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Rosie: "Why This Is Not The Onset Of A New Secular Bull Market"
Rosenberg (sourcing Katana Capital) on all you need to do to compare the current market to August 1982.
From David Rosenberg of Gluskin+Sheff.
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...because it's the onset of a philosophical bull market?
:)
-MobBarley
The only one that really matters is the sentiment...88% bullish?
get me outta here
The market for philosophical bull is always oversupplied. ;)
Your missing one thing on the table which is monetary base to S&P market capitalization which is higher than it was in 1982 and stable to rising. Since banks are not lending, and there is no Glass-Stegal, there is no inflation in the real world and the excess liquidity is creating paper asset inflation. So things have changed in the last few years how?
Exactly, this has everything to do with cheap money to banks having no place to go but into assets. Why do you think volume is so low? It's just the Algos playing!
The chart above is irrelevant as long as the market is rigged to go one way.
So very true. The market is not a market it is a tool by the PTB to try and generate opinion.
OT: Interesting trading in double long/short gold ETFs today. Calamity to follow?
By the time calamity ensues, I will be too exhausted to recognize it.
Me too...
ok, can we focus on the insane rate volatility today, or DXY/EUR punching around like crazy, or crazy on-going move in oil....?
USO, UNG, DGP & DZZ all going apeshit.
Probably whipsawing by the usual suspects.
Tue: All is well
Wed: The sky is falling
This is so 2009...
oil disconnect being the most interesting
Excellent, excellent table of data. The investor sentiment comparison is a real eye popper.....along with the trailing P-Es. Kudos to Rosenberg for putting it neatly together.
Facts are stubborn things.
Somewhere our village idiot is having brain seizures trying to dispute this comparison.
Leo, I'll make it easy for you. The markets weren't utterly rigged in 1982; the PTB were not ever as desparate as they are now; extend and pretend is a strategy they are all in with; liquidity, liquidity, liquidity.
What could possibly go wrong, eh, Leo?
Haha. +1,000. I like when people rip on
Zerohedge's most arrogant poster.
facts are facts and Leo's calls have left poor old Rosie in the dust
LOL, read my outlook 2010, come back to me in a year and tell me what an idiot I am. And next time post your reply in the appropriate place. My comment is below!
Leo figured if he couldn't get anybody to interview him, he'd interview himself.
Green Sharts,
CNN quoted me November (updated in in December) and the Columbus Dispatch recently quoted me in an article on taxpayers asked to cover rising pension costs for government employees. I do not need fame or fortune. My calls are all transparent, and I stand by them. I don't suffer from penis or pension envy (lol).
Dude, it's just that sometimes people like to hear opinions other than yours.
To quote Run DMC: "You talk too much...you never shut up...I said you talk too much...homeboy, you never shut up."
Wait, let me guess, you'll respond with a rap about solar stocks?
Leo,
Imo, your record speaks for itself. Despite a horrendous economy, you've consistently called for a rising stock market and been proven correct. The reason, be it institutions such as pensions being left behind or Wall Street firms pinning it higher or something else, is irrelevant. The simple fact is that bear market rallies happen. Heck, just look at Japan. Multiple rallies over a twenty-year bear. Perhaps where readers here are confused is that you call of a higher stock market runs contrary to you views on the economy overall. This rally, as with many bear rallies, is proof positive that the market can head in the opposite direction of the economy.
Given your opinions over the last year, I will definitely be listening if and when you think the market is going to turn. As for me, I don't see much value at these levels. A few stocks here and there, but that's about it. All that means, though, is that I'm not personally buying at this point. Sure doesn't mean the market is about to drop.
play it again Dave
Excerpts From his Nov 16 note:
http://www.tradersnarrative.com/why-this-isnt-a-secular-bull-market-3242...
and from his Sept 21 note:
http://www.investmentpostcards.com/2009/09/22/david-rosenberg-equity-mar...
"Inflation = 0% and rising"? Since when is Rosie onboard the inflation bandwagon? He is the debt deflationist king....
+1
the chart is Katana Capital - not Rosie.
no kidding, keep in mind this is the same guy that said the S&P is now a lagging indicator to make up for him being 100% wrong on its direction since march
Rosenberg said since March and consistently through the summer that he thought the SPX could go to 1200.
that.is.a.fact.
It is simply fraudulent to compare August 1982 with January 2010.
If he were interested in actually finding out the truth (which may very well be the same as his conclusion), he would be comparing August 1982 with March 2009 or May 1983 with January 2010.
I am not sure I agree that 82 is a good comparison. Right now we have banks and hedge funds, backstopped by the government, with tons of money to invest somewhere. Until the market takes a nosedive later this year and punishes those using the most leverage there is no reason why the market won't go up. It goes up because it goes up, as 99% of my trader friends say.
It's not that simple, and Rosie's data are spot-on.
The most important statistic is missing:
1980 census: 83% white, 12% black, less than 3% mexican
2008 projected: 68% white, 12% black, 15% mexican
The more the U.S. becomes filled with Mexicans, the more it will become a third world country like Mexico. There's nothing magical about the United States; people don't transform when they cross the border.
Reductio,
What a moronic and racist statement. The majority of immigrants, not just Mexicans, come to the US, work hard under deplorable conditions and all you can do is fall under that jingoist trap of using them as a scapegoat? Racist morons like you are what is really plaguing the USA...shame on you!
+1
I was going to say 'Latinos' is more accurate but 'immigrants' is better.
The problem lies within the upper-echelon of society, not the lower.
no, the majority does not work under deplorable
conditions.....it's one of those myths which
makes the affluent (white) feel good about themselves
so that they don't have to address illegal
immigration...
furthermore, no self respecting middle class
or affluent mexican would come to the usa....so
if the argument is that the usa needs a better
educated work force then why such indulgence
of this illegal immigration?
the reason of course is cheap labor for the
affluent. ask zoe baird and a host of other
limousine liberals.
How'd all those whites turn into Mexicans?
lol
there is either a secret government biological program turning white people into mexicans..or for every mexican that enters into the usa...a white person leaves. so the real question is..What country are all the white people moving to???
IDAHO
LOL...lotsa latinos here too
please don't be fucktarded. the racial
composition of the usa is changing rapidly and
that is by design. whites will be around 50%
by 2020-30...
falling birth rates plus massive immigration
both legal and illegal sponsored zealously by
the state dept have caused the re-composition...
Intersting, but not important unless you explain why 12% more mexicans are 78% more bullish.
It's those damn happy mexicans...
Don't worry, in a few more short months it'll be Spring and green shoots all over again!
I am Chumbawamba.
The Rosenberg secret decoder says long SPX
Rosenberg's right, and has been all along, with the economic analysis. I'm just not sure anymore that it's got anything to do with the stock market. What I'm afraid the more sophisticated market players know is that they can influence the government through fear tactics, and the populace will stand idly by while they do it, to appropriate tax funds from the populace and distribute it to shareholders through forcing or "incentivizing" the purchase of corporate output, witness cash for clunkers and the housing tax credit. So the stock market is no longer a way to measure productivity and allocate capital within society, the shares are no longer shares of economic surplus generating organizations, they are instead shares in the government's making of thinly disguised transfers of wealth at the point of the tax man's gun from taxpayers to those rich enough to hire lobbyists who know exactly which bureaucrats and legislators like exactly which favor, sexual or otherwise, and can deliver those favors.
Another juicy piece of data would be the comparison of government payrolls versus total nonfarm payrolls from '82 to '09.
I'm suspicious that the taxpayer supported payrolls of every stripe have gone galactic when compared to the private sector totals these past 25+ years.
Rainman,
I suspect you are smelling smoke where there is fire.
Gov't payrolls: second chart gives a clue.
http://pajamasmedia.com/instapundit/91169/
A few key statistics missing from Rosie's analysis:
1) FIRE sector as a % of GDP - then and now
2) Hedge fund assets as a % of total market cap - then and now
3) Private equity assets as a % of total market cap - then and now
4) Sovereign wealth fund and total pension assets - then and now
A comparitive analysis that does take into account these structural factors driving liquidity flows is totally useless, IMHO. This ain't 1982, not even close.
Don't these factors all refer back to the variation in leverage in 1982 vs. now? The ability to use leverage to raise asset prices didn't stop the market from crashing last year, once the realization that the productive base of assets wouldn't support the cash flows implied by valuations. I think Rosie's analysis is more about the assets in the real economy and their ability to generate sufficient cash flow to support valuations, as well as the household sector's ability to take on incremental debt to support consumption to generate those cash flows in the productive sectors.
No, you are partly right. More leverage leads to wilder swings in financial markets, both on the downside and upside. But pension flows and sovereign wealth fund flows tend me be more stable, and they are not just about leverage. Look, longer-term, we could have a wishy washy stock market, but there will be plenty of speculative pockets in the meantime.
More leverage leads to wilder swings in financial markets, both on the downside and upside.
I agree that this is what will result (and has resulted). I actually only trade technicals, and I can see us in a range between 1200 and 700 for the next 5 years, as bubbles inflate and deflate. Eventually, the public will tire of this, reforms will come and more resources will be dedicated to the non-financial segments of the economy, setting the stage for real, not paper, prosperity. In a best case scenario, of course.
the public is not engaged in any of this and
will be found in the middle of times square picking
their noses....
the re-emergence of the non-fire economy is not
the consequence of someone growing tired of bubbles
or some nebulous conception of "reform."
Jeez Louise, Leo, so your bullishness
rests on hedge funds, private equity
and sovereign wealth funds being stupid
and myopic? LOL
Laugh if you want, but I think there's historical basis for making that assumption.
Leo, it doesn't matter how fast and who drives the liquidity if the government is eventually going to have to step in and soak it up in tax or default. Cos thats whats going to happen. How you slice and dice the assets among participants in that shit storm is irrelevant.
Agreed, and I am not a permabull or permabear. I call it like I see it, and I happen to think the big surprise in the second half of 2010 will be rate increases. But don't let that scare you away from equities (buy all dips!), especially not in the bubble sectors, as it took three or four rate increases before the tech bubble imploded. Anyways, I've stated my points, I see the world differently from most traditional economists, and that is that. My experience allocating to top hedge fund managers has shaped my thoughts, which is why I focus on what the top funds are buying and selling. At the end of the day, people can ignore me, but I stand by my calls and put my hard earned money where my mouth is. Do all these famous strategists tell you where they invest their own money?????
Leo, if you're so transparent and clairvoyant, let's see any documented proof prior to fall '07, of you recommending or calling for a market crash. Or how about just a piece by you in '08 calling for huge drop?
"...but it goes to 11".
California Tries to Ban GO 2 11 License Plate
The Sacramento Bee reports that the California DMV is attempting to recall the vanity license plate GO 2 11 that attorney Keith Wagner has on his car, after the agency received a complaint that the message can be read as "Go to hell." Here's coverage from the local CBS affiliate. And here is the spirited response by Wagner.
Someone's taking a big toke off of the old Reagan-bong if they actually believe defecit-to-GDP was heading to a surplus in '82....
Living in the moment might be the wisest course.
Even two apples are not the same:)
It is not racist to show cultural shifts in a population.
Oh.....different cultures behave differently?
40muleteam borax
Seriously though, you all bears here. Why can't the market go to 1500 if earnings improve?
2007 SP had a lot of companies that were destined to fail, many were removed and better companies added. Many SP companies have huge sales overseas and even if US will go to hell there are still amazing sales even if you discount US operations. If US dollar will continue what it has been doing for the last 40 years, earnings will continue to look better and better and better.
with enough money creation the market could go
to 1500 if earnings deteriorate which was much
the story of 2009....
rosenberg's thesis is that earnings are currently
over-valued because of historical comparisons
and because prospects for 2010 do not seem
bright enough to take the sp500 back to its
historical mean. thus there is a bubble in
p/e valuations.
not sure that overseas prospects are much
better than in the usa....
FWIW:
If the median age of the Boomers in 1982 was 25 (and 52 in 2009), then the Boomers can hardly be credited/blamed for the summer of '68 and all that followed through the early '70s, as they would be barely into their teen years.
Abbie Hoffman, Jerry Rubin, Tom Hayden, et al., were all born in the late 1930s--hardly Boomers--but Boomers get tagged with the stink of the late '60s/early '70s, and all the moral depradations that followed.
I know it's impossible to correct these narrative fictions the preening media spouts...just sayin' is all...
Did someone say TOKE
I had the weirdest thing happen the other day. I was was a POS Columbia gold explorer that I made a few hundred bucks on playing the MACD and I sold 3K shares.
Not a minute later the frigging thing dropped 21% on reasonably big volume. That has confirmed for me that
1. I'm a friggin genius
2. The HFT gang are watching my trade and the algo's are driving the sell.
3. The HFT gang is watching my Ip address.
4. The HFT gang is watching me through my webcam.
Can I get a tally of your opinions on the right answer?
Sec I'm gonna light up first cause I'm freaked man
That quiz screwed me up too ZH
Did someone say TOKE
I had the weirdest thing happen the other day. I was selling a POS Columbia gold explorer that I made a few hundred bucks on playing the MACD and I sold 3K shares.
Not a minute later the frigging thing dropped 21% on reasonably big volume. That has confirmed for me that
1. I'm a friggin genius
2. The HFT gang are watching my trade and the algo's are driving the sell.
3. The HFT gang is watching my Ip address.
4. The HFT gang is watching me through my webcam.
Can I get a tally of your opinions on the right answer?
Sec I'm gonna light up first cause I'm freaked man
That quiz screwed me up too ZH
I use technical analysis and more analysts should study share price trends in my opinion.
Technical analysis can assist us as to the direction of the economy as it is a leading indicator.
In early 2007 I warned of an impending stockmarket crash.
I confirmed a bottom by April 2009.
In mid 2009 I warned of an impending USD rally.
The uptrend since March 2009 has been a bear market rally contained within a much larger bear cycle that started in 2000.
http://www.zerohedge.com/forum/market-outlook-0