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Latest Comments179 Comments
Banks Are Yet Again Under Pressure
Lend them the money with some compensation /wage restrictions.
This is not the time to philosophise as the markets are unstable.
Continue with injecting liquidity(TARP) ,lower the FF to zero and impose six months moratorium on shorts .
This will allow the implemented measures to work without the speculative distractions.
On June 3,2005 I have said the following in an interview with Mark Gilbert(Bloomberg -London)."All of the economic forces point to a dramatic slowdown ahead which will turn into a serious recession,with almost no tools left to abort that possibility".
Now I have to listen to "experts" that this economic upheaval was unpredictable.
The implemented measures will contribute to the economic rebound but speculators must be stopped from udermining unprecedented effort at rejuvenating the eeconomy.
The SEC should impose moratorium on "shorts" immiediately.
JPMorgan: Expect Fed to Cut to 0% in January
At this stage we require a combination of approaches in one package.
Fed should lower the FF to zero immiediately.
Effective allocation of the 350 billion dollars left in TARP should continue -that includes the 25 billion dollars for the auto industry.
In addition ,the SEC should reimpose the restriction on establishing the short positions (stocks).
The implemented measures will work ,but some time is needed.
To allow speculators to exacerbate intermiitent psychological risks is to negate the measures in place thatb are potential jet fuel for the economy.
Will Berkshire Lose Its Triple-A?
Will GE lose AAA rating?it doe4s not matter ,the GE's stock has been unjustifiably decimated ,reflection of the market Armageddon. which is well divesrified .
The real issue is why does any entity still writes the CDS's as the risk is demoralized investor without the ability to quantify the real risks (which are acceptable after the major market adjustment).
The other issue is ,why do I get on my PC ,a pictorial pop-out of Mr.Salomon-I already know that he iswrong.
General Electric: Genuine Risk of Collapse?
It has an exposure to consumer goods sector ,military sector and financial sector exposure as well.
Ge got cought in the financial squeeze just as any other company did due to mass paranoia.
As the issues facing corporate America and companies outside the U.S are being effectively addressed ,GE is in a better position than most companies to recover.
There is no point in addressing day to day flactuations.
The Stock Market Is Not the U.S. Economy
Asa result of unprecedeted economic dislocation,the leading indicator (the stock market) is sometimes a confusing leader(market volatility).
The investment community must simply evaluate the global scale of intervention attempting to stabilize financial sector and economy in general.
Clearly (allowing for the multiplier),the global "intervention&quo... is unprecedented and will succed in precipitating a global economic/market rebound led by the the U.S .
By mid 2009 ,the magnitude of the U.S economic rebound will surprise the biggest bulls(if there are any left).
Some of the individual market rallies will redefine the word "Bull".
20,000 DowJones is a reality in the period ahead.
Now ,let me hear from the peanut gallery dicussing the end of the universe scenario.
Bush's Peculiar Wall Street Speech
Bush's Peculiar Wall Street Speech
The implemented policies and the global cooperation in addressing the perceived debacles will work effective andwill create a dynamic economic/market rebound .
Thwe warnings ? should have been issued a year ago -I did .
Now the nonsense from the peanut gallery will not stop unprecedented rebound in the period ahead .
Now ,let's hear another end of the iniverse story from the author.
Contrarian Investing
Higher rates,renewed wariness among indebted consumers ,and continued recycling of dollars into Treasuries by investors will help drive down yields.
Then I have said "All of the economic forces point to a dramatic slowdown ahead which will turn into a serious recession with almost no tools left to abort that possibility".
On September 18 ,2007 ,in an interview with Brian Sullivan (Bloomberg TV),I have issued a warning about the subprime Armageddon that is about to hit the markets-Other than my costumers ,I dont recall any other vocal support for that view.
Now,I am bullish as hell on the markets as the FED ,the Treasury and the Foreign Central Banks are implementing correct and mega stimulative measures which will be responsible for the unprecedented rally ahead-period.The volatility and the consolidation of the market will continue while longer.
10 More Notes for the Current Crisis
The error committed by the Treasury was tho allow Lehman to fail allowing speculators to test the tolerance limits.The error committed by the various components of the industry was diverse but the subprime lending enhanced by the Micky Mouse AAA rating on the subprime paper ,is the culprit of the financial sector's derailment.
The articles like this one have no value as the problems,issues are identified and remedies are applied .
The results may take some more time(lag),but major market and economic rebound is on the way.
It seems to me that the imposition of no naked short rule shoud be reinstituted untill broad confidence is restored .
Shorting thestock has no economic value -you don't like public company A ,don't buy the stock or buy the stock in company B.
For myself ,I have issued the warnings about impending Armageddon in an interview with Mark Gilbert (Bloomberg London) in June of 2005 and again on September 18 /2007 (Bloomberg TV -Brian Sullivan).
Now ,I am not going to discuss the sincere and measures implemented by the Administration,Congres... ,Treasury and the FED aimed at addressing serious issues-but I know they are very effective.
Spain?-it is about to implode and the higher reserve requirements will only enhance the degree of implosion.
U.S stock market is in the midst of solidifying the base for unprecedented rally .Volatility will continue.
Global cooperation on the key financial /economic issues makes the constructive outcome a certainty.
Sentiment Overview: Bullishness Is on the Rise, Insiders Are Buying
It will dwarf and redefine previous impressive 900 points spike.
Volatility will continue but the global focus/action aimed at the economic revival will exceed the expectations.
Remember ,mega rally =s Gabe.
What Companies Will Benefit from Obama's Vision?
I doubt that President Obama will be able to radically change the course of the U.S economy within the first two to three years.
The most important economic catalysts in place are 700 billion dollarsTARP which will provide 5 trillion dollars of stimulus to broad sectors once fully implemented -and of course the monetary rate implosion( now global) .
Allowing for some monetary /fiscal lag,the U.S economy is heading for a major rebound that will be undisputable by mid 2009.
For all of the financial sector paranoia,this is the sector that likely will lead the rally as it is the focus of the TARPand monetary "remedies".
President Obama ,a very charismatic and dynamic individual ,will likely get credit for events initiated by the current administration ,FED ,the Treasury and the Congress.
Remember ,there is nothing to fear but the fear itself.
We have identified the issues and are addressing them aggressively ,effectively and globally.
Market Overview: Indices Fall with More Earnings Misses
For the record ,a desk that trades a 100 million Euros a day in bonds is a Micky Mouse operations.
I trade for my clients in the increments of a 100 million dollars and have traded as much as billion dollars at a clip (treasuries).
For the record ,I dont think any investor expects rebound in the earnings in the near future.It is quite clear that based on the current levels ,two consecutive contractions have been discounted without any allowance for the major economic impact of the TARP-I preferr to call it a stability plan.
Given the magnitude of easing (U.S ) and the liquidity injection into the system ,U.S economy and the markets are heading for major rebound-period.
That is not the case for Europe and Asia and Emerging Markets as ECB and other Central Banks were late in acknowledging problems and are behind the curve on the implementation of radically easier monetary policy.
The dollar strength is a reflection of the global recognition of the major U.S economic upward momentum in the period ahead.
In the meantime we have to listen to a Mole nonsense and other economic fairly tales.
We are getting ready for a record /unprecedented stock market rally.
This outcome can not be affected by the new President elect as the catalysts in place will shortly produce the results.
I suppose what is missing on this opinion platform is an article about the end of the universe as the anti Christ is influencing the market.
Enough of this garabage.
10 Points About the Markets
U.S will be a reseve currency for centuries to come.
For all of the criticism that the U.S is recipient of,we are the global locomotive of the global economy responsible for 70%-80% of the world trade.
More importantly ,we set the global economic trend- meaning the global economies can not escape our cyclical patterns.
In fact Europe ,Asia,and the Emerging markets,can not rebound out of economic deceleration/contracti... ,untill we do.
That is why we have witnessed a unprecedented inflows into the dollar as it is a global relative reflection of the investors' confidence in our economy.
More likely than not ,these dollar inflows will be invested in the dollar denominated assets contributing to a major rebound inthe stock market and the housing /construction sector
The major unexpected stock market recovery(I called it) ,is only the beginning of the greatest economic/market recovery in the U.S history.
The 700 billion dollars economic /rescue jolt,combined with the lower rates ,is the economic rocket propellent that will stimulate GDP growth to 5% by the second half of the 2009.
In the meantime ,we should remember that every economic turnaround was triggered by the maximum pessimism.
We are on the way to a major recovery and a mega stock market rally that will dwarf any rally observed to date.
The Demographic and Economic Record Prior to the Housing Meltdown
Sometimes after September 11,Mr.Greenspan had decided that the deflation not inflation is the real risk.Accordingly ,under Mr.Greenspan's leadership,the FED had lowered the FF to 1% creating the largest rate implosion since the Geat Depression. The almost record decompression had allowed lending institutions to create unprecedented low level of the mortgage rates(floating) causing the massive hike in the home ownership.
Low rates had encouraged the sub-prime lending(homes).
By the end of 2006 20% of allof the homes were financed by the subprime loans.
I have issued back then a warning about the vulnearability of the housomg sector.
Comes Mtr.Bernanke who is concerned about inflation.
The FED under his leadeship drives the FF to 5.5% driving the mortgage rates substantially higher and jeopardizing significant segment of the housing industry.
The current turmoil is a reflection of the latter monetary blunder.
Now ,the various policies in place will contribute to stability in housing and the economic base from which we are about to witness a major economic rebound- housing sector included(slight lag).
That is the synopsis of the real story.
Another Perma-Bear Converts To Bullish-ism - Barron's
True enough ,the market may have discounted Depression.
Never in the cyclical economic history of the U.S ,did the U.S economy had received such unprecedented stimulus.
The 700 biillion dollars "stability package" will provide 5 trillion dollars "jolt"(700x7... the drastically lower rates will enhance the the effectivnes of this economic jet fuel.
As impressive as the 900 points rally we have seen ,there is a super mega rally in the period ahead ,that will dwarf the prior rally and will redefine the bullish market concepts.
By mid 2009 the GDP will be growing at 5% and gaining momentum for the next two years .
Dow will reach a 20,000 mark in two years
One observation-hedge funds precipitated the crisis by leaning on the financial sector and distorting the fundamentals in that and other sectors.
If in fact the hedge fund gave up two weeks ago-they gave up being short.
This cycle is not about the perfect timing nor comparison with the past as we have faced and addressed a different phenomenon.
It suffices to say that U.S is on the way to a record recovery and the dollar inflows (which will enhance economic expansion ahead),reflect the global agreement on that topic.
At this point,the only thing to fear is the fear itself.