fri, 08/28/2009 - 20:25
#52522
dough cass will look like an ass then
generational bottom call earned respect, lose it all on the recent short
on Fri, 08/28/2009 - 20:33
#52529
Even an amateur statistician in high school can tell you what's wrong with the chart - the 30 years of Nikkei data is squeezed into a 20 year time frame to "chart-fit" the S&P curve. That has the effect of removing 30% of "undesirable" data that doesn't illustrate the authors' story. For example, prior to the current rough from which they predict a 40% upmelting, the Nikkei showed 4 peak-to-troughs movements of between 30% to 50%. The authors conveniently ignored these Nikkei moves. Sell-side research has descended to levels of shockingly crude "curve-fitting".
on Fri, 08/28/2009 - 21:15
#52576
I thought the market worked on fibionacci sequences. Ya in a time compression viewpoint this would only be valid if it were a 34 year chart squeezed into a 21 year chart.
on Fri, 08/28/2009 - 22:51
#52664
Please. This is America. We do shit bigger and faster than some island full of short people. We pummel the markets 10 years faster. We do it hardcore.
on Fri, 08/28/2009 - 21:28
#52588
and here is the link to the origninal Bloomberg story and graphic
S&P 500 May Surge 40% in Duplication of Japan: Chart of the Day
http://www.bloomberg.com/apps/news?pid=20601109&sid=aKzgH4hvhh.g
on Sat, 08/29/2009 - 05:49
#52762
Look,
I don't care about any of this crap. All I want to know is; How do effectively bankrupt myself and get to keep all my stuff? Seriously... I'm tired of playing by the rules my whole life and ending up the 'chump'.
on Sat, 08/29/2009 - 17:22
#52976
First intelligent comment/question I've seen on this blog - though some are pretty amusing.
Watching everyone from the politicians and bankers to the financiers and "common people" run around like chickens with their heads cut off at an absolutely typical and predictable credit contraction is like being on a riverboat and watching the penny-ante players argue over which of the big time gamblers are cheating and how, while you notice the water on the floor from the giant hole in the hull of the boat and go get in your lifeboat.
on Sat, 08/29/2009 - 09:15
#52795
That timescaling is all Eff'ed up. A comparable point on that chart after a dramatic crash(ours just happened in 2008-a year ago) is the first or second rebound spike in 1990. We would have to go much lower before retracing that much on the correct timescale. Anyone can overlay 2 different timescale charts. A comparable timescale to the Nikkei chart he shows is a "recovery" in 2017 or 2018-it's %^*^$&%& 9 years from now.
People just don't get that the timescale for these events are long and you forget where you are in a bigger cycle. The Nikkei in that chart is in a secular bear market for 20+ years but 9 years after the 1989 meltdown it looks like a bull market that will run forever.
The result may be correct but the chart technical is compressed and expanded to fit a theory.
on Sat, 08/29/2009 - 09:31
#52799
If that is Bloomberg's " CHART OF THE DAY" i would hate to see the technical crap that didn't make the cut. That truly is an absurdly pointless POS.
My 7 year old Niece can draw a more relevant technical chart with crayons , glue and glitter.
on Sat, 08/29/2009 - 16:20
#52818
From time posted to when it hits the airwaves, this needs to be documented.
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
on Sat, 08/29/2009 - 09:50
#52825
new charts from dShort
20 year comparison
http://dshort.com/charts/mega-bear-2000-comparisons.html?mega-bear-2000-...
10 year
http://dshort.com/charts/mega-bear-2000-comparisons.html?mega-bear-2000
on Sat, 08/29/2009 - 11:20
#52853
A collapse in demand will keep this S & P meltup from occurring. We're a shambles society compared to Japan. Their population is much more regimented by government design. They could afford a meltup because their demographics looked much better than ours.
The way it's different this time is, you're going to see a much more rapid collapse in demand, leading to a much more rapid collapse in prices. A horrible back to school plus a horrific Christmas will show the extent of demand collapse.
on Sat, 08/29/2009 - 17:53
#52999
it’s the kind of thing which really reinforces one’s belief in the wonders of data-fitting
http://blogs.reuters.com/felix-salmon/2009/08/29/silly-chart-of-the-day-data-fitting-edition/
on Sat, 08/29/2009 - 20:59
#53125
Not to be insensitive to the many of you out there downing the chart, BUT, go to BBerg and look at the chart and think it out.
I agree they did a bit of a cock-up in that the times are 1980=nikkei and 1990=s/p. The left axis is % and it is adj for currencies.
If this is 'true' and I have seen the comp. before the situation is not at all pretty.
on Sun, 08/30/2009 - 01:00
#53214
That's about as stupid a chart as I've ever seen. Period.
on Sun, 08/30/2009 - 15:47
#53441
The thing most economists choose to ignore is that there was a depression lasting from 1920 - 1921. Why was it so very short? It's simple. Neither the government nor the Federal Reserve intervened. Banks were not bailed out with public money. Thus, the nation's resources were not squandered for a select few.
This brings me to the inevitable conclusion, which is that there will be no economic recovery until the giant failed banks are allowed to go bust. It is simply criminal to bail out banks that took excessive risks.
Equally important is the idea of ending fractional reserve banking. No U.S. bank should be allowed to loan out more money than it has on hand. They cannot create excess credit if they must have a proportional amount of cash reserves. This brings me to the boom-bust cycle. Banks cause phony booms time and time again by issuing excess credit. They then cause subsequent busts by suddenly calling in the markers from the excessive loans.
But there's a big challenge. How do you explain to the average uneducated American that systemic collapse is necessary -- even vital -- for a return to economic growth?