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How Much More Does The Bear Market Have To Go?

Tyler Durden's picture


The secular bear market that the US has been caught in for a better part of the last decade will end. Eventually. The only question is when. Last week we reported that the bulk of market gains year to date, has been driven exclusively by PE multiple expansion, which is to be expected: EPS forecasts for the end of 2012 are now the lowest they have been since the beginning of the year. Yet while such sharp, sudden and short and bear-market rallies, exclusively on the back of the global central banks, are to be expected, the bigger question is how much more of a secular decline in PE multiples is to be expected before the bear market ends and a new bull market can begin. As the following chart from Crestmont Research shows there is quite a bit more to go, even with Fed assistance (or rather, because of it, and its forced rejection of reaching a fair clearing price sooner rather than later), before the bear market is officially over. Just over 50% more. To the downside.

How the Bear Market declines have looked in perspective, and where we ultimately have to go before all the artifical supports are cleared out:


And the Bull Markets preceding them...

h/t Things That Make you go Hmmm


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Sun, 07/29/2012 - 17:11 | 2660830 TheSilverJournal
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The P/E ration on this one should hit about 2.5

Sun, 07/29/2012 - 17:49 | 2660888 The Monkey
The Monkey's picture

Cheap money makes for bull markets. It would be the ultimate irony if TPTB set up another huge speculative bubble only to see it crash under it's own weight. Given a choice between a speculative bubble and ....

Think it can't happen? Then study the 1920's (policy in 1927).

Sun, 07/29/2012 - 18:09 | 2660928 TheSilverJournal
TheSilverJournal's picture

The cheapening of money makes for bull markets. Once the money stops getting cheaper, the bull market ends and the detrimental effects of providing cheap money are realized.

Sun, 07/29/2012 - 19:12 | 2661033 Muppet of the U...
Muppet of the Universe's picture

This is true.  But while everyone gets over hyped on all of the projected Fed Easing.  The Fed is likely doing no easing at all.  It is the market that is becoming his lapdog. 

Eventually, and this is absolutely true, the market will stop buying into the bc until something is really done. 

Even still, you must remember, the bear wins in the endgame.  whether that be because of long gold or short market.

Sun, 07/29/2012 - 19:32 | 2661061 RiverRoad
RiverRoad's picture

The House always wins.

Sun, 07/29/2012 - 19:42 | 2661077 The Monkey
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With the fruitcakes at the Fed, those of us with some liquidity can always win. Joe Sixpack's rising beer price supports my higher stock price. Wealth disparity rises. Sad but true. This is the fucked up monetary system we have.

Sun, 07/29/2012 - 20:09 | 2661114 TheSilverJournal
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That can only happen until a sudden depreciation, or hyperinflation altogether. 5 years tops.

Sun, 07/29/2012 - 21:21 | 2661236 The Monkey
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I'll be long gone. Retail will be left holding the bag.

Sun, 07/29/2012 - 22:31 | 2661352 TruthInSunshine
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Japan's Nikkei:  From 40,000 in 1989 to 8,700 today.


Some will claim that Japan has been caught in deflation:  This is incredibly disingenous. Japan's had a ton of inflation over those 23 years, but like the U.S., the Ministry of Mis-Truth & Dis-Information has tortured statistics pertaining to same to massively understate this 'problematic trend.'

For every reason some claim it won't/can't happen to U.S. equities, a very compelling reason (if not 2 or 3) can be put forth that it is likely to happen to U.S. equities (liquidity traps and radical central fractional reserve bank interventionism break markets).

The U.S. is on the same track in terms of indebting itself as Japan has been since that 1989 peak. No matter what anyone claims, there's every reason to believe the national debt will grow even more rapidly, due to larger annual deficits, as a result of more entitlement spending due to demographic trends in the U.S.

So, that's a 23 year secular bear Nikkei, devastating even the largest cap, 'safest', bluest of blue chip stocks.

Sun, 07/29/2012 - 22:35 | 2661367 jeff montanye
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useful perspective, imo.  japan first, europe second, u.s. third.

Sun, 07/29/2012 - 23:22 | 2661437 TruthInSunshine
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The parallels between post-1989 Japan and post-2008 U.S. are incredibly striking, right down to the ramp up in deficit spending, behavior of the government bond market (and yields), and the demographics, whereby couples literally decided to have few children or no children at all, as a result of economic circumstances.

The already inverted pyramid in the U.S., whereby there are 3 retirees drawing public and private economic benefits (pensions, medicare, social security, etc.) for every 1 working American that pays net-net taxes, is only going to get more inverted.

Has anyone here ever tried to balance an upside down triangular shaped object?

Sun, 07/29/2012 - 23:31 | 2661462 The Monkey
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What are we really comparing? Japan's QE was not outright debt monetization until recently. The US is monetizing on it's road to perdition.

Sun, 07/29/2012 - 23:40 | 2661479 TruthInSunshine
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"Japan's QE was not outright debt monetization until recently."


Oh really?

Mon, 07/30/2012 - 00:51 | 2661587 The Monkey
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Really. Check out Richard Koo's book, written around 2000 I believe. I don't particularly like Koo, but his mechanics are pretty tight

Mon, 07/30/2012 - 08:55 | 2661908 sessinpo
sessinpo's picture

"Has anyone here ever tried to balance an upside down triangular shaped object?"


Yes. The first notable person's name was Ponzi. Subsequent copy cats followed including a more recent Madoff.

But as I have said, ALL social programs are also upside down, or pyramid schemes that ultimately fail, including SS, medicare, medicaid, etc. The number of people on these programs continues to grow while the number of people supporting the programs can't keep up. This is the main reason why socialism fails. I sorry to break the bad news to you socialist/liberals, but the fact of life is that there are winners and losers and that is what free markets and capitalism brings out. Socialism just makes everyone a loser - social justice and redistribution of wealth.

Sun, 07/29/2012 - 21:44 | 2661295 economicmorphine
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Two seats empty to every one occupied at today's NASCAR race in Indy.  Yes, Joe Sixpack's beer is getting more expensive but he is responding by drinking less.  He has also avoided the Kool Aid.  Methinks that Joe Sixpack is not only smarter than Bernanke thinks he is, he's also smarter than Bernake.  Period.

Sun, 07/29/2012 - 23:35 | 2661477 jeff montanye
jeff montanye's picture

he might also be smarter than those front running the fed, again. 


Sun, 07/29/2012 - 19:33 | 2661064 The Monkey
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No, the Fed will most certainly ease. Think about it. To the Fed, the worst case is a bit of inflation and some political flack in the short run. Compare that to the self-reinforcing dynamic of a global recession. Bernanke will absolutely ease because it is an expedient way to remove short-term risks. As far as the long-term goes, they will hope that by anchoring the markets they will allow Europe and congress more time to solve their fiscal crisis.

Of course none of this will work, but it tells you where the next 5% is coming from.

My bet: ~$600 billion in open market purchases: intermediate and long term agency mortgages + short to intermediate duration treasuries. 50/50 on a one year extension of ZIRP to 2015.

If you are short into Wednesday, your nuts.

Sun, 07/29/2012 - 19:58 | 2661100 JamesBond
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you mean NIRP, right?

Sun, 07/29/2012 - 20:13 | 2661120 TheSilverJournal
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No, he means ZIRP. 

Sun, 07/29/2012 - 22:52 | 2661384 FischerBlack
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If you think the Fed is going to institute another round of LSAP at the next meeting, you're not paying attention to the 5y5y inflation breakeven. If history is any guide, Ben doesn't do LSAP until the market prices in less than 2% inflation for the 5y5y.  And right now it's solid at 2.5%. There's no wiggle room for LSAP right now.

Sun, 07/29/2012 - 23:41 | 2661505 The Monkey
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Bullshit. The spread between TIPs and treasuries is absolutely the wrong metric with a fixed real CPI target (2%) and nominal long term rates that have FALLEN by over 150 basis points in the last 15 months.

The Fed IS and HAS BEEN underrunning it's inflation target and has plenty of room for LSAP (according to their fucked up target).

In any case, don't be caught short and have your finger on FAS on Wednesday.

Mon, 07/30/2012 - 08:09 | 2661824 FischerBlack
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Drops in the 5y5y inflation breakeven below 2% have coincided with every major policy announcement since 2008. And no major policy announcement has occurred without such a drop. I think it's a mistake to opine on the likelihood of LSAP without taking this into account. It seems pretty clear to me that the Fed is watching the 5y5y.

Sun, 07/29/2012 - 22:55 | 2661390 Meesohaawnee
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if i were romney id be all over that. talk about election influence

Sun, 07/29/2012 - 21:56 | 2661311 philipat
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These Charts are using CAPE data which MAY not be reasonable because this cycle included TWO major bubble bursts. So far. On a future PE basis (And future earnings are ultimately all that matters) the S&P P/E is about 13X.

That said, it is correct that the average secular bear market lasts ABOUT, 18 years. So if this one began in 2000......................

Mon, 07/30/2012 - 01:36 | 2661614 The Monkey
The Monkey's picture

Heading straight toward bubble # 3. The China / commodity bubble. Only to be delayed / made worse by massive debt monetization.

Mon, 07/30/2012 - 00:54 | 2661588 The Monkey
The Monkey's picture

Countdown to global easing: hours, days or weeks.

Shanghi stock exchange: stuck at 52 week lows.

For a contrarian high beta bargain: Facebook, Zynga and Chinese stocks.

Sun, 07/29/2012 - 17:14 | 2660832 francis_sawyer
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Who cares about bear markets?... Work LESS & be happy...


Sun, 07/29/2012 - 19:37 | 2661067 RiverRoad
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You got that right.  We ape eveything about the Europeans.  Now we've even got their unemployment statisics; minus the bennies, I might add.  Now we're just one more European country.

Sun, 07/29/2012 - 19:50 | 2661087 francis_sawyer
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& work more & eat worse... (well ~ at least those who don't know any better)... Go figure!

Sun, 07/29/2012 - 17:14 | 2660833 the 300000000th...
the 300000000th percent's picture

bear market? i thought we were still in a full retard bull market with the dow up to over 13000. Do u mean soon we will enter a double duty super duper bull market?? with the dow up to 100,000?


Sun, 07/29/2012 - 17:16 | 2660841 TheSilverJournal
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We will. And P/E will be getting clobbered. How is this possible?...Massive inflation.

Sun, 07/29/2012 - 18:46 | 2660988 Muppet of the U...
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In the event of hyper inflation: see Zimbabwestock market.

Sun, 07/29/2012 - 20:28 | 2661138 bigkahuna
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There are no real investors in this market. It looks like large institutions have accumulated a very large majority of outstanding publicly traded shares comparatively speaking over time. Once the regular investors have rotated out of the market, all that is left is to sell shares back and forth. The only reason that there is a down day is because the IT people got laid off and some joker from management has to get off their ass and watch the algos.

Sun, 07/29/2012 - 21:54 | 2661315 philipat
philipat's picture

Agreed. It's now just a circle jerk between HFT algos.

Sun, 07/29/2012 - 17:16 | 2660842 MunX
MunX's picture

More of a right shoulder of a rounded top.

Sun, 07/29/2012 - 17:17 | 2660843 Poqit
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Yeah, even the 2009 low had a Shiller PE of 15, only slightly below the historical median.

Russell Napier's estimate for the S&P trough is 400, but I can't imagine the powers that be would let that happen.

Sun, 07/29/2012 - 17:26 | 2660858 Duke of Con Dao
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here's the lastest installment in the series 'You Didn't Build That!' starring the Fuhrer himself:

YouTube - 'Nazi Party? Adolf Hitler... You Didn't Build That!' sez President Obama


el Dukerino

Sun, 07/29/2012 - 17:26 | 2660860 JustObserving
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Why are you applying reason and history to a totally manipulated market? That is just a waste of time.  The Fed controls the market.

Sun, 07/29/2012 - 17:36 | 2660866 TheSilverJournal
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To see what happened in past booms and busts. This last boom (expansion of money and credit) has been the greatest of all, so when the bond bubble implodes and the printing press is rendered useless, it will be the greatest bust ever as well.

Sun, 07/29/2012 - 17:37 | 2660870 ghenny
ghenny's picture

Anyone care to hazzard whether the Draghi print - if it occurs - will drive the DOW to 15,000 this year or 10,000?  For the life of me I cannot figure out what logic would guide a decision on this given the entangelments (as in quantum voodoo) between Central Banks, Global Economy reports and crazy market movements.  Would love to hear some clear thinking on this.

Sun, 07/29/2012 - 17:43 | 2660878 TheSilverJournal
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It could hit both this year yet. If the Bernanke doesn't come out with another giant LSAP Wednesday and there's more game playing in the EU, equities will fall. But once the Bernank pulls the trigger and print and purchase and the ESM is approved and action is taken, inflation will roar bringing stocks who knows how high. Silver will outperform all asset classes.

Sun, 07/29/2012 - 17:45 | 2660881 fonzannoon
fonzannoon's picture

SilverJournal I wonder how much more juice this market has even if Ben presses the button. I think metals still have a lot of upside but Bernanke has this market pricing QE in right here no? Maybe we get a big week?

Sun, 07/29/2012 - 17:49 | 2660887 TheSilverJournal
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Treasuries have negative real interest rates. Buyers of Treasuries are literally paying for the privilege to lend the US money. The lower yields go, the worse of a move it is to sell equities and buy dollars or Treasuries.

Sun, 07/29/2012 - 21:07 | 2661182 deflator
deflator's picture

 "Treasuries have negative real interest rates"

 UST's are the current bubble dujour, lower yields mean higher bond prices. U.S. government sanctioned speculators are chasing lower yields and higher bond prices.

 These sanctioned speculators are not buy and hold investors. The government sanctioned fixed income "banks"are glorified day traders.

Sun, 07/29/2012 - 22:06 | 2661328 TheSilverJournal
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Right, so the entire move into Treasuries is by traders. It's going to be one hellofa short squeeze when bond prices start collapsing. Once it starts, the end will come quick.

Sun, 07/29/2012 - 17:53 | 2660890 Tirpitz
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"Silver will outperform all asset classes."

Silver and NatGas. But currently the metals have the better charts.

Sun, 07/29/2012 - 18:04 | 2660920 TheSilverJournal
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The difficulty is in the US's ability to export NatGas. The best way to transport the stuff is through pipes. Turning it into LNG, shipping it overseas, and regassifying it really cuts into its exportability and limits its upside tremendously. 

Sun, 07/29/2012 - 21:37 | 2661289 RockyRacoon
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Uh, not really.  LPG is pipelined as a liquid, it's trucked or shipped by rail as a liquid.  It's not gassified until it's at the point of use.  Go out and look at that gas grill on your back deck.  If the U S has trouble exporting it's not because of its gas/liquid state.  Look elsewhere.

Sun, 07/29/2012 - 22:11 | 2661335 TheSilverJournal
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I'll look at pipelines being the cheapest way to transport natural gas. Thank you.

Mon, 07/30/2012 - 01:20 | 2661605 RockyRacoon
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You'll have to look at the right of way costs in that as well.  It's not cheap to get rights to lay the pipeline and the metering/pumping/forwarding stations.    The BTUHr cheating is rampant as well.   NatGas is rated and priced by the quality of the gas.   It's a deeply rooted racket.

Mon, 07/30/2012 - 04:39 | 2661675 Catequil
Catequil's picture

IMHO, if Draghi prints the immediate reaction will be risk-on hence DOW 15K, EURUSD 1.30 etc as it will be interpreted as supporting the EU economy. Eventually, EURUSD will fall back sub 1.20 longer term because of the printing. 

Sun, 07/29/2012 - 17:32 | 2660865 Boilermaker
Boilermaker's picture

How in the HELL do historical references have ANYTHING to do with what is happening in the markets today?

Please, tell me when this level of massive (and illegal) intervention has ever taken place.

Sun, 07/29/2012 - 17:58 | 2660901 Attitude_Check
Attitude_Check's picture

Because EVENTUALLY reality bites -- and will bite hard.  The question is how long until it does.

Sun, 07/29/2012 - 18:32 | 2660963 Boilermaker
Boilermaker's picture

Not if they are willing to shit can the currency. Which is exactly where this is going.

Sun, 07/29/2012 - 18:38 | 2660974 TheSilverJournal
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...and then reality will bite.

Sun, 07/29/2012 - 21:39 | 2661291 RockyRacoon
RockyRacoon's picture

This time really is different -- it's worse!

Sun, 07/29/2012 - 17:39 | 2660867 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

So another decade of accommidative monetary policy.  Sounds about right.  So how much inflation will that create?  What will the dollar be worth vs other assets in one decade?

Sun, 07/29/2012 - 20:00 | 2661104 JamesBond
JamesBond's picture

correct!  this financial fiasco can easily go on another decade.  

Sun, 07/29/2012 - 17:47 | 2660884 This is the end
This is the end's picture

I like how they count 1933-37 as a secular bull market?! If 1933-1937 counts as a bull market than so should 2003-2007 and 2009 - 2012! How do they break up the 1930s and not break up the 2000s. Makes no sense...

Sun, 07/29/2012 - 18:01 | 2660911 TheSilverJournal
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1933-1936, P/E tripled. In 2003-2007 or 2009-2012, P/E didn't even double. And obviously, because of the extremely destructive effects of artificially low rates, this bear market isn't over yet. Not to mention the fact that the US is long past broke and can only operate as long as rates stay extremely low, and the economy is extremely dependent on the Federal government's ability to borrow, print, and back mortgage, vehicle, and tuition debt markets.

Sun, 07/29/2012 - 18:21 | 2660947 Jumbotron
Jumbotron's picture

I like how they count 1933-37 as a secular bull market?! If 1933-1937 counts as a bull market than so should 2003-2007 and 2009 - 2012! How do they break up the 1930s and not break up the 2000s. Makes no sense...

Think of it this way.....whenever you have eaten something and it makes you queasy there is that chance that it will come back out.

The Bull Markets in the above cited cases all came about of malignant fiscal policies by the TPTB...both governmental and financial.  The Bear Markets had eaten those with nasty fiscal policies in place the bull markets "grew" inside the bear waiting to "vomit forth".

But the the end....swallowed it all back down until all the bad policies were digested.

Sun, 07/29/2012 - 17:52 | 2660892 saturn
saturn's picture

As long as we are all Japanese.

Sun, 07/29/2012 - 17:57 | 2660900 Goatboy
Goatboy's picture

Forecast line on first chart is really amusing and misguiding. 

Sun, 07/29/2012 - 18:25 | 2660956 TheSilverJournal
TheSilverJournal's picture

The downward slope should be much sharper.

Sun, 07/29/2012 - 18:49 | 2660995 Goatboy
Goatboy's picture

It should cover whole area from sharp leg down (what you said) to the currently existing line.

Sun, 07/29/2012 - 19:24 | 2661051 TheSilverJournal
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Believe me, I know where it's going. Once rates rise, the US goes bust and fiat currencies of broke countries collapse: tomorrow at the earliest and five years at the latest. The P/E ratio will get down to 5 at min. Housing to drop at least 75% in real terms. Gold to hit at least $10,000 in real terms. Silver to hit at least $1,000 in real terms. Oil to hit at least $300 in real terms. Interest rates to hit at least 25% The dollar to depreciate at least 90% over the next 5 years. US consumption to implode Asian consumption to explode, the US service sector to implode and Asia's service sector to explode, US manufacturing to explode and Asian manufacturing to level out, precious metals miners to explode (where they're not being nationalized), mining machineries to explode, natural gas line makers to explode, natural gas shippers to explode, the US to turn from an oil importer to an oil exporter. Lenders and those expecting to receive payments will be punished and borrowers and those expecting to make payments will be rewarded. Social security, medicare, medicaid, unemployment, food stamp, the defense, federal government employees, state government employees, and municipality employees will be canned, government contractors will be no more, Treasuries will be worthless and depositors won't be able to withdraw their money from their accounts, and US equities will lose at least 75% in real terms.


Sun, 07/29/2012 - 18:05 | 2660909 razorthin
razorthin's picture

Average PE is 8 at secular bear lows.  How long before the bear ends?  That only depends on central bank retards and their resolve to prop.  With propping, it will just keep equities range-bound at inflated levels while the $ caves and impoverishes the masses - masses that can no longer sustain the E in PE.  Therefore, this could be a 100 year bear or, theoretically, an infinite bear as P/E goes to infinity.

Sun, 07/29/2012 - 18:14 | 2660934 TheSilverJournal
TheSilverJournal's picture

The dollar based world fiat monetary system won't last through 100 years of being propped. I give it five years at the most, or the bond bubble, the greatest bubble in history, could pop tomorrow. How low could P/E go when fiat goes worthless and the government isn't able to provide credit through the printing press? 

Sun, 07/29/2012 - 18:22 | 2660949 Hype Alert
Hype Alert's picture

Market Liberalization Policies = Fail.  Is this the definition of normal courtesy of the IMF?

"Despite the large fluctuation in stock prices since 1991, this analysis indicates that the Zimbabwe Stock Exchange has been functioning quite consistently during this period."

I guess what this tells us is, in hind sight, the economist can simply explain away total monetary devastation.

Sun, 07/29/2012 - 18:42 | 2660980 vinu02
vinu02's picture

Ben and Super mario has change thing and market has moved away from crash

Sun, 07/29/2012 - 18:46 | 2660990 TheSilverJournal
TheSilverJournal's picture

What was their solution? Print more money?

Never heard of that one before.

Sun, 07/29/2012 - 18:58 | 2661000 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Earnings are too volatile.  Better to look at the dividend yield.  When it goes north of 6% you can be pretty sure that the end of the bear market is near.




Sun, 07/29/2012 - 20:04 | 2661109 JamesBond
JamesBond's picture

i'm no economist, but i have heard that recessions seem to end if GDP rises.....

Sun, 07/29/2012 - 18:58 | 2661008 XtraBullish
XtraBullish's picture

This is NOT a "bear market" - the bear ended in 2009 with the E/S at 666. Reflation is continuing non stop and that means higher stock prices - period.

Sun, 07/29/2012 - 19:05 | 2661023 Lucius Corneliu...
Lucius Cornelius Sulla's picture

It is a bear market until enough debt has been destroyed to quit being a drag on the economy.  Inflation is created by an expansion of the money supply.  The money supply is mainly comprised of credit.  Credit has stalled and will not expand until enough of it has been paid down or defaulted upon to get to a level where the economy can grow.  IMO, it will not happen until debt/GDP busts below 150.


Sun, 07/29/2012 - 19:49 | 2661086 RiverRoad
RiverRoad's picture

Yup, it will happen after Japan gets it's act together.........don't hang by your thumbs.

Sun, 07/29/2012 - 20:07 | 2661112 JamesBond
JamesBond's picture

for the first time, Japan had to sell bonds to make social security/retirement payments.  there doesn't seem to be an end in sight for the need to do this.  so, it's a slow bleed until they die all together.



Sun, 07/29/2012 - 19:24 | 2661050 RobotTrader
RobotTrader's picture

Gotta laugh at those Comstock Boys.  They were right for about 9 months out of the last 10 years.


But now we are back up to the highs.

Lots of famous reputations are now at stake.

Perhaps the biggest is Richard "Mother of All Tops" Russell, who has been banging on the bear drum for 10 years now, except the one time he admitted a "Dow Theory Buy Signal" in 2007 near the market top.

Lately, he's been calling for a market crash.

If he gets it wrong this time, then that is going to be 55 years of his reputation destroyed.

You are only as good as your last market call.

Sun, 07/29/2012 - 19:39 | 2661071 TheSilverJournal
TheSilverJournal's picture

Who cares how good somebody is. Just learn from them. It's the ideas that are  important, not the people. The question should be, "Why does he think there's a 55 year top?"

Personally, I won't bet against the market. To say equities will go down faster than the dollar is a scary proposition. Not to say that won't happen for a brief period, but the dollar is on the verge of getting decimated.

Sun, 07/29/2012 - 19:52 | 2661091 RiverRoad
RiverRoad's picture

Right.  Don't bet against the market:  Don't fight the Fed.

Mon, 07/30/2012 - 00:03 | 2661538 The Monkey
The Monkey's picture

I love to short the market, but now is definitely not the time.

Sun, 07/29/2012 - 23:58 | 2661536 The Monkey
The Monkey's picture

Or your last trade. Rule # 1) Never short in front of the Fed, especially when they have all but spelled it out for you.

Sun, 07/29/2012 - 19:51 | 2661090 tony bonn
tony bonn's picture

yes, dow 5000 is what i called for in 2008/2009....because that is the level at which i believed that valuations would reflect the purged crap on the balance sheets.....but no, the little frat boy punks at the banks wanted to save their bonuses, penthouses, whores, and bollinger on the backs of the little people....after all, that is what little people do.....

if the dow did not go to 5000, i predicted side way market moves for an indefinite period of time and that is essentially what the punks chose and installed in an indonesian in the whitehouse to continue to do their bidding after the murderer left office....the djia is still below its peak 5 years later.....if it surpasses that old mark soon, it will be courtesy of politician punk bailout money and printer money....there is still way too much mal-investment which requires liquidation....

Sun, 07/29/2012 - 23:36 | 2661478 Lucius Corneliu...
Lucius Cornelius Sulla's picture

I think the DJIA will drop 85% from its peak ... as it did the last time the economy was in a debt trap back in the 1930s.  Japan found itself in a similar situation and the Nikkei fell over 80% (so far).  DJIA $2,000.

Mon, 07/30/2012 - 00:02 | 2661537 The Monkey
The Monkey's picture

That will never, ever going to happen. If anyone is going to deflate it will be Europe. If anyone is going to hyperinflate, it will be the USA.

Sun, 07/29/2012 - 22:37 | 2661368 ZeroAvatar
ZeroAvatar's picture

I have been watching the Fred's Intelligent Bear Site-Inflation adjusted DJIA for years:


Mon, 07/30/2012 - 02:39 | 2661640 ebear
ebear's picture

Feh.  It's just a retrace.  The bull lives on!



Mon, 07/30/2012 - 03:34 | 2661658 fijisailor
fijisailor's picture

Maybe the FED will ease/ is already easing without letting anyone know, ie a secret easing program.  How do we know that is not going on?

Mon, 07/30/2012 - 05:53 | 2661696 dizzyfingers
dizzyfingers's picture

Out, out, out of the market.

Mon, 07/30/2012 - 06:28 | 2661708 mark7
mark7's picture

What bear market?! Dow Jones, DAX, FTSE all have been rising between 2009-2011, then short bearish trip to downside and then back again rising. Only real bearish market has been Spanish IBEX. French CAC and TPX in Japan have been essentially flat since 2010.

Mon, 07/30/2012 - 09:03 | 2661931 sessinpo
sessinpo's picture

"What bear market?"


That depends on your time perspective. Sure from 2009 to 2011. What if you expanded your time frame from early 2000. That's a lot of time with not much to show for it. But I digress because as I said, its a matter of your time perspective, thus no comparison is fair and all BS.


Mon, 07/30/2012 - 07:26 | 2661742 orangegeek
orangegeek's picture

First graph is analogous to primary wave 3 down.  We are just getting started folks.

Mon, 07/30/2012 - 07:48 | 2661779 falak pema
falak pema's picture

OT/ Here is a climate skeptic whose has changed sides and is now very bearish :

Muller: I'm an Ex-Climate Skeptic | Drudge Retort


The bears seem to be growing in all regions of the economy/ecology.

Anybody told that to Draghi and Ben B ?

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