Grantham's Latest: "The S&P Is Worth No More Than 950"

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Wed, 08/10/2011 - 08:19 | 1545649 Sathington Willougby
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Is the Federal Reserve buying ES or equities ???

Wed, 08/10/2011 - 08:23 | 1545660 cossack55
cossack55's picture

Rephrase the question.

"Has the Fed stopped buying ES or equitites yet?"

Wed, 08/10/2011 - 19:59 | 1549158 Sathington Willougby
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I thought there was an inquiry, possibly by the good doctor, where the Bernanke said something like "blah blah blah can't rule out buying the shit out of spiders" or something of that Phd nature.

Anyhow I have this disagreement with someone who believes I don't KWTFITA since the fed OMO is through treasuries.  Trying to dig up evidence of PPT with other instruments. 

Wed, 08/10/2011 - 10:06 | 1546081 Chartsky
Chartsky's picture

Nothing but computer algorithms trading the ES any more.

Every single electronic market has lost WELL over 1/2 volume and is ruined for now.

Wed, 08/10/2011 - 08:19 | 1545651 Stumpy
Stumpy's picture

Off topic but still...

Questrade sent me a message saying they are sorry that their system didn't worked yesterday. Electrical problems....

And this morning, trying to trade in the Pre-Market:

ECN communications problems (line down)

Wed, 08/10/2011 - 08:21 | 1545654 Dr. Engali
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I think He is being generous at 950. Take off another 300 pints from that number and that gets us to about where we should be.

Wed, 08/10/2011 - 08:27 | 1545669 jekyll island
jekyll island's picture

+1

Wed, 08/10/2011 - 08:48 | 1545708 Re-Discovery
Re-Discovery's picture

+ < 600

Wed, 08/10/2011 - 08:59 | 1545737 EscapeKey
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Well, James Altucher "sticks with his Dow 20k call".

http://blogs.marketwatch.com/thisisinsane/2011/08/10/sticking-to-a-dow-20k-call/

Wed, 08/10/2011 - 09:34 | 1545906 vast-dom
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+1

Wed, 08/10/2011 - 08:22 | 1545657 cossack55
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Mr. G needs to beware being placed on the DHS Terrorist Watch List.  I hope he doesn't fly much or enjoys fondling and body-cavity searches.

Wed, 08/10/2011 - 08:23 | 1545663 slaughterer
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"In the long run, a prolonged period of lower priced assets would lead to a much-improved, less risky, and less bubble-prone environment. In short, a more manageable world. ... Just the kind of trade-off that the children in charge now would never make deliberately."

Go into cash and wait for the crash?  He honestly thinks that we are not going to enter yet another bubble in 2012? 

Wed, 08/10/2011 - 08:31 | 1545675 cossack55
cossack55's picture

Don't we have to get the hell out this bubble first.  Way too many freakin' bubbles.  How big is the bloody wand and is ii space-based?

Wed, 08/10/2011 - 08:26 | 1545666 jekyll island
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We are witnessing the unwinding of the debt trap that began over 40 years ago and was accelerated by Greenspan bailing out the stoock market in 1987.   Government and Federal Reserve prefer to see increasing asset values, if your assets are increasing in value then you are worth more, right?  Unfortunately the increase in prices was driven by increasing debt, which became too much to control and the market is trying to correct to a more stable value.  SP 950 is too conservative, it could go as low as 500 if the Fed ends QE.  Stock market needs this money creation to drive asset values higher.  Gold at $5,000?   Probably not, hate to say it but it will go much higher than that. 

 

 

Wed, 08/10/2011 - 08:32 | 1545677 Dr. Engali
Dr. Engali's picture

Never heard of a stoock market. What can I buy there?

 

By the way I agree with your comment.

Wed, 08/10/2011 - 10:34 | 1546218 jekyll island
jekyll island's picture

It's a fantasy land kept alive by old white guys on Wall Street and the Gov't, plus that Obama dude.  I would stay away from it if I were you.  

Wed, 08/10/2011 - 08:31 | 1545678 hungarianboy
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Hungarian Market big red again. When will this stop?

OTP bank -3.5%. While it was the third best bank in whole Europe with the latsest stress test....

Wed, 08/10/2011 - 08:32 | 1545680 Sean7k
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A little too Keynsian for my taste. General growth estimates of 4-5%, depending on which asset class you choose? In an environment of 5-8% inflation? 

It might be time to leave the markets altogether and start making money the old fashioned way- exchange through trade. Finding the products people want and selling them. Not quite ready to buy a wagon and oxen to tour the country, but something more modern may be a better way to create income and minimize taxes.

The way out of this mess will not be through regular channels. A new paradigm is required and strict adherence to the banker/corporate law structure may need to be mitigated.

Wed, 08/10/2011 - 08:41 | 1545693 Snidley Whipsnae
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Try some of your local swap meets and flea markets. You might be surprised how many FRNs are changing hands. Of course all those sales are being reported and taxes are being paid... or maybe not?

 

Wed, 08/10/2011 - 08:38 | 1545688 MiningJunkie
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Santelli just dissed Meredith Whitney bigtime! Buy gold and silver stocks and avoid the physical over the balance of 2011 and you will sail to riches.

Wed, 08/10/2011 - 08:43 | 1545697 mendigo
mendigo's picture

why are stocks better than physical

Wed, 08/10/2011 - 08:44 | 1545701 Snidley Whipsnae
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Care to provide a link? When I saw your screen name and factored in your 'Santelli quote' it set off my bull shit detector...

Wed, 08/10/2011 - 08:39 | 1545691 buzzsaw99
buzzsaw99's picture

Too bullish.

Wed, 08/10/2011 - 08:41 | 1545694 tiger7905
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Fully agree with the $5000+ gold call.
Kingworldnews London trader see's $50/oz daily gold swings as the normal.

http://goldandsilverlinings.com/?p=1516

Wed, 08/10/2011 - 08:49 | 1545713 Re-Discovery
Re-Discovery's picture

Swings?  Socket wrench moves more like it.

Wed, 08/10/2011 - 09:19 | 1545820 tarsubil
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Right at this moment, it looks like gold is breaking higher when it is at 1770. My eyes are bugging out of my head. If only I had cash at 1500 a couple weeks ago.

Wed, 08/10/2011 - 08:43 | 1545695 michigan independant
michigan independant's picture

Thank you for posting this. He is a true compass and I was thinking about him.

Wed, 08/10/2011 - 08:58 | 1545733 Snidley Whipsnae
Snidley Whipsnae's picture

He has posted nothing! I did a google search and can find no comments made today or yesterday re: 'Santelli Whitney' OR, and comments that Santelli made re: 'buy gold stocks not physical'.

Until he/she posts a link it's in the bs bin...

Wed, 08/10/2011 - 08:43 | 1545698 Sudden Debt
Sudden Debt's picture

Everybody know that stocks aren't priced according to their value and return!!

Stocks are valued against money in circulation.

SO QE3 WILL TRIPPLE ALL STOCKS!!!

WE DON'T NEED NO STINKING REVENUE!

...

I should write Obama's speeches... I'll give him a tweet.

Wed, 08/10/2011 - 08:48 | 1545703 Arch Duke Ferdinand
Arch Duke Ferdinand's picture

ARE AMERICAN STUDENT PROTESTS NEXT?

*****Moodys Warns Student Loans May Be the Next Financial Bubble.

10/20 million American Students Should Starve the US Government from its Taxes.
Can 10/20 million American students be jailed?.....

http://seenoevilspeaknoevilhearnoevil.blogspot.com/2011/08/moodys-warns-...

*****Eight Reasons Young Americans Don't Fight Back: How the US Crushed Youth Resistance

10/20 million American Students Should Starve the US Government from its Taxes.
Can 10/20 million American students be jailed?.....

http://seenoevilspeaknoevilhearnoevil.blogspot.com/2011/08/8-reasons-you...

*****OT: The Creek Short video ...makes one think outside the box.....
http://www.youtube.com/watch?v=BLRAqfN48zo&feature=feedbul

Wed, 08/10/2011 - 08:48 | 1545704 snowball777
snowball777's picture

Liquidity preference, bitchez. As for his recommendations, right assets...wrong time.

http://www.youtube.com/watch?v=kW6Zn3ZF7Do

Wed, 08/10/2011 - 08:47 | 1545707 ZippyDooDah
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Yeah, give that twit a tweet!  And one for me while you're at it!

Wed, 08/10/2011 - 08:50 | 1545711 lieutenantjohnchard
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as mentioned before i tip my hat to those investors willing to go home long over the weekend with equities. true you got a nice bump yesterday. but you got beaten up very badly monday, and had to suffer through the after hours trade monday night which ought to have been quite disconcerting. i'm with grantham on this one. it's too risky at this point in time.

Wed, 08/10/2011 - 08:49 | 1545715 Johnny Lawrence
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S&P will hit a new low at some point, in my view.  So that's below 666.  That's not because I think that's fair value (that would be well below fair value), but history shows that.  Great Depression and Japan all established new lows after their initial crash and reflex rally, and if you study P/E10, you'll see that the market often corrects to single digit multiples after hitting these levels of overvaluation.  I'll be backing up the truck at that point.

Wed, 08/10/2011 - 08:51 | 1545718 mendigo
mendigo's picture

speaking as one who knows or understands little:

it seems there has been a decoupling of the fate of multinational corporations and nations - which may be healthy for global economic stabilty if not national

we may soon see a shift in the balance of power from the sovereign nations to sovereign conglomerates - the conglomerates can benefit from the incompetence of the governments but are not bound to them or their fiscal policies

owning a mutinational with deep pockets is potentially equal or better to hedge fund

Wed, 08/10/2011 - 09:41 | 1545939 ReactionToClose...
ReactionToClosedMinds's picture

pleaee .. no disrespect intended ... but you miss some fundamental points (not to lecture either).

The world as we know it was fundamentally shaped by the cataclysm known as WW2.  US, which already was a trending superpower, survived relatively unscathed compared to much of world econ hvyweights.  WW2 was a much closer call than anyone now remembers and USA/West was very lucky ... except for the typical self-destructive human stupidity of Axis, etc... capitalism as anyone knew or cared was almost kaput because it simple-mindedly got tossed in idiotically with colonialism/mercantilism when it has nothing to do with either, etc,

Bolsheviks had world sentiment & simpleminded anti-colonialists/intellectuals on their side but not econ logic (based on Adam Smith's invisible hand) ... so forced USofA and Europe/NoAsia to stay focused ('containment') .... which then led as Reagan foresaw as former labor party head (Screen Guild Prez) but so many 'smarties' ridiculed to it's eventual unsustainable collapse.  This collapse threw an unprecedented  30-40% of global humanity into a labor market free-for-all as their national econ models & economies totally collapsed.  Commodities had been contained by Volker & Reagan-Thathcer as commies' commodities also collapsed and demand globally shrunk from this collapse. [will  ignore the PRChina opening/change which was strategic between USA, Russia and China but CHina opening has led to some of problems today obviously))

But to go back to ww2 and postWar Cold War .... World became dependent on USA as world protector/policeman (our military strategy has a few potentially fatal achilles heels ..... one e.g., we are heavily dependent on all tactical levels on air superiority/supremacy....... PRChina and Russians know this very well from 50+ years of proxy wars ... take this away from us and we become much less formidable very quickly as we cannot tolerate casualty levels like they can,etc.)   We had generally most effective military to keep trade open/flowing/protected and WEurope & NoAsia used US$ and supported Treasuries.  But with post-Cold War 'end of history' moment now fading, Keynsian idiocy, and US economy interests controlled by Wall Street versus Main Street .... and 'allies' getting increasingly pulled away from mutal self-interest by legitimate national/regional issues  ..... this 'structure' no longer works adequately.

..... the entire post-WW2 paradigm everyone assumes is there is about to collapse/change ... to what though? 

The world is dependent on a seriously flawed global capital markets model, which worked fine for 50+ years,  with the US$ as the reserve currency centerpoint and no other legitimate replacement on the horizon.  This translates into hidden support for Treasureis as safe-havens ( think: the US$ is the only large currency that can legitimately defend itself and it's allies ... no one else can .. that is why it is still a safe-haven).  But PRChina our largest creditor, or close thereto, holds our Treasuries for purely mercantile reasons, not survivial/strategic like our allies.

So we have a real gloabl markets conundrum which is a recipe for severe instability along with many other built up imbalances,  Marc Faber, maybe for slightly different reasons than the above take, sees the coming or onset of instability as well ... but his view and preceding can be rationally reconciled with disagreement maybe on the margins.  

So with the preceding in mind, any 'western' styled large corporate management team that does not see this risk,  that they have 'freedom' of operation & flexibility solely because of the post-WW2 structures (UN, IMF, World Bank, etc. ...all way out of their initial functional role as first dessigned due to their bureacracies getting full of themselves and trying to ensure an elitist role at the power table falsely) which are fading fast which also includes military defense, is totally deluding themselves.  Which is why GE's decision to shut down GE Medical Imaging in USA and shift it to PRCHina in seach of 'demographics' and market is incredibly stupid 

That is why it is a total fool's game for any corporate entity to think the world has evolved to that level you suggest.... human reality is that this is dangerously delusional globalist thinking. 

 

 

 

Wed, 08/10/2011 - 08:54 | 1545724 spanish inquisition
spanish inquisition's picture

Time to "Starve The Beast". Those unemployed are already doing their part, but there is more the rest can do. Buy necessities bulk, online and used. Pack lunches and stop eating out. Combine trips to eliminate gas fill ups, have high schoolers take the bus. Cut out movies, bowling and other entertainment (OK to have a treat night). Barter for services if you can. The middle class is funding the war against the middle class for the benefit of the Wall Street and our wars of "liberation".  I figure a month to start will get their attention....

Wed, 08/10/2011 - 10:22 | 1546159 tamboo
tamboo's picture

you forgot close all bank accounts, max out credit cards

to buy metals, goad collectors into breaking law = profit.

http://www.dallasobserver.com/2010-01-21/news/better-off-deadbeat-craig-...

and cancel the fookin satanic cable, stop paying to watch commercials.

 

Wed, 08/10/2011 - 08:55 | 1545727 ReactionToClose...
ReactionToClosedMinds's picture

no that anyone cares .. but I find Grantham to be a tad full of himself & doctrinairre.

His last missive on 'commodities', while maybe fundamentally correct at it's analytical core 'long-term',  Grantham could not help himself to opine on everything under the sun from his personal 'elite' perspective as a financial services giant wannabe (like he wanted some of Bill Gross's sunshine).   If you would have followed Grantham's immediate thesis then, you would have gotten slaughtered as commodities overall were just rolling over.  And Alan Abelson at Barron's bought Grantham hook, line & sinker ... so use your reality induced judgment ....  understand the analytics of Grantham but figure his timing and Bollinger bands are probably self-infatuatedly off.

Wed, 08/10/2011 - 09:00 | 1545739 Johnny Lawrence
Johnny Lawrence's picture

I agree.  I respect Grantham's opinions, but his writing style reads like a Shakespearean novel sometimes.

Wed, 08/10/2011 - 08:59 | 1545736 holdbuysell
holdbuysell's picture

Slightly O/T question for all:

Grantham discusses the high cash levels of corporations (and still not hiring). The question: if currencies are going to zero, what will corporations do to preserve that cash? Massive M&A? Other?

It'd be interesting to see Gold as a line item on the balance sheet.

Wed, 08/10/2011 - 09:06 | 1545759 slaughterer
slaughterer's picture

The best thing for goldbugs to do would be to have Gentleman Jim send Steve Jobs a prospectus on the future for gold. 

Wed, 08/10/2011 - 09:09 | 1545766 snowball777
snowball777's picture

Zero percent down and no payments for 2 years! ;)

Wed, 08/10/2011 - 09:01 | 1545744 bigdumbnugly
bigdumbnugly's picture

9 AM EDT.  must be time to whack the silver market.

Wed, 08/10/2011 - 09:06 | 1545757 shushup
shushup's picture

Really! So where's he been for the last year? The market was worth so much more then? Bullshit!

Wed, 08/10/2011 - 09:06 | 1545760 HCSKnight
HCSKnight's picture

"Walking across the Boston Common this morning,I came to realize that the unpalatable (to me) option of some debt forgiveness on mortgages looks increasingly to be necessary "

Really?  Mortgage debt forgiveness before bond haircuts?  Really? 

Over the past year, especially with his Global Warming proselytizing, Grantham has shown himself to be ethically and intellectually among the worst of creatures, a socialist parading as a capitalist.

Wed, 08/10/2011 - 09:06 | 1545761 Dr_Lucid
Dr_Lucid's picture

My Dad runs with the "$500K - $1 Million in CD's or cash crowd" at the local gym.  They are all retired - teachers, contractors, some dentists..etc..etc.  He comes home and says, "...when the group is complaining about volatility in Utility stocks ( a lot of them own AEP ) then I know the whole F$%%$ing thing is broken."

Sure a little naive for the ZH group, but these are the folks with mountains of cash on the sidelines.  Some of them just stopped doing ladders on CD's all together and want to wait it out.  They tried ETF's, they no longer look at the 20's or 30's...they are just tired of it all. 

And the wild swings of yesterday actually make them feel better that they are out since they used to watch the box all day and it made them crazy when the Dow jumped 50 points.  The robots, the Fed, Obama, whoever is out there to blame for this mess doesn't realize that OLD people don't have the stomach for jerk ass moves up and down like yesterday.  If they want to encourage investing again and get this cash off the sidelines they have to start making the market more stable.

Wed, 08/10/2011 - 09:11 | 1545774 slaughterer
slaughterer's picture

I know alot of the same crowd through relatives.   They could just buy gold, couldn't they?

Wed, 08/10/2011 - 09:16 | 1545804 JuicedGamma
JuicedGamma's picture

Not so much, the geezer crowd is looking for income and low vol, does gold show any sign of growing a dividend?

Wed, 08/10/2011 - 09:14 | 1545792 buzzsaw99
buzzsaw99's picture

sure, just make it where it only goes up (and on my dime).

 

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