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David Rosenberg Shares The "Lament Of A Bear"
Yesterday, in a must read post, Gluskin Sheff's David Rosenberg played the devil's advocate and presented a much needed experiment in contrarianism, attempting to unravel what it is that bulls may be seeing in the economy and the market (an analysis which may have to be revised after today's pro forma 400K in initial claims and deplorable retail sales update). While we don't know if anyone was converted into the permabullish fold as a result, it certainly was useful to have a view of what "sliding down the wall of satisfaction" means currently . Today, Rosie is back to his traditional skeptical self with today's publication of the "Laments of a Bear", which is yet another must read inverse view of everything that yesterday was not. Our advise to readers: be aware of both sides of the argument and make up your own mind. Plus at the end of the day the only thing that really matters is what side of the bed Bernanke wakes up on...
From Gluskin Sheff's Breakfast with Dave
Lament of a Bear
Yesterday, we highlighted the bull case for equities, primarily based on the view that the stock market is cheap by historical standards and that the high bar for expectations is far lower than it was this time last year.
Today, we provide a counter view, even as we tip our hat to the bulls, who have been more right than wrong since early October last year, but prior to that were dreadfully wrong from the late-April recovery highs.
As it now stands, the S&P 500 is basically where it was at the close on the first business day of the year and smack-dab in the middle of the 2011 min-max range. It's still a see-saw battle.
To be sure, the near-term backdrop is being constructively underpinned by positive seasonal and technical factors. Tactically, it is probably not a bad thing to have some toes in the risk pool, and our investment team began to add some beta a few weeks back — even in the challenging 2011 environment, having the risk-on trade on for the first few weeks/months was a pretty good alpha- generating thing to do.
But in the secular bear market we are in, and as the evidence from the 2011 experience (even much of 2010 before the onset of QE2) illustrated, rallies are to be rented, not owned. For the most part, we remain quite cautious and skeptical even as we join in this traditional early-year rally.
That said, valuation is at all times a case of beauty being in the eye of the beholder. Yes, classic trailing and forward P/E ratios are very low, but on a cyclically smoothed real earnings basis, the market is at best fairly valued and actually overvalued on a Tobin Q basis (market value versus replacement cost).
And as for sentiment, it is a mixed bag. As I debated Jim Paulsen at the CFA forecasting dinner in Charlotte this week, I realized how much emphasis the uber-bulls place on sentiment and confidence, citing how depressed the surveys are — "if only we got a little confidence boost...".
To be sure, the economics community is less effusive than they were heading into 2011, but is a 2.1% consensus real GDP growth forecast really that downbeat? Or, say, $107, or 10%, growth for corporate earnings out of the analyst community? The Investors Intelligence survey, as we said earlier, is over 50% in terms of bullish sentiment. Consumer confidence is at an eight-month high. The NFIB small business sentiment index is at a 10-month high. The IBD economic optimism index jumped 11% in January, up five months in a row, to stand at its best level since last February.
So by what measure exactly is sentiment truly washed out, as the bulls claim?
To be sure, 2011 was a flat year for the market in a period that saw positive profit growth undercut by a compression in the P/E multiple. In 2012, we may yet again have a flat year — with intermittent volatility — but the with tables turned: multiple expansion offset by an earnings contraction.
Indeed, it can hardly be said that the consensus of forecasts is bearish when it points to a record $107 of operating earnings for this year. But what is key is these EPS estimates are coming down and until that process stops, the overall backdrop for equities will be rather challenging. Low valuations among the traditional P/E metrics may provide a cushion to the downside, but the downward path in analyst earnings revision ratios will limit the upside.
As we said, rent the rallies. This is no time for dogma on either side of the debate.
As for Q4, here is the reality. The bottom-up consensus view is now +7.1% YoY, which is way off the +15% forecast when the quarter began. This is the slowest trend since the third quarter of 2009, just as the economy was escaping from the grips of the most severe recession in seven decades. And if you haven't noticed, in terms of corporate guidance, the ratio of negative pre-announcements to positive ones is now at 3.5x, the highest this has been since the Great Recession was celebrating its first birthday in Q4 2008 (a typical ratio is more like 2.3x). Against this background, the consensus has sliced the Q1 earnings growth forecast to +5.4% on a YoY basis from 10.2% three months ago.
The Bloomberg consensus is for sequential contraction in U.S. corporate earnings for Q4 of 2011 and Q1 of 2012. So there may not be a recession in GDP — GDI (Gross Domestic Income) may be something else however — but it may be the case as far as corporate earnings is concerned.
And in the end, it is profits that investors pay for, not GDP, which is the domain of the economics community. The hurdles for corporate earnings for 2012 are numerous and building:
- Recession in Europe — affects 20% of revenues of U.S. corporations
- Slowing in Asia — China's import growth was sliced in half to 11.8% YoY in December and its inbound traffic is somebody else's export receipts
- Margin squeeze from stubbornly high oil prices
- Stronger U.S. dollar impact on foreign-sourced profits
- Reduced tax benefits
- Higher employment expenses and lower productivity growth.
- Crimped pricing power (as per the latest NFIB survey)
- Profit margins coming off six-decade highs ... no more room for expansion
- No yield curve for the banking sector to ride off of, limited ability to squeeze more earnings from loan loss reserves
The key to success will remain much as it was last year. Focus on companies and sectors with earnings visibility, non-cyclical characteristics and a demonstrated ability to provide dividend yields with payout growth. The pundits at Standard and Poor's are forecasting a record of at least $252 billion of dividend payouts this year, surpassing last year's $241 billion.
That means avoiding luxury-goods retailers like Tiffany's, which just posted disappointing sales results and cut their profit guidance. Its Fifth Avenue store posted negative YoY sales and others are bound to follow as financial sector layoffs mount and bonuses are pared back.
It is difficult to believe that with a 2% yield in the broad market that the dividend theme is somehow a crowded trade or an old story now just because it worked so well last year. It worked well for the right reasons. In a market meat grinder, at least you have the dividend tailwind at your back (but avoid the traps — 101 companies also cut or suspended their dividends in 2011). Telecom has a 6% yield, Utilities at 4.2% (and 15% price appreciation last year) and Health Care at 3%.
Bristol-Myers, Home Depot and Con Ed are all examples of companies in a challenging "market" that generated double-digit returns last year, with the help of the dividend stream (not to mention AT&T lifting its quarterly payout by a penny to 44 cents a share or Ford resuming its dividend policy for the first time since 2006). Even the gold miners have a "yield" in today's environment where the boomers are craving more income in the total return of their portfolios. What about McDonald's? A fast food restaurant that is largely non-cyclical, has a global brand, earnings stability and a nice 2.8% dividend yield to boot (having just boosted its quarterly payout 15% to 70 cents). Look — even bears are carnivorous.
On a final note in this chapter, we find it extremely fascinating that as everyone gets excited over the start to the year in equities, the action in Treasuries is serving up a big fat non-confirmation on any view that the risk-on trade is being built on any lasting cyclical momentum. Sorry — but that is the message from the Treasury market where the yield on the 10-year note has been dragged back below 1.9% after yesterday's very robust auction. The other message is that secure income is increasingly becoming a scarce commodity.
And it is against that backdrop that we are seeing a growing trend towards diversified ways to play the "boomer-driven income theme". Three examples showed up in yesterday's WSJ alone (and all in Section C):
- U.K. Debt Continues to Shine (the country is a surrogate for troubled Europe
- fiscal austerity is a reality and the debt/GDP ratio is lower than in [MU)
- A Market Builds for Single-Family Rentals (our global macro fund PM has been paying attention to this for a while now)
- Storage REITS Enjoy a Boom (talk about a creative way to generate yield in a nearly recession-proof industry)
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When the most famous bear throws in the towel, could the top be far?
You mean Bernanke?
-John
http://www.youtube.com/watch?v=tcSIZg4wlgo
HAHAHAHAHAHA! GOOD ONE! "Economist". HAHAHAHAHAHA!
News Headline Summary (Commodities) Economist Dennis Gartman says commodities may see 'modest' inflation in 2012
"Our advise to readers: be aware of both sides of the argument and make up your own mind."
We wouldn't be here if we hadn't already done so.
For Thursday afternoon laughs, I give you pirates, lol.
http://af.reuters.com/article/somaliaNews/idAFL6E8CC6Q020120112
Rick Santelli Busts Mainstream Myth that Labor Force Participation is Falling Due to Retirees:
Rick Santelli brought it to CNBC's attention today that, “those 55 and older are actually staying in the workplace. Their labor participation rate is actually the highest in many decades.”
Steve Liesman was unable to defend the government’s propaganda of jobs growth so he basically called Santelli wrong by saying, “I have a choice to make as to whether or not to believe the leading economists in the country or Rick Santelli.”
So if the supposed retirees are not retiring, but yet the labor force is dropping, that means that the entire drop in the labor participation rate is falling on the young and middle aged.
http://TheSilverJournal.com
What's this world coming to? How awful!
Greek children are left in the street by parents that "can't afford kids anymore"? How tragic.
http://www.dailymail.co.uk/news/article-2085163/Children-dumped-streets-Greek-parents-afford-them.html#ixzz1jCQcH7gv
Hey Ben, are these people you referred to when you said "fears of inflation are largely overstated and rising food prices can be attributed to more sophisticated diets".
Asshole!!
What happened to your QE 3 ? I thought you said the system would collapse without it..? As silver rushed past $45
Many bad calls / bubble pump and dump's have sprung forth from this land.
Cheers
Bernake wants QE to infinity, that much we know.
http://goldisking.blogspot.com/
That's a patented phrase you are using there ... now several years running .... here straight from the source:
"QE to infinity, because there is no other alternative."
- Jim Sinclair, JS Mineset
When rates skyrocket for Italy and Spain 10 years, ZH and bears hit the panic button. When Italy and Spain had very successful bond issuances on Thur and Fri, the market moved higher. It may be contrived but it did happen and ZH seemed to ignor good news.
Is everyone here totally still into long-term buying-and-holding, or are everyones' holdings so small that the comissions for selling / buying (around $20 for a round-trip trade) significantly move their bank-balance? Isn't buy-and-hold so passe? Why not just trade the waves up and down - because there's money to be made that way.
Remember - every position you hold each day - you need to evaluate it as "would I buy it at this price today, given the outlook?" Basic Common Sense 101 - Sunk costs are just that - SUNK!
And anyone that wants to buy Physical PM can do so - at less than $2 of spot - so stop lamenting about coin dealers - let's get serious.
Hard to put lipstick on the current economic pig.
Bla bla bla
Money managers must be pulling their hair out. Nothing makes sense, and that is because there is no underpinned value. There is no value in the market; never has been. Nothing has intrinsic value. It is all worth nothing.
How can anything be valued properly when you have a market of interventions (money printing) and rumors of intervention?
The DOW will return to it's 2009 lows, but in REAL terms if not nominal. Within 2 years max.
Check out TURDS site, he contradicts himself. Tells the masses that paper is criminal then trades the COMEX. In with the sharks..keeps the criminal ball rolling..hope he loses his shirt. He certaily doesn't practice what he PREACHES.
Fuck you, douchebag.
I buy one fucking silver call with money I surprisingly "rehypothecated" from MFing Global and i'm suddenly a hypocrite?Fuck off. Please don't come back to my site.
Just sayin, HYPOCRITE. I only read your garbage never post. Practice what you preach you're making a FOOL OF YOURSELF.
Whatever, dude. "Read my garbage". Glad you waste your valuable time "reading garbage".
Again, please do not return to my site. Thank you.
I really like Turd's blog. It's my favorite place to hang around. I think he is very clever and understands how things work. He has a very good credibility and much of what he predicts becomes reality.
That said, I for one would like to understand why he did buy that paper after warning us folks about how rigged is that game.
I mean: Turd has the right to do whatever he wants and I appreciate his honesty telling us he bought a call, but I'm not sure I understand why he did it and I think it would be interesting if he would explain why he bought paper.
That said, I will continue to read both ZeroHedge and Turd's site, because I like both! :)
A call.
One call.
For a grand total of $1500.
Which I purchased with money I never thought I'd see again.
Whatever.
I want to end the criminal behavior not PROMOTE it. Too bad about the garbage mouth. You'll FIGURE it our one day...maybe.
Mind sharing your handle over there you coward? Just to be fair and not hiding in the shadows?
Hey Turd, fuck one dog...love you bro, keep fighting the good fight.
@TURD--- comingdepression is certainly a bit uncouth, but he does have a point. if the physical holders gripe about manipulation and how the paper market is skewed, then those physical holders should be NO WHERE NEAR THE PAPER MARKET IN ANY WAY SHAPE OR FORM. you cant expect to change a system if youre contributing to it.........................
Thank you, the TRUTH HURTS. His only recourse is to get NASTY, foul mouthed and unprofessional. His site will go a long way with that TOILET.
Your only "option" is a foul mouthed hypocritical toilet mouthed comeback? WOW. You'll get many readers with that 10 year old response. You deserve to lose every nickle and your site goes down, as Homeland Security tightens the grip. Oh ya thats a conspiracy too. I forgot.
What really pisses me off is that I've allowed you to post all of your anti-Semitic, illuminati nonsense. I've never deleted or censored any of your bullshit regardless of how silly it makes the site look. And this is the thanks I get? You come on here to disparage me and my site?
Fine. Whatever. You are who you are. Again, I just ask that you please delete my site from your favorites list and you slink away. Thanks.
I post NOTHING I read the comments. What world are YOU in?
But it's okay to post here and not challenge him on his own blog? WTF kind of idiot are you?
are you his sissyter, lawyer, spokeperson or just the resident bum buddy? Just wondering.
No you fucker. I just hate trolls.
"anti-Semitic, illuminati nonsense"
now youre really losing credibility.
Researching Criminal zionism
Turd is a fraud ....
Hes traded futures many times check out older blog. Charts work until boogie man comes, lol
You been here a week. How would you know?
ZH is full of clowns and trolls who change identities constantly. It's impossible to keep up with them.
one week really...be a little nicer....Turd got a nice hat...
Turd has a really hard time understanding some things... like simple cause and effect... and the physical sciences of 9/11.
9/11: A Conspiracy Theory
http://www.youtube.com/watch?v=yuC_4mGTs98&feature=player_embedded
A MORON on one level is a MORON an all levels... kinda like Smokey(Jim)Quinn.
IGNORANCE IS STRENGTH
for most of us there was a time when we bought the 'official version' of the events. it took me five years or so before i started seeing how it didn't all add up. building 7 was the game changer for me. how can you take down three steel skyscrapers with two airplanes? how can they 'collapse' in seconds, IN SECONDS, from fire....especially if, in the case of 47 story building 7, they haven't even been hit!
Last week I took out 10 pins with 1 bowling ball.
nice retort, metaphor and all. smart. I like that
That ranks right up there with "prove that you love your father"
The human race can be somewhat criminal in general, so why don't you do us hypocrites a favor and off yourself. That way you don't have to run with the "sharks" anymore.
Gazinga!
It is possible to make a point without being a dickhead ya know. No sense in slamming someone's site wherein the resounding message and direction are very solid - but the tactics or behavior you disagree with. Sort of like throwing the baby out with the bathwater... a knee-jerk reaction.
@comingdepression
you are far too hard on Turd, but the point you appear to be making could also be applied to Celente and his MF boondoggle, in the end Celente has some good stuff and good insights but he not only lost a pile of dough with MF but much of his reputation, people hate hypocrisy.
@comingdepression
you are far too hard on Turd, but the point you appear to be making could also be applied to Celente and his MF boondoggle, in the end Celente has some good stuff and good insights but he not only lost a pile of dough with MF but much of his reputation, people hate hypocrisy.
bought spy puts today and long Dx. small pos
july 120
dx @ 81.03
That is my opinion
Don't just junk explain your self.
I am not your junker....your post is just your opinion....nothing wrong with that.
Got to hate the drive-by junkings. Happens sometimes. Some folks don't get the idea of fight club.... and how we all benefit from the abuse!
You and all the other soccer moms in America
"The key to success will remain much as it was last year."
Once again...Paper supply brings out physical demand!
The U.S. mint announced that January sales of Gold AND Silver Eagles surged to near record levels in "the first days" of the month. The "first days" being by January 3rd which by the way was THE 1st business day of the month. Yes, Silver Eagle sales were higher than ANY full month except for Jan and Sept. of last year and the first month of sales back in 1986!
We are to believe that this was ALL done in one business day?
No, the sales were actually logged in Dec., you remember that don't you? Dec. saw both Gold and Silver prices trashed and supposedly investors were regurgitating their positions because as Dennis Fartman said, "the Gold bubble has popped and now in a bear market".
Yes, AGAIN...just like May for Silver and Sept. for Gold of last year, the "price" collapsed while demand exploded higher. I don't know what planet anyone else lives on but I payed good money to attend a university where they taught me that prices go down because of marginal selling and up because of marginal buying. Of course these sales were reported by the mint as "January sales" but you must understand that "they" think we are stupid.
"They" did not want to report ALLTIME RECORD SALES for Dec. while another arm was trashing the price, that would not add up now would it?
No, instead they report a monthly record that was all ordered and purchased in just one day BEFORE the close of business that day! "They" figured that "we" are so stupid that we couldn't put 2+2 together?
Do you see that last month's bullshit hammering of price was done with paper contracts as the real physical metal was being gobbled up? Do you see WHY it will be so hard for Sprott to actually source 50 million ounces of Silver that must be of the "real" variety as opposed to worthless paper contracts stating that they "really really really will deliver the metal"?
Hellooo...CFTC... Bart Baby and da Boyz...are you watching?
Did you AGAIN see that you are presiding over a tail market that is wagging the physical dog's body? Do you not see that paper levered at least 100 to 1 at a minimum is making "price discovery"?
How is your 4 year "investigation" into the Silver market going? Anything yet?
No... didn't think so.
The CFTC is really stuck. Just another "damned if you do, damned if you don't" scenario. They surely cannot admit the truth that these markets are a fraud because they would start a run on supposed inventories. They also cannot give a clean bill of health because when it all blows up, well, they were already on record telling the world that "all is well. Besides, even an illiterate monkey can see the manipulation" so why beat a dead horse, right?
So here we are, sitting, waiting, watching and being irritated by the obvious lies churned out by the paper markets. But sitting, waiting and watching what? Simple... until the last dregs of supply run out or physical demand "demands" delivery to the point of a default. Or of course, until a billionaire steps up with a measly paper order and asks for delivery that cannot be filled.
It really is this simple folks. The paper suppression schemes have for 15 years enhanced the real physical demand, slowly at first and now with a force that will turn into a buying panic. This is not rocket science, this is pure street logic that an 8th grade dropout couldn't miss. It is so funny to watch CNBC trot out "experts" who spout the stupidity that Gold and Silver are "oh so risky".
I wouldn't trust these "experts" at bagging my groceries!
www.lemetropolecafe.com
"Plus at the end of the day the only thing that really matters is what side of the bed Bernanke wakes up on..."
At least when this Fed chairman wakes up, it's not next to Andrea Mitchell........................
"sliding down the wall of satisfaction" now that's a sticky situation!
And there is still 16% real unemployment because people have stopped looking for work. CNBC pimping a bank rally and bank stocks on TV right now, sure thing.
... there is 22% real unemployment... John Williams!
http://www.shadowstats.com/alternate_data/unemployment-charts
The MSM is obsolete. It is now the OBSOLETE MEDIA.
There is so much free money sloshing around in the system that anything can be made to rally if they want it to. Yes, even Zombie banks. Buy some XLF and put it on a short leash.
And it is really far worse than that...many folks who are counted as employed have taken major salary cuts, many are employed way below their prior levels, the jobs being created are low wage ones while those being lost are high ones, etc.
I was glad to finally see that the rich in NYC have finally started to feel this "recession"....Tiffany's report was a real tell.
I'm in short today, near the close. I have not seen this degree of complacency for a long time.
Short today huh? That's what roids will do to you Saxxon......................
JUST STACKING THE PHYZZZZ DAILY....CLINK CLINK CLINK
People who are short just don't get it.
They will paint the chart with inflation and you will lose shorting.
You want to prosper?
Hard assets > Ponzi-rigged casino.
Ruff
I don't mean to be rude, but all this Dave talk about P/E ratios gives me one big pain in the ass. I believe neither the P or the E
IMHO, we're in a overbought market. This is a short term issue. Long term...
"Happy New Year. We enter 2012 with a great deal of hope, but our hopes are not for more bailouts, or money printing, or any of the myriad policies that investors seem to hope will save bad investments and sustain elevated valuations. Instead, our hope is that in 2012, the market will finally "clear," in the sense that bad debt around the world will be recognized as bad and restructured; that overleveraged financials will be taken into receivership instead of forcing austerity on every corner of the global economy in order to make them flush again; that rates of return will rise enough to compensate and encourage saving – and high enough to encourage borrowers and other users of capital to allocate the funds productively. Of course, in order to restructure bad debt, someone has to accept a loss. In order for rates of return to rise, valuations must decline. In short, our hope is for events that will unchain the global economy from an irresponsible past and open the gates toward a prosperous future. Maybe that is too hopeful, but we are not entirely convinced that bailouts and 'big bazooka' will be as easily procured in the year ahead as a confused public has allowed in recent years.
– John P. Hussman, Ph.D.
you have to index. earnings mean nothing. the market acts like a roach motel because investors like to buy, they hate to sell. you can make more money being a bear that a bull, because in a bull market everyone makes money, and you're just indexing inflation. i'll have a big fat steak waiter, how much is that? twenty dollars, it was ten dollars last week? yessir those awful Cramer people have been in here, booyahing, and have to give you a seat by the kitchen.
Scary market.
- Capital flight from Europe and China. Some of this is going toward Treasuries and real estate (West Coast). Some will go to stocks b/c funds are managed and portfolio managers will allocate ... regardless of PEs or even earnings. This is index allocation.
- EU unravel will effect US businesses particularly banks. Fed will act to protect the big banks as always and this will be good for stocks (and metals).
- China unravel will crush crude and industrial commodities. Q: will gold decouple from crude? It is beginning to look like it.
- All markets dependent on deleveraging in EU and elsewhere. When Greece defaults there will be blood ...
bottom line is modestly bullish stocks bonds gold silver unless EU collapse gets out of hand. Bearish for crude in any event.
Why be so negative? Obama has only borrowed $5 trillion in 3 years while it took all other Presidents combined to borrow $6 trillion. AND he has nothing to show for it!
http://confoundedinterest.wordpress.com/2012/01/12/obama-asks-for-another-1-2-trillion-for-a-3-year-total-of-5-trillion-all-other-presidents-combined-only-borrowed-6-37-trillion/
That fact is staggering and yet we still debate the "improving" economy.
400K haha classic revision. Market tanks, momos buy dips, HFT plays chicken before the close, some player buys long...it starts to sell. A nervous market trying to force a bull market.
No bull or bear, just chaos trading
"...the only thing that really matters is what side of the bed Bernanke wakes up on.."
The only tool this total tool has left, having shot his only other bolt lowering interest rates, is to "print"
And we now know how little effect this tool/fool gets for printing even in the $Trillion range... he'll be lucky to get 0.5% GDP growth for $10 Trillion down the toilet (politicians and bwankers pockets). Because we know pouring counterfeit wealth into the pockets of the most unproductive people in society is the most futile economic policy on Gods earth
Benny and his beloved monopoly on money institution is in grave danger being seen as impotent as well as incompetent (incontinent?). Better he watches he doesn't fall out of bed blowing bubbles
The calamity doesn't stop with this spend thrift leader who has never presented a balanced US budget plan.
Listen to his defense mode rhetoric on cut backs. Click the [+] to see the [-] breakdown.
http://www.usgovernmentspending.com/united_states_total_spending_pie_chart
BTW Janet, Fuck you! You're on the verge of getting caught in your own manufactured Intel terror fanaticism.
DHS Mall Cop Do you smell the fresh aroma of taxpayer defunding roses coming your way? LOL.
http://www.cnbc.com/id/45973377
"I am Jack's total lack of surprise."
David Rosenberg is like Bill Gross---> thoroughly and absolutely discredited.
A couple of points:
1) All the big players have been conditioned and counselled to stay with the stock market BECAUSE QE will inflate the value of stocks and because the FED will not allow significant deflation. DO NOT bet against this theme. You'll only be pissing your money away.The ONLY thing that will crash the stock market at this point is a serious, out-of-left field, black swan event. And I'm not talking about projected stuff like Greece leaving the Euro. It has to be totally unpredicted and serious.
2) Putting all your assets in gold and silver is foolish. The Fed and it's member banks will do all in their power to manipulate PMs down in price. They WILL NOT allow PMs to be a proxy for inflation and/or fiat collapse. You can piss and moan every day about how unfair this is. It is what it is. They are not about to hand over the fiat system. That being said, 25% or one's assets in PMs (physical or close) makes sense to me; assuming you've got good depth in your finances. I mean, if you have no cash and everything in PMs; that is assiine. Like Corzine, you might be correct over the long haul but you need to be positioned to survive the short haul. I don't care what anyone says, cash/dollars will very likely be a viable asset for quite some time. But we are right about the surviability of fiat in current state. Gold/silver can help hedge that risk.
3) You can get all worked up about this inequity/unfairness with righteous indignation; just try to stay level-headed about the reality of all of this. Don't bet the ranch on anything; try to right the injustices with real non-violent action (not just rants); and go on and enjoy your life. It's running out.
Look a little psych 101 here and the market is always driven by psychological fear and greed etc etc. But the current market is frustrating both bull and bears, because it's stuck in a very tight trading range and smoking far too much hopium.
It's lost direction. Everyone knows the global economically is f*cked, inflation and stagflation are ruling the show. That central banks are the only things left flowing liquidity into credit markets, private companies are hording etc
The big 400K job blowout was a very telling sign that QE is a waste of time and money. That it may not juice stocks like the bulls think, the bears may get a nice leg down, but again it will get caught in the CB's trading ranges. It's a horrible market at the moment.
It is a hard market to make money in, a big player will take more risk and leverage up more, via a derivative hedge. I think we will hear about some huge losses soon and even another rogue trade (from Europe, where else?).
i don't believe in those psychological factors any longer which is why bob prechter is such a schmuck. he dedicated an entire website to socionomics, which is reconstituted eugenics or crap. the whole thing is about money flow, once the money stops heading to wall street the party is over. ben bernanke is dedicated to keeping the sluice gates open, when does that end? soon, as confidence and the real economy move toward cash. more and more people avoid the banks altogether. it has nothing to do with psychology it has to do with practicality. i haven't lost faith in the currency i just don't want my money to go through their greedy fingers.
and would you believe the re: greed/fear markets 'rogue trade' could have come out of China...wow like clockwork!
trader talk:
*Rumours circulating around the markets re the sell-off in China markets linked to a trading scandal
ZH? This for real?
*US has imposed sanction of China's state-run Zhuhai Zhenrong Corp, said to be Iran's supplier of refined petroleum products.
Now that I re-read this it's apparent that you have a massive pair of balls. You have the most bearish blog I've ever seen, you've been wrong about the market for three years, now you turn around and attempt to be impartial!
It's an insult to anyone with a functioning brain!
" rallies are to be rented, not owned"....if it flies, floats, fornicates, or fluctuates it is cheaper to lease than own....
Rosie you are such a dick, sucking in your readers in with such BS, Oh so sorry this is 2012 but that would have been quite the insight if you had made it a year ago.
It's simple, really. With the advent of the internet, everything will undergo a revaluation. Some things previously thought valuable (paper) will become worthless. Some things retain value (gold, silver). The only question remains: what is of value?
But I have another question for you: what is of eternal value??