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Saluzzi Warns "Price Does Not Equal Value, And Everyone Is Chasing Price: This Is What Happened In Every Past Bubble"
Joe Saluzzi of Themis Trading shares another set of valuable market insights, and suggests what everyone knows but is unwilling to act on, for fear of taking the US Central Bank head on: that the entire market is now just another bubble. In brief - "markets are not efficient" and investor psychology, sentiment and technicals are the only thing that matters. Saluzzi explains why he is most worried about unemployment, housing and the rising debt. He is not the only one. Joe concludes with a jab at all overoptimistic hollow teleprompter repeaters, better known as CNBC anchors: "You can't tell me everything is getting better when I point to all these negatives and all these problems that still exist and they haven't been addressed yet."
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My investment advisor (CNBC) just put me on dow 14k watch.
That is funny.
AKA dollar zero alert
Why do I need a calculator
Doh!
Got those trailing stops at the ready:
http://www.jubileeprosperity.com/
My investment advisor just put me on dow 6000 watch ... 1929 comes to mainstream ... read
http://finance.yahoo.com/news/1929-And-Today-Sobering-etfguide-210113194...
Excellent article!
Jerome ... They took down the post in four hours time ... does this happen often? or was this too much for mainstream!!
The article started:
1929 And Today - Sobering Parallels Abound
Yahoo News ^ | 10-15-2009 | Simon Maierhofer
Posted on Thu Oct 15 08:17:16 2009 by blam
1929 And Today - Sobering Parallels Abound
By Simon Maierhofer
On 1:14 pm EDT, Thursday October 15, 2009
When was the last time you saw stocks decline 54% followed by a 55% rally?
When was the last time you saw stocks (NYSEArca: VTI - News), bonds (NYSEArca:
AGG) and commodities (NYSEArca: DBC - News) move in sync for nearly two years?
When was the last time asset allocation did not really provide the diversification and protection it was supposed to?
When was the last time, a ten year investment in the stock market delivered negative returns?
Investors that care to harken back 80 years will find that the 1929 - 1932 era is the only period of time that compares to today. In fact, the parallels between now and then are bountiful and scary.
that guys been posting bearish articles for the last 3 months. There's no conspiracy there. I saw that same article last week.
Found complete article:
http://www.etfguide.com/research/222/8/Allow-Me-to-Introduce:-The-Bigges...
Yeah, Maierhofer updated the article slightly (the Dow 10,000 line) in today's edition but, I saw that article posted on Traders-Talk over the weekend.
I'm sure when the drop in 1929 snapped back during 1930, everyone thought it was safe to get back in the water then as well. That's what those snap backs are supposed to do, bring the rubes back into the casino. It happened with the 2000 snap back after the initial free fall then as well.
eah, Maierhofer updated the article slightly (the Dow 10,000 line) in today's edition but, I saw that article posted on Traders-Talk over the weekend.
I'm sure when the drop in 1929 snapped back during 1930, everyone thought it was safe to get back in the water then as well. That's what those snap backs are supposed to do, bring the rubes back into the casino. It happened with the 2000 snap back after the initial free fall then as well.
You don't buy the past.
Saluzzi is wrong. What happens in every bubble is free Fed money.
This bubble will end when the free money ends, not before.
Next Thursday? Last POMO punch.
Yeah, last POMO vis-a-vis QE v1.0.
Saluzzi is right...and you know it Ghost. QE started after Bear and bailouts started with Hank on his knees in front of that moron Pelosi. The market still tanked 6 more months. Bear market rallies are a normal phenomena. Free money will not stop the bear from emerging again--it's silly to even think that. Check out the January 2011 options put action in JPM over the last several days with strikes ranging from 20-50. Over 15000 yesterday. That's significant for 15 months out.
glad to see you back Howard.
i still remember that picture of paulson with pelosi.
Check out the January 2011 options put action in JPM over the last several days with strikes ranging from 20-50. Over 15000 yesterday. That's significant for 15 months out.
I appreciate your input on options action and I'm confident others here do as well. Thanks.
People born in the 70s, 80s really haven't experienced mr. bear let alone have read detailed info on bear markets.
Glad you are still here DH...always appreciate your thoughts.
Missed your voice Howard
Keep banging your head against the liquidity wall, if you want.
QE didn't really start until November 2008, and only in earnest on March 18th.
January 2011? Might be pretty good timing, the Fed might be done buying MBS by then. Sounds a bit early to me, I expect Mar-June 2011, but whenever it stops, time to go short like a motherf*cker.
Another 16B this week, on a slow MBS week.
http://www.ny.frb.org/markets/mbs/
Welcome Back. Thought about you in your absence. Glad to see you post. Hope your medical stuff is squared away, or at least that you are on a solid trajectory for recovery.
glad to see you back with the ZH troops mang ....
Thanks to you and Mscreant...hanging in there and alive and almost well. Time will tell.
i have no doubt in my mind that you will manage to go trough it and that all will be good, just hang in there ...
Just another purveyor of sour grapes looking for media attention.
He is right of course...but since when has that mattered?
Sadly you are correct. Being right and 50 cents will get you a phone call at one of the last phone booths. The Fed is appealing to that most base of emotions.
Greed!
Works every time until it doesn't. But they aren't trying to fix this problem as much as they are kicking the can down the highway and hoping time heals all hearts.
Or until they can blame someone or something else for their failure.
You must see Art Cashin's clip from today.
2 things really stand out.
it was either art or the guest host (ken) who made a comment about all the talk hyping up the market and joe kernan stops everybody and says something to the effect of "what are you guys talking about, who the heck is talking up the market". it was classic.
second item is watching art bite his tongue continually harder everyday the market hypes up as joe saluzzi discusses and we all know. you can tell that art is very frustrated by this and it's hysterical to watch. you just know art wants to blurt out something to the effect of what saluzzi is watching. the clip is on cnbc and definitely worth the watch.
edit... clip http://www.cnbc.com/id/33326855 the part with kernan is near the end @ 3:30...he appears very defensive i.e. "who's talking it up" cashin thinks fast and says "the government"....it's a beauty
Joe Kernen is a giant turd.
Art is too classy of a guy to slam a douche like Joe.
If Art isn't careful he will have an aneurysm or stroke right on camera. The old hands know what is going on and it is indeed driving them and us bonkers.
Poor Art, one of the few adults left in the sand box, trying to inject a little humor and wisdom where it's clearly no longer wanted.
I remember one year ago when people hung on every word Art had to say about how to survive a market crash. Now they treat him like senile old uncle Art.
Art sees the freight train coming. You can see it in his eyes. Get off the tracks or get cut in half.
Art is a voice of reason, as was Ratigan. I'm amazed Cashin still gets airtime although I appreciate it when he does because he is a treasure. He used to get all the respect he deserves and now he is a loony tune since the Haines Butt. Kernan used to be sane too (circa 1995), but those GE stock options must have lobotamized him.
I'm amazed Cashin still gets airtime
I would bet several devalued buckys that cnbc's internals show that Art is the one feature that people will purposely tune in for. I'll bet his clips on their site are the number one click.
I wish he would write a book...aaah, the stories he could tell....
I bet he has as his gift to the nation and royalties for his grandkids and great grandkids. That kind of guy.
I am Miles Kendig and if I can do it anyone can.
Bloomberg might be worse than CNBC. That airhead blond was too ugly to get elected cheerleader so she got on the show. I wonder if a guy like Saluzzi could actually tell the truth and stay on the air. Shilling is next. Shilling said he expected good deflation. We had good deflation in the 1990's while we were bubbling the DJIA and moving rates down. Then it consumed the equity out of real estate. The stock market is all air and many knew it. People were buying apartments and commercial real estate using 4% cap rates. That means they were paying at least 100% too much. The Fed and the government are making it worse because to admit the truth means most of the crony capitalists would be broke.
I wonder if I can adjust my medicinal marijuana business to give product discounts if customers purchase in gold? Save me alot of exchange costs.
There is no law that says you can't as far as I know. I am willing to wager you would do more in silver then swap it for gold as needed.
Am I right on that GG?
Whether its legal or not it's unlikely feasible. My business has been highly profitable primarily because I am a direct grow to retail vendor. It's also provides the greatest degree of complience to the law as I am afforded. I doubt my primarily 50-200 dollar customers have access to the type of gold I want and I don't sell bulk to other vendors, only trade. I do want to find the best possible way to convert cash (100%) to gold without drawing attention, especially on the Federal level. I pay all applicable taxes, 0 skim, 12 employees, organic, non-toxic and would love to be an accepted part of the California economy. plus, the only leverage i have is the weight of nutrient sacks when i gotta lift them.
Ask GG or PM. I believe that transactions of less than 10K with Canadian banks need not be declared or reported to US authorities. Establish a Canadian account as a currency hedge and convert to physical holdings as appropriate. Canadian banks ship. Again, consider transactions in silver, coins especially then convert. Easily done.
BTW, as a chronic pain 100% disabled veteran with CNS problems I truly miss my City of Oakland card here in TN and look forward to the day I can be a customer...
Much like in the US, Canadian banks are required to file a report if you deposit/withdraw >=10K in cash within 24 hours (resets every time after that) BUT, the teller again has his own discretion if he sees you doing the same repeat transaction of $9k every few days. All that happens is they send a report to the RCMP who then follows up into this (if they can). If you have someone trustworthy at a bank however and they dont report your transactions, then the trail ends there.
Thanks to both the above posters. I shouldn't have to be that frequent a customer. I'm just tired of watching my expensive security system including including, camera's, security guards and very expensive safes gaurd cash increasingly becoming worthless. I have the disadvantage of being in a quasi-legal business and the fear that if i put my gains in a conservative investment bank(Northwestern ML for example) I am still in the hands of a roulette/corrupt system and increasingly exposed to a Federal system that would rather seize my wealth rather than tax it. However, although I know most of my buyers are recreational, I would exchange my business in a heartbeat if Medicinal Marijuana could be dispensed nationally to the people who need through big business and pharmacy's.
The fed is going to pump up what it can, the dollar excepted until either the nation breaks or private debt encumbrance match's or exceeds the pace of federal debt encumbrance. After all, it matters not who drives the debt as long as there is a driver to ever increased levels of debt and "assets", especially future income streams that can handle ever increased levels of encumbrance.
What a pile of crap.
This is *considerably* worse than what happened in every other bubble. The *only* thing holding anything together right now is this bubble in equities. Savings are gone. Lending is dead. America's pension funds, municipal obligations, etc... *all* rest on this bubble.
And even though this bubble is all that stands between us and somewhere we *DON'T* want to be, like all bubbles.. this too must burst.
This woman is a fool and a not so attractive cheeleader for the tunnel vision optimists with no objective data to support their case ..... only hope...reminds me of the other "hope filled" disaster we got suckered into believing.
Saluzzi is a bright, reasonable, level headed person. He is also correct in his assessments as discussed.
DH - On the traditional ideas of value, underlying business top & bottom line fundamentals and economic sustainability, no question. Carrol Massar plays the part perfectly of demonstrating the psychology behind the fed liquidity driven tape bubble mentality of indexing after the fact reasoning. Sooner or later the market will meet the hard unforgiving wall of objective circumstances and its going to hurt. Ghost is most likely correct with the assessment that it will not happen until the fed turns off the spigot.
Our waders are over toping brother man.
well said indeed. fed still has upper hand, but the other players at the table know that his stack of chips ain't what it used to be. on that subject, i understand that we are just about dead on the 300b for treasuries, with half trillion to go on the funny mortgage paper; question i have is the agency paper being purchased from fanny or freddy or from pd's, other financials, etc. anybody? thanks.
edit...i believe some is being purchased from foreign cb's, please confirm. thanks
Blonde Bimbo: "Where do you think the market should be?"
Joe Saluzzi: "35 to 40 percent lower"
-------------------------
Agreed.
Saluzzi is wrong. The stimulus (and every other govt program) is working. Don't believe me? How about the AP (yeah, I know, AP = MSM)? Excerpt and link to full article below:
WASHINGTON (AP) -- Businesses reported creating or saving more than 30,000 jobs in the first months of President Barack Obama's stimulus program, according to initial data released Thursday by a government oversight board.
http://hosted.ap.org/dynamic/stories/U/US_STIMULUS_JOBS?SITE=RIPRJ&SECTI...
Nyuk, nyuk! On a related note, the article explains one of the reasons why I have found it so difficult to reobtain employment (other reason being that I was laid off from financial services). Namely, only 30k jobs created and New England (where I reside) fared the worst.
In all seriousness, Saluzzi is spot on.
P.S., thank you CAPTCHA for seven plus 31 =
We all love the market ramp....it's change we can
believe in.
Change as in nickel and dime...
Okay Joe. 666 to 1096 on the s&p means nothing. So does Themis only accept sell orders in order to protect their clients now ? TD get off the doom train Bro. Traders trade.
Traitors trade.
You folk's will love this:
God, Government, and Goldman Sachs
http://www.globalperspectives.info/gp-videos?view=media&layout=default&i...
If it's a bubble, then we are at the very early stages.
I would expect that line of thinking from someone who does not see any major events on the horizon.
Agreed, I see another year to go of unabated MBS money printing.
If and when MBS money printing stops, maybe Spring 2011, look out below. It is going to be a crash like no other. S&P 2000 --> 600.
Dream on 2000....S&P 600 after 666---try 300. The best this bear rally has to go is in March-April 2010. Then the truth will reveal itself--that being, the US consumer has changed their tune. They are into survival and not the ego of the next best thing since they are maxed out. Perhaps the swing change of personal consumption is a good thing. We will no longer identify ourselves with our purchases and be grateful for food, mortgage, rent, survival. That's whats going on in America in the heartland. And that good thing for personal survival will suck for the market. So be it.
I agree. But--and this is important--the consumer pullback is only in its early stages.
Wal-Mart has fewer goods for sale, but still a shit0ton of stuff we don't "need."
Calling the timing is impossible for me. It seems to me though that Bernanke's hand has been called already by the Chinese and the Japanese, by virtue of their public protests about printing, China's rush to internationalize the Yuan, Japan's hinting about Samurai bonds, the recent call for USD = 50 Yen by Sumitomo Mitsui.
So will the markets collapse when the zero percent liquidity and QE dries up, or will Bernanke "go for it"? I still think he has no choice but to go for it. And for me, long PM's and clutching (did I just coin a new investment term?), timing isn't terribly important.
Joe give us a break. Now you're offering us your version of the markets fair value. Weakness.
Thats bloombergs way of programing balance...did anyone watch the 10K party with kool-aid. The guy has Moxie
Saluzzi may be smart but thats not what is required to manage money. Smart people think market is risly and stay out. Smart money managers know market came down too much and stay long. Nobel prize winner in economics is not a good money manager and should not give any stock advise.
by the way, if you feel like captcha is too complicated just keep pressing save untill it comes up with really dumb math question that can be readi ly answered.
Thats what i do every time...
Well, that explains how you got let in...
smarter than the rest of us with all our crumpled work sheets on the floor. that was really funny; i enjoyed the laughs. both of them. reminds me of advice i heard an expert give to a group of hospital dietians. "A lazy man plans the most efficient kitchen layout."
This story reminds me of a quote from Wilde's 'The Picture of Dorian Gray',
"Nowadays, people know the price of everything and the value of nothing."
An update of that line should be . . .
"Nowadays, people know the price of everything and the value is nothing."
It's impossible to find realist people like Saluzzi here in Brazil, I wonder what he would say about this country.
Our stock index was 8k @ 1999 when we had dolar parity, today it is 66k (29k in the meltdown last year) and the dolar is 1.75 real, say what?
Having a high index doesnt absolve you from being in the unfortunate South American part of the world.
Sure it doesn't, this country has no infrastructure (might better than africa, but at least 30 years away from developed countries). My point is: despite all the bubbles out there, this crappy country in which I live has survived/improved, no more inflation here since 1994. Probably at the cost of jobs in your country. Blame globalization.
Tell 'em Joe at CNBC to stop pissing on our heads and telling us it's raining out.
Nobody pissed on my head but my pocket is wet.
Nice words of caution. But as long as the market keeps moving up, there is no reason not to take advantage of it. It may become a problem though. when the market turns lower and everyone may start heading for the exits at the same time!
admin
at http://invetrics.com
This is funny. Someone mentioned QE. QE didn't do this market. The stress test nonsense and the elimination of mark to market and the installation of fantasy accounting bailed this out. Saluzi was talking about the banks making money because the funds rate is near zero and they are getting 5% or something. They may not get their money back because things are deflating, not inflating. Remember, they already have the accounting money the Fed is putting out, as they swapped assets for it. Saluzi brought up something that he didn't go into details, but the estimates are low on purpose. They are putting numbers out there that are going to be beaten. I am sure there is fudging going on. I'm in a fairly prosperous area of the country, North Dallas and I can tell you business is down. Clearly lying is up.
I noticed the 90 day T-bill was .06% on the tape. This is really bearish. Also, housing never was the problem. Debt was and is.
BTW, markets are efficient. They eventually punish every mistake.
a day in the life of Lloyd Blankfein http://www.youtube.com/watch?v=NisCkxU544c&feature=fvst
I'm THE boss... where do you find this wicked cool shilt
How can we have this debate and no mention of the dollar,..I need a more full circle analysis, if MBS purchases keeps going until 2011 how can foreigners like China etc keep seeing the dollar take another 15-20 % dive and still consider buying treasuries as a good option?
I thik BB and Timmy-turd knows this (and know that the Chinesse know that they know, that they know)
Also, won´t oil go to $ 100 and beyond and force a reality check onto the markets much before?
I´am here to learn,..teach!
Kindly
Mr P
Copenhagen
I need better input,..how come no mention of foreign holdings of dollars,..if mbs purchases keeps the rally going until 2011,..then will china etc see another 15-20% dive on the dollar and still consider buying treasuries as a good option?I doubt it,..and I think BB and Timmy turd knows it.
Also it will mean oil at what? 80-120?,..won´t that force a reality check onto the markets much before?
I need a full analasys,....I´am here to learn,..teach!
Kindly
Mr P
Copenhagen
How can we have this debate and no mention of the dollar,..I need a more full circle analysis, if MBS purchases keeps going until 2011 how can foreigners like China etc keep seeing the dollar take another 15-20 % dive and still consider buying treasuries as a good option?
I thik BB and Timmy-turd knows this (and know that the Chinesse know that they know, that they know)
Also, won´t oil go to $ 100 and beyond and force a reality check onto the markets much before?
I´am here to learn,..teach!
Kindly
Mr P
Copenhagen
How can we have this debate and no mention of the dollar,..I need a more full circle analysis, if MBS purchases keeps going until 2011 how can foreigners like China etc keep seeing the dollar take another 15-20 % dive and still consider buying treasuries as a good option?
I thik BB and Timmy-turd knows this (and know that the Chinesse know that they know, that they know)
Also, won´t oil go to $ 100 and beyond and force a reality check onto the markets much before?
I´am here to learn,..teach!
Kindly
Mr P
Copenhagen
How can we have this debate and no mention of the dollar,..I need a more full circle analysis, if MBS purchases keeps going until 2011 how can foreigners like China etc keep seeing the dollar take another 15-20 % dive and still consider buying treasuries as a good option?
I thik BB and Timmy-turd knows this (and know that the Chinesse know that they know, that they know)
Also, won´t oil go to $ 100 and beyond and force a reality check onto the markets much before?
I´am here to learn,..teach!
Kindly
Mr P
Copenhagen
How can we have this debate and no mention of the dollar,..I need a more full circle analysis, if MBS purchases keeps going until 2011 how can foreigners keep seeing the dollar take another 15-20 % dive and still consider buying treasuries as a good option?
I thik BB and Timmy-turd knows this (and know that the Asians know that they know, that they know)
Also, won´t oil go to $ 100 and beyond and force a reality check onto the markets much before?
No one touched on this subject,..that goes for everyone, bloomberg, Saluzi, ZH, bloggers,..
I´am here to learn,..teach!
Kindly
Mr P
Copenhagen
How can we have this debate and no mention of the dollar,..I need a more full circle analysis, if MBS purchases keeps going until 2011 how can foreigners like China etc keep seeing the dollar take another 15-20 % dive and still consider buying treasuries as a good option?
I thik BB and Timmy-turd knows this (and know that the Chinesse know that they know, that they know)
Also, won´t oil go to $ 100 and beyond and force a reality check onto the markets much before?
I´am here to learn,..teach!
Kindly
Mr P
Copenhagen
"You don't buy the past."
No. The past owns you.
Listen to Max.
Fraud, Not Froth...
http://maxkeiser.com/2009/10/16/video-max-keiser-is-the-crisis-over/