Is the liquidity tide finally rushing out of Wall Street?

[jan777]

Here is an interesting article on the sub-prime lending and housing market and how it’s affecting Wall Street.

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Any comments?

[jan777]

oops sorry folks the web address is

http://www.sovereignsociety.com

[jan777]

oops sorry folks the web address is

http://www.sovereignsociety.com

[Chris Scoreboard Johnston]

I wonder what the reason tommorrow will be as to why the stock market is wrong to be climbing and all the experts that are missing the run are right about the end of the world.

It is tough to bet on these monster crashes, because in reality only one has ever happened ( 1929 ) so you are really betting against history. A correction is inevitable, and it could be sharp, but a crash is not going to happen.

My favorite post on this was the one where it said that the market was actually wrong, I do not recall who put that one up. Be clear on one thing, the market is always right, it is an individuals job to get in sync with it, be it up or down. If you are bearish you have simply been wrong up to this point. There are always illegal finacing or ridiculously leveraged financing deals going on with Wall Street. These funds are high risk/high reward, some of them are always going to go POOF!

[Chris Scoreboard Johnston]

I wonder what the reason tommorrow will be as to why the stock market is wrong to be climbing and all the experts that are missing the run are right about the end of the world.

It is tough to bet on these monster crashes, because in reality only one has ever happened ( 1929 ) so you are really betting against history. A correction is inevitable, and it could be sharp, but a crash is not going to happen.

My favorite post on this was the one where it said that the market was actually wrong, I do not recall who put that one up. Be clear on one thing, the market is always right, it is an individuals job to get in sync with it, be it up or down. If you are bearish you have simply been wrong up to this point. There are always illegal finacing or ridiculously leveraged financing deals going on with Wall Street. These funds are high risk/high reward, some of them are always going to go POOF!

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

The only thing I will add here is ,

There is only one rule on Wall Street,

NY Banks Win.

Invest on Wall Street at your own risk.

It’s same rule for Casino’s

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

The only thing I will add here is ,

There is only one rule on Wall Street,

NY Banks Win.

Invest on Wall Street at your own risk.

It’s same rule for Casino’s

[LA_Renter]

Chris, there is also a saying that “the market can stay irrational longer than you can stay solvent”. The Nasdaq wasn’t exactly correct when it climbed from 4000 to 5000 in 99/00. I was one of the people getting into sync with that market and i learned a lesson I will never forget. Markets can be wrong and always correct. I am sure you agree with that statement. Personally I don’t feel good about this run and I would like to point out that the bears aren’t all that wrong up to this point. We are all mesmerized by the current run in the stock market but the very bearish gold bugs are celebrating with everybody else. The price of gold pushed over 670 and could go on a run. There is something wrong with that. I keep hearing the term Goldlocks economy and this looks nothing like it. Here is one definition of where that term came from

‘Goldilocks was the nickname given to the soft-landing in 1995 that kicked off one of the biggest 5-year bull runs in the equity market in history. That soft landing consisted of a slowdown in growth along with a corresponding falling rate of inflation that allowed the Fed to ease, cushion the economy’s landing and thereby avoid a recession.

The result back in 1995 was that commodities turned down despite economic growth continuing at a healthy, yet slower pace in the US. Corporate profit growth continued to rise. Long-term interest rates followed the Fed’s lead and fell, and earnings multiples on equities expanded as the Fed lowered interest rates and made money “cheaper.” The resulting positive financial flows into the equity market and bond market also helped to rally the dollar, as dollars from overseas were “re-invested” back into US financial assets. It truly was a Hollywood-ending”

Now contrast that with today, the dollar is at a 30 year low (dangerously testing 80 super support), gold has pushed over 670, we have $75 oil, and a gallon of milk cost over $4. Check out this link to see what the stock market looks like adjusted for today’s dollars and gold.

http://www.kitco.com/ind/B_Hunt/jun052007.html

Now what the markets seem to be telling us right now is that we have inflation. When you have gold bugs over in the corner clicking champagne glasses exactly how much of a bull market is this??

[LA_Renter]

Chris, there is also a saying that “the market can stay irrational longer than you can stay solvent”. The Nasdaq wasn’t exactly correct when it climbed from 4000 to 5000 in 99/00. I was one of the people getting into sync with that market and i learned a lesson I will never forget. Markets can be wrong and always correct. I am sure you agree with that statement. Personally I don’t feel good about this run and I would like to point out that the bears aren’t all that wrong up to this point. We are all mesmerized by the current run in the stock market but the very bearish gold bugs are celebrating with everybody else. The price of gold pushed over 670 and could go on a run. There is something wrong with that. I keep hearing the term Goldlocks economy and this looks nothing like it. Here is one definition of where that term came from

‘Goldilocks was the nickname given to the soft-landing in 1995 that kicked off one of the biggest 5-year bull runs in the equity market in history. That soft landing consisted of a slowdown in growth along with a corresponding falling rate of inflation that allowed the Fed to ease, cushion the economy’s landing and thereby avoid a recession.

The result back in 1995 was that commodities turned down despite economic growth continuing at a healthy, yet slower pace in the US. Corporate profit growth continued to rise. Long-term interest rates followed the Fed’s lead and fell, and earnings multiples on equities expanded as the Fed lowered interest rates and made money “cheaper.” The resulting positive financial flows into the equity market and bond market also helped to rally the dollar, as dollars from overseas were “re-invested” back into US financial assets. It truly was a Hollywood-ending”

Now contrast that with today, the dollar is at a 30 year low (dangerously testing 80 super support), gold has pushed over 670, we have $75 oil, and a gallon of milk cost over $4. Check out this link to see what the stock market looks like adjusted for today’s dollars and gold.

http://www.kitco.com/ind/B_Hunt/jun052007.html

Now what the markets seem to be telling us right now is that we have inflation. When you have gold bugs over in the corner clicking champagne glasses exactly how much of a bull market is this??

[kewp]

I’ll agree the market is always right. It’s not surprising in the least that the declining dollar is pushing up the various indices in the absence of any solid fundamentals. Unfortunately, due to that inflation the actual real value of the market is less than Y2K levels.

So yeah, the Dow soars to record highs, but not enough to keep up with the cost of energy, food and basic goods. Funny that!

I’ll agree that I don’t see a 1929 like event happening again (at least, I hope not). We have better checks and balances now.

[kewp]

I’ll agree the market is always right. It’s not surprising in the least that the declining dollar is pushing up the various indices in the absence of any solid fundamentals. Unfortunately, due to that inflation the actual real value of the market is less than Y2K levels.

So yeah, the Dow soars to record highs, but not enough to keep up with the cost of energy, food and basic goods. Funny that!

I’ll agree that I don’t see a 1929 like event happening again (at least, I hope not). We have better checks and balances now.

[hipmatt]

Getting into a savings account in Canadian dollars about six months ago, and you would be doing just as well as investing in the dow or s&p 500 right now.

There are many more “safer” investments that have outperformed the dow, but you never hear about it. I wonder if these people are getting it wrong?

As the dow makes nominal gains that impress everyone, the same dollars they are spending are loosing purchasing power just as fast. Not exactly an economy worth bragging about.

[hipmatt]

Getting into a savings account in Canadian dollars about six months ago, and you would be doing just as well as investing in the dow or s&p 500 right now.

There are many more “safer” investments that have outperformed the dow, but you never hear about it. I wonder if these people are getting it wrong?

As the dow makes nominal gains that impress everyone, the same dollars they are spending are loosing purchasing power just as fast. Not exactly an economy worth bragging about.

[Coronita]

Don’t know where the thing is really headed. but to me, if you go against the grain by shorting the entire market, it seems like you have way to many forces going against you. Shorting individual stocks probably works if you know what your doing. But shorting the entire markets with these new reverse indexes, I’m not so sure.

[Coronita]

Don’t know where the thing is really headed. but to me, if you go against the grain by shorting the entire market, it seems like you have way to many forces going against you. Shorting individual stocks probably works if you know what your doing. But shorting the entire markets with these new reverse indexes, I’m not so sure.

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