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QUOTE (NorthSideSox72 @ Aug 25, 2009 -> 05:59 PM)
Only the third one is true. First one did indeed happen, two rounds of them, and I've seen them closed in town. Another round may come though. Second one already partially happened, and likely will get worse, but supports will be there for development too, so it won't be as horrible as the broader crash was.

 

Inflation, though, I'm right with you there. When the economy does kick back up in a year or two, inflation will go up big, IMO.

Its why now is a very good time to buy a house if you can. Get a great rate locked in before inflation hits. Of course than you have a whole nother potential issue that will keep the housing prices very stagnant for a long time because people won't look to move due to the cost of financing.

 

It will be an interesting next 10 years, imo.

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I've done very well in the market overall (I've been investing just under 10 years), but since the start of this year, I'm up 26.03%.

 

I'm a boring investor, though. I use a modified buy/hold and sell on big gains system, where I buy something and hold it, if it ever goes up enough, I'll sell just enough shares to get my initial money back out of it an diversify that money elsewhere. If it doesn't go up enough, I'll just hold it. I never sell out an entire position, either.

 

Fundamentals mean everything to me, as I own very few stocks that do not pay dividends, and the ones that do I need to see that their dividend is sustainable. I also do not like investing in companies that carry too much debt/do not have the cash/cash flow to pay it off.

 

 

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QUOTE (southsider2k5 @ Aug 27, 2009 -> 09:59 PM)
That's just it. You can't separate out one thing or another. Economics is a total package. Picking out just the good isn't really an equal sounding board, its just being a fanboy.

 

nor is picking out the bad.

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QUOTE (jasonxctf @ Aug 27, 2009 -> 09:07 PM)
nor is picking out the bad.

 

History makes me a pessimist. If you can pick out some historical president for sustained stock market rallies in these sorts of economic conditions, I'd love to hear them.

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QUOTE (southsider2k5 @ Aug 27, 2009 -> 10:25 PM)
History makes me a pessimist. If you can pick out some historical president for sustained stock market rallies in these sorts of economic conditions, I'd love to hear them.

One thing to bear in mind when comparing now to before, is that in more modern times, at increasing levels over time, the markets price-in future events faster and more fully. The market has jumped further ahead of the economic event curve. This run-up is in anticipation of their most favored likely scenario - that we are leveling, and probably looking at a slow growth beginning this winter and into next year, with employment leveling and getting better sometime first half of next year.

 

Keep in mind also, that the drop in late 2008 was massive, even in some ways dwarfing the biggest long-term drops ever. People took their money out. Now, per an article I just read (WSJ or Crains, I can't remember which), people are getting back into contributing heavier in 401k's and IRA's again. That institutional bump is also probably a factor here.

 

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QUOTE (NorthSideSox72 @ Aug 28, 2009 -> 07:37 AM)
Keep in mind also, that the drop in late 2008 was massive, even in some ways dwarfing the biggest long-term drops ever. People took their money out. Now, per an article I just read (WSJ or Crains, I can't remember which), people are getting back into contributing heavier in 401k's and IRA's again. That institutional bump is also probably a factor here.

 

To reiterate -- this is a very important fact that a lot of people don't realize.

 

The US S&P 500 figures have seen a drop of 41 percent [2008] which is huge and definitely one of the worst considering that the biggest yearly drop ever was in 1931 during the Great Depression when the S&P dropped by 47.1 percent.

 

In comparison, the inflated numbers of the modern S&P dwarf that of where it was in 1931, so just numbers wise, a 41% decline was massive.

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Just coming across my desk...

 

Upward Revision in Q3 U.S. Growth

 

We are revising upward our forecast for third quarter growth in the U.S. by a full percentage point, from an estimated 2.8% to 3.8%. This is a swing of four full percentage points from -1% in the second quarter. While this continues to be subpar growth in an economic recovery, it is far better than the consensus expectation not too long ago. A number of factors have contributed to the uptick.

 

Housing, of course, is an important factor as the longstanding contraction in residential construction is dissipating and may well turn positive later this year through 2010. We estimate that auto sales, thanks to the cash-for-clunkers program, will add one percentage point to third quarter growth as sales surged and the automakers announced production increases in the U.S. to restock exceptionally low inventories. This will add to personal income as overtime pay rises and some laid off workers are called back.

 

Other fiscal stimulus measures are also contributing to growth, such as the first-time homebuyer tax credit and infrastructure spending. The infrastructure spending boost kicks in more strongly next year and lower-than-expected costs of these projects are increasing the number of projects and the labour demanded, boosting the bang for the buck.

 

Inventory depletion had an enormous negative impact on Q2 growth. Inventory replenishment of material inputs and finished goods will boost Q3 GDP even with relatively modest buying by wholesalers and retailers for the back-to-school and Christmas seasons. Private sector spending incentives will boost consumer demand for items such as appliances and baby items. For example, Toys “R” Us launched its own cash-for-clunkers-type program, baby style. Toys “R” Us is offering customers the chance to trade-in used cribs, car seats, high chairs and strollers in exchange for a 20% discount on selected items. The three-week program begins today with no limit to the number of products turned in. Even day-care centres are welcome to ‘trade-in’ all of their baby items. Initially, the program is limited to the U.S., but the company says it may offer it in Canada depending on its success. Other customer incentive programs are also popping up for many products including travel, gasoline and luxury goods. Even many of the U.S. airlines are enhancing their frequent flier programs, and Neiman Marcus, the high-end department store that has suffered 25% year-over-year revenue declines, has introduced free shipping to Canada even on highly discounted items.

 

Tax credits for ‘green’ renovations are also a stimulant and as corporate earnings improve, we might even see businesses jump on the spending bandwagon. None of this erases the still-dismal jobs picture or households’ need to build their much-eroded wealth. It’s just that the enormous liquidity poured into the economy, low interest rates and fiscal stimulants combine to push the growth outlook to stronger levels than once feared. It will still be a moderate long recovery period, but with no inflation worries for at least the next year, it could well be stronger than expected.

 

 

Dr. Sherry Cooper

Executive Vice-President, Global Economic Strategist, BMO Financial Group

Chief Economist, BMO Capital Markets & BMO Nesbitt Burns

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QUOTE (NorthSideSox72 @ Aug 28, 2009 -> 07:37 AM)
One thing to bear in mind when comparing now to before, is that in more modern times, at increasing levels over time, the markets price-in future events faster and more fully. The market has jumped further ahead of the economic event curve. This run-up is in anticipation of their most favored likely scenario - that we are leveling, and probably looking at a slow growth beginning this winter and into next year, with employment leveling and getting better sometime first half of next year.

 

Keep in mind also, that the drop in late 2008 was massive, even in some ways dwarfing the biggest long-term drops ever. People took their money out. Now, per an article I just read (WSJ or Crains, I can't remember which), people are getting back into contributing heavier in 401k's and IRA's again. That institutional bump is also probably a factor here.

 

I don't buy the modern bias anymore. It wasn't too long ago that people believed that the market has gotten so effecient at pricing in information, that a negative PE could be interpreted as a good thing. 10 years later over 90% of the dotcoms are busts or buyouts. I still believe in history and understanding what the numbers are telling you, and why they are saying what they are.

 

The housing market has all of the signs of a deadcat bounce. Unemployment is still rising, as is the hidden unemployment of people who either have been taken off of the official roles because they have exhausted their benefits, or have taken much less paying/part time work out of desparation. The other big factor in homebuying is ease of credit, and that hasn't really changed that much in the last 10 months or so either. Also remember that employment lags confidence in the system by 6-12 months, and foreclosures also lag unemployment by about the same margin. There is still a large chunk of supply that hasn't come onto the housing market, not to mention, much like the hidden auto demand, there is also the hidden housing supply of people who want to sell their houses, but feel that they can't for one reason or another (worried about losing job, upside down on loan, houses not selling in area so not trying, etc). Even if hiring really did take off today, it would be a year to two years before you could really point to a true housing recovery.

 

More numbers I have seen bantered around as proof are the durable goods and GDP revisions... This is pretty simple stuff to explain away as well. The two biggest components in durable goods are airplanes and autos. Autos numbers being reported are in the midst of the cash for clunkers bounce. Once you remove auto numbers from durable goods, that number becomes near zero growth. That same growth is also responsible for a good chunk of GDP growth. Remember, no one seemed to be able to forecast how successful this program would be, which means it wasn't factored in as "expected" in any of the growth figures for Q3. Now moving on to Q4 you have removed pretty much all automotive demand from this system, both pent up demand and the future demand from people who realized that this was the best deal they were going to ever see, so they moved and took delivery sooner than they probably would have. As for other durables, people who are employed and able to buy are also still scared of losing their jobs, as unemployment is still increasing. If you are scared of losing your job, you aren't going to run out and spend savings money to buy a new fridge or TV unless you have to do so. The proof here is that savings rates in the US are still at levels we haven't seen in decades, and again, even the slight dip in the number can be explained by the artificial demand of cash for clunkers spending.

 

I also saw your point about articles of people investing in the stock market, but I am still reading articles about people who are afraid to invest in the same market, in other, less market biased media outlets. The Sunday Tribune just had one.

 

Finally I really believe that we have to see unemployment take a real turn before I will believe actual growth is coming. The fundementals of the markets have to change, and not just by artificial government means. For all of those auto sales, does anyone think any jobs are going to be saved? That is the question we should be asking. Until jobs come back for real (not just accounting tricks brought on by people who can't file for benefits anymore, or are working part time/at a fraction of former salaries.) we aren't going to sustain anything. History bears this out, not just me.

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QUOTE (southsider2k5 @ Aug 28, 2009 -> 09:45 AM)
I don't buy the modern bias anymore. It wasn't too long ago that people believed that the market has gotten so effecient at pricing in information, that a negative PE could be interpreted as a good thing. 10 years later over 90% of the dotcoms are busts or buyouts. I still believe in history and understanding what the numbers are telling you, and why they are saying what they are.

 

The housing market has all of the signs of a deadcat bounce. Unemployment is still rising, as is the hidden unemployment of people who either have been taken off of the official roles because they have exhausted their benefits, or have taken much less paying/part time work out of desparation. The other big factor in homebuying is ease of credit, and that hasn't really changed that much in the last 10 months or so either. Also remember that employment lags confidence in the system by 6-12 months, and foreclosures also lag unemployment by about the same margin. There is still a large chunk of supply that hasn't come onto the housing market, not to mention, much like the hidden auto demand, there is also the hidden housing supply of people who want to sell their houses, but feel that they can't for one reason or another (worried about losing job, upside down on loan, houses not selling in area so not trying, etc). Even if hiring really did take off today, it would be a year to two years before you could really point to a true housing recovery.

 

More numbers I have seen bantered around as proof are the durable goods and GDP revisions... This is pretty simple stuff to explain away as well. The two biggest components in durable goods are airplanes and autos. Autos numbers being reported are in the midst of the cash for clunkers bounce. Once you remove auto numbers from durable goods, that number becomes near zero growth. That same growth is also responsible for a good chunk of GDP growth. Remember, no one seemed to be able to forecast how successful this program would be, which means it wasn't factored in as "expected" in any of the growth figures for Q3. Now moving on to Q4 you have removed pretty much all automotive demand from this system, both pent up demand and the future demand from people who realized that this was the best deal they were going to ever see, so they moved and took delivery sooner than they probably would have. As for other durables, people who are employed and able to buy are also still scared of losing their jobs, as unemployment is still increasing. If you are scared of losing your job, you aren't going to run out and spend savings money to buy a new fridge or TV unless you have to do so. The proof here is that savings rates in the US are still at levels we haven't seen in decades, and again, even the slight dip in the number can be explained by the artificial demand of cash for clunkers spending.

 

I also saw your point about articles of people investing in the stock market, but I am still reading articles about people who are afraid to invest in the same market, in other, less market biased media outlets. The Sunday Tribune just had one.

 

Finally I really believe that we have to see unemployment take a real turn before I will believe actual growth is coming. The fundementals of the markets have to change, and not just by artificial government means. For all of those auto sales, does anyone think any jobs are going to be saved? That is the question we should be asking. Until jobs come back for real (not just accounting tricks brought on by people who can't file for benefits anymore, or are working part time/at a fraction of former salaries.) we aren't going to sustain anything. History bears this out, not just me.

 

1. "other less biased media outlets"? Than WSJ and Crain's? WTF?

 

2. The housing market has all the signs of a dead cat, because it has all the signs of hitting a floor. That's why everything we're seeing now is positive. There will probably be one more dip, or a leveling, into early next year, as the tax incentives wear off, but that's expected and not a bad thing at all. The only two things that are really worriesome for the next year or two in housing are increased unemployment (which we'll probably see at least a little bit of), and the looming inflation issue's effects on mortgage rates. And those are definitely big. But I think the overall strength is building - and we'd likely see a slow, choppy rise over the next few years. Downticks as rates go up and employment goes down, upticks when employment goes up again.

 

3. As for history bearing you out about unemployment, that is only partially true. Its always the laggard. Economic growth needs people to have jobs, but typically the growth starts around when unemployment tops, not after. Then they move in concert. That's why the market has priced in some spiky growth next 2 quarters, but sustained, more predictable growth next year.

 

Inflation is the scary monster next year, IMO. That is the biggest X factor in how quickly we recover, or if we dip deeply again, in 2010.

 

 

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QUOTE (NorthSideSox72 @ Aug 28, 2009 -> 09:55 AM)
1. "other less biased media outlets"? Than WSJ and Crain's? WTF?

 

2. The housing market has all the signs of a dead cat, because it has all the signs of hitting a floor. That's why everything we're seeing now is positive. There will probably be one more dip, or a leveling, into early next year, as the tax incentives wear off, but that's expected and not a bad thing at all. The only two things that are really worriesome for the next year or two in housing are increased unemployment (which we'll probably see at least a little bit of), and the looming inflation issue's effects on mortgage rates. And those are definitely big. But I think the overall strength is building - and we'd likely see a slow, choppy rise over the next few years. Downticks as rates go up and employment goes down, upticks when employment goes up again.

 

3. As for history bearing you out about unemployment, that is only partially true. Its always the laggard. Economic growth needs people to have jobs, but typically the growth starts around when unemployment tops, not after. Then they move in concert. That's why the market has priced in some spiky growth next 2 quarters, but sustained, more predictable growth next year.

 

Inflation is the scary monster next year, IMO. That is the biggest X factor in how quickly we recover, or if we dip deeply again, in 2010.

 

1.Crains and WSJ do their best business when markets are good. Its the same reason CNBC is a market cheerleader.

 

2. That is the argument in a nutshell. Personally I am not sticking my finger into that bottom yet. I don't believe that the fundementals are ready yet.

 

3. This recession is a bit different because of the confidence factor. The worse things are, the more scared people get, and the longer it will take them to wade back into the spending pool. I don't believe that confidence will really return to the system until people are working and aren't in fear of losing their jobs. That hasn't happened yet.

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QUOTE (NorthSideSox72 @ Aug 28, 2009 -> 02:55 PM)
Inflation is the scary monster next year, IMO. That is the biggest X factor in how quickly we recover, or if we dip deeply again, in 2010.

 

what did you think of the Chief Economist's take on that in the article above?

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QUOTE (southsider2k5 @ Aug 28, 2009 -> 10:01 AM)
1.Crains and WSJ do their best business when markets are good. Its the same reason CNBC is a market cheerleader.

 

2. That is the argument in a nutshell. Personally I am not sticking my finger into that bottom yet. I don't believe that the fundementals are ready yet.

 

3. This recession is a bit different because of the confidence factor. The worse things are, the more scared people get, and the longer it will take them to wade back into the spending pool. I don't believe that confidence will really return to the system until people are working and aren't in fear of losing their jobs. That hasn't happened yet.

I can't believe you put CNBC and WSJ/Crain's business writing in the same sentence.

 

As for a bottom, I'm not suggesting we all try to find an exact point. I'm saying that all indications at this point is that we are in the territory of a floor.

 

Confidence is indeed huge. But I think its interesting that when Obama goes on the tube and says things are still tough but we're seeing signs of recover, het gets blasted for it. For one thing, he's right. For another, it is hugely important to the country that the President try to promote those positives, as long as he doesn't extend into true falsehoods. That confidence can come in part from these things being highlighted.

 

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QUOTE (jasonxctf @ Aug 28, 2009 -> 10:03 AM)
what did you think of the Chief Economist's take on that in the article above?

I think its interesting that they just make a small, one sentence mention of "no inflation worries for the next year". I'm not sure I agree, but more importantly, it ignores the factors that point to potential for serious inflation problems starting next year, then building.

 

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QUOTE (NorthSideSox72 @ Aug 28, 2009 -> 10:10 AM)
I can't believe you put CNBC and WSJ/Crain's business writing in the same sentence.

 

As for a bottom, I'm not suggesting we all try to find an exact point. I'm saying that all indications at this point is that we are in the territory of a floor.

 

Confidence is indeed huge. But I think its interesting that when Obama goes on the tube and says things are still tough but we're seeing signs of recover, het gets blasted for it. For one thing, he's right. For another, it is hugely important to the country that the President try to promote those positives, as long as he doesn't extend into true falsehoods. That confidence can come in part from these things being highlighted.

 

Trust me I understand the President's role as Chief Cheerleader. I actually was much more upset when he was talking the market down, versus talking it up. But it is much different to argue fundamentals versus cheerleading. I have no problem with what he is saying, because that is his job. It doesn't mean I believe it, because as you can see, I have some very valid technical and economic reasons for not believing.

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QUOTE (Y2HH @ Aug 27, 2009 -> 05:34 PM)
I've done very well in the market overall (I've been investing just under 10 years), but since the start of this year, I'm up 26.03%.

 

I'm a boring investor, though. I use a modified buy/hold and sell on big gains system, where I buy something and hold it, if it ever goes up enough, I'll sell just enough shares to get my initial money back out of it an diversify that money elsewhere. If it doesn't go up enough, I'll just hold it. I never sell out an entire position, either.

 

Fundamentals mean everything to me, as I own very few stocks that do not pay dividends, and the ones that do I need to see that their dividend is sustainable. I also do not like investing in companies that carry too much debt/do not have the cash/cash flow to pay it off.

 

 

So the financials are out.

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U.S. double-dip recession "out of the question": ECRI

On Friday August 28, 2009, 10:30 am EDT

 

NEW YORK (Reuters) - A weekly measure of future U.S. economic growth slipped in the latest week, though its yearly growth rate surged to a 38-year high that suggests chances of a double-dip recession are slim.

 

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index for the week to August 21 fell to 124.4 from a downwardly revised 124.9 the prior week, which was originally reported at 125.0.

 

But the index's annualized growth rate soared to a 38-year high of 19.6 percent from a downwardly revised 17.4 percent the prior week, a number which was originally 17.5 percent.

 

It was the WLI's highest yearly growth rate reading since the week to May 28, 1971, when it stood at 20.5 percent.

 

"With WLI growth continuing to surge through late summer, a double dip back into recession in the fourth quarter is simply out of the question," said ECRI Managing Director Lakshman Achuthan, reinstating the group's recent warning to ignore negative analyst projections.

 

He added that the index was pulled down this week due to higher interest rates.

 

Achuthan has recently projected that the recovery is moving at a stronger pace than any the United States has seen since the early 1980s.

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QUOTE (NorthSideSox72 @ Aug 28, 2009 -> 07:37 AM)
One thing to bear in mind when comparing now to before, is that in more modern times, at increasing levels over time, the markets price-in future events faster and more fully. The market has jumped further ahead of the economic event curve. This run-up is in anticipation of their most favored likely scenario - that we are leveling, and probably looking at a slow growth beginning this winter and into next year, with employment leveling and getting better sometime first half of next year.

 

Keep in mind also, that the drop in late 2008 was massive, even in some ways dwarfing the biggest long-term drops ever. People took their money out. Now, per an article I just read (WSJ or Crains, I can't remember which), people are getting back into contributing heavier in 401k's and IRA's again. That institutional bump is also probably a factor here.

 

 

The mkt has a memory and OFTEN REPEATS. Overlay the recent daily charts with 29-30 37-38 etc. and it gives you an idea as to where we can go from here. Speculation is observation..It is not the news itself that moves mkts, its the reaction to the news. Sometimes you do not need a news event at all. The mkt will roll over on its own weight.

 

Right now I would be looking to outright short the mkt near 1044.73 to be exact, in the SPX cash. Use 1120 as a stop.

 

Mkts have a tendency to revert back to where they started, and if that is the case with this one we have a ways to go before we hit the bottom. Like a little more than 50% from here. Over500 SPX points. That is a little over 5000 dow points. Not saying it will happen now, but it could happen in the next 12-24 months.

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QUOTE (NorthSideSox72 @ Aug 28, 2009 -> 09:55 AM)
1. "other less biased media outlets"? Than WSJ and Crain's? WTF?

 

2. The housing market has all the signs of a dead cat, because it has all the signs of hitting a floor. That's why everything we're seeing now is positive. There will probably be one more dip, or a leveling, into early next year, as the tax incentives wear off, but that's expected and not a bad thing at all. The only two things that are really worriesome for the next year or two in housing are increased unemployment (which we'll probably see at least a little bit of), and the looming inflation issue's effects on mortgage rates. And those are definitely big. But I think the overall strength is building - and we'd likely see a slow, choppy rise over the next few years. Downticks as rates go up and employment goes down, upticks when employment goes up again.

 

3. As for history bearing you out about unemployment, that is only partially true. Its always the laggard. Economic growth needs people to have jobs, but typically the growth starts around when unemployment tops, not after. Then they move in concert. That's why the market has priced in some spiky growth next 2 quarters, but sustained, more predictable growth next year.

 

Inflation is the scary monster next year, IMO. That is the biggest X factor in how quickly we recover, or if we dip deeply again, in 2010.

 

 

Even scarier is DEFLATION.

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QUOTE (jasonxctf @ Aug 28, 2009 -> 10:51 AM)
U.S. double-dip recession "out of the question": ECRI

On Friday August 28, 2009, 10:30 am EDT

 

NEW YORK (Reuters) - A weekly measure of future U.S. economic growth slipped in the latest week, though its yearly growth rate surged to a 38-year high that suggests chances of a double-dip recession are slim.

 

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index for the week to August 21 fell to 124.4 from a downwardly revised 124.9 the prior week, which was originally reported at 125.0.

 

But the index's annualized growth rate soared to a 38-year high of 19.6 percent from a downwardly revised 17.4 percent the prior week, a number which was originally 17.5 percent.

 

It was the WLI's highest yearly growth rate reading since the week to May 28, 1971, when it stood at 20.5 percent.

 

"With WLI growth continuing to surge through late summer, a double dip back into recession in the fourth quarter is simply out of the question," said ECRI Managing Director Lakshman Achuthan, reinstating the group's recent warning to ignore negative analyst projections.

 

He added that the index was pulled down this week due to higher interest rates.

 

Achuthan has recently projected that the recovery is moving at a stronger pace than any the United States has seen since the early 1980s.

 

 

How about a double dip happening next year? Sounds like CYA. He can say, "Well I said it wouldn't happen in the 4th qtr, not 2010."

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Another thing to keep in mind : redemption notices have to be in by next week for customers of hedge/mutual funds. So the heavy tape today could be sales lining up into next week. Methinks people will ring the register with some nice profits in the second quarter and see what the third brings.

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QUOTE (Cknolls @ Aug 28, 2009 -> 11:19 AM)
Taking out yesterday's lows should give us 1008 today.

 

 

I should also add closing below yesterday's lows on a Friday close will make me add to my shorts.

 

 

 

If anyone was around in 1987 remember how cheap calls were. No one could figure out why they were so cheap when stocks looked SO good and weren't going down.

 

Well calls are cheap now and no one can figure out why when stocks look SO good and they aren't going down.

 

 

 

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This "stimulus" was and is not designed for a job recovery. It's simply to boost GDP to make it look artificially like they are doing something. See 3rd Qtr GDP (most bounce will occur from cash for clunkers). Media: Yea, STIMULUS IS WORKING!.

 

What a lot of you people don't understand: these companies are not going to hire people back. Not nearly as much as they have cut. The management realizes that they can do the same with less, drive people like slave labor (read: middle management works 60-70 hours a week to take up the slack of "cuts" but at least you people have a job!!). This will not change for a long time. Aka, jobless recovery - which then means you don't have a long term recovery - you can't without private sector jobs. And again, that was never the intent of the "stimulus".

 

 

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QUOTE (jasonxctf @ Aug 28, 2009 -> 10:51 AM)
U.S. double-dip recession "out of the question": ECRI

On Friday August 28, 2009, 10:30 am EDT

 

NEW YORK (Reuters) - A weekly measure of future U.S. economic growth slipped in the latest week, though its yearly growth rate surged to a 38-year high that suggests chances of a double-dip recession are slim.

 

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index for the week to August 21 fell to 124.4 from a downwardly revised 124.9 the prior week, which was originally reported at 125.0.

 

But the index's annualized growth rate soared to a 38-year high of 19.6 percent from a downwardly revised 17.4 percent the prior week, a number which was originally 17.5 percent.

 

It was the WLI's highest yearly growth rate reading since the week to May 28, 1971, when it stood at 20.5 percent.

 

"With WLI growth continuing to surge through late summer, a double dip back into recession in the fourth quarter is simply out of the question," said ECRI Managing Director Lakshman Achuthan, reinstating the group's recent warning to ignore negative analyst projections.

 

He added that the index was pulled down this week due to higher interest rates.

 

Achuthan has recently projected that the recovery is moving at a stronger pace than any the United States has seen since the early 1980s.

 

"out of the question" is something no one should ever say when projecting a market. Its asking for trouble, and makes me question this source.

 

QUOTE (Cknolls @ Aug 28, 2009 -> 11:02 AM)
The mkt has a memory and OFTEN REPEATS. Overlay the recent daily charts with 29-30 37-38 etc. and it gives you an idea as to where we can go from here. Speculation is observation..It is not the news itself that moves mkts, its the reaction to the news. Sometimes you do not need a news event at all. The mkt will roll over on its own weight.

 

Right now I would be looking to outright short the mkt near 1044.73 to be exact, in the SPX cash. Use 1120 as a stop.

 

Mkts have a tendency to revert back to where they started, and if that is the case with this one we have a ways to go before we hit the bottom. Like a little more than 50% from here. Over500 SPX points. That is a little over 5000 dow points. Not saying it will happen now, but it could happen in the next 12-24 months.

 

 

QUOTE (Cknolls @ Aug 28, 2009 -> 11:10 AM)
Even scarier is DEFLATION.

 

 

Your predictions tend to be dire on this board, usually well outside what most others predict, and this is no exception. Dow 5000? Deflation? I find these to be incredibly unliklely scenarios based on all the economic data out there, as well as market history.

 

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QUOTE (NorthSideSox72 @ Aug 28, 2009 -> 11:48 AM)
"out of the question" is something no one should ever say when projecting a market. Its asking for trouble, and makes me question this source.

 

Your predictions tend to be dire on this board, usually well outside what most others predict, and this is no exception. Dow 5000? Deflation? I find these to be incredibly unliklely scenarios based on all the economic data out there, as well as market history.

 

Yes, and us Kappies do not like being forced to agree with NorthSideSox72, but you've left me no choice...

 

I think a little part of me just died.

 

Thanks a lot. :/

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