Wednesday, Oct 17, 2007
Are stocks ready to fall?
The Telegraph: This bear is not capitulating
Ambrose hasn't given up on a 20% crash yet.
Posted by sold 2 rent 1 @ 12:33 PM (1037 views) Add Comment
6 Comments
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1. sold 2 rent 1 said...
A comment posted by sly fox is interesting.
"Ambrose - you're so bad, it is comical. That must be why you're a journo, sitting on the sidelines tut-tutting while the real experts work at the coal-face. You say that freight rates are backwards-looking but metal prices are not? Your childishly simplistic approach to stock markets is wonderful. What you don't realise is that the markets going up has got nothing to do with the economy - it's all about liquidity. With no more demand for securitized debt (itself a bubble due to the hnagover from the dot com boom), and more liquidity than ever before thanks to the Fed Put, there is nowhere for money to go except equities. Result: markets go up. Of course it will all end in tears, there will be inflation, interest rates will go up again, the consumer will be destroyed, it will be the 1930's again. But in the meantime, markets will go a LOT higher. Anyone taking your advice will be very poor. No doubt when the markets do top out, you will conveniently forget that you have been telling people to sell from a lot lower level."
2. sold 2 rent 1 said...
Nobody can really be sure of the short term outlook in stocks and indeed property.
There could be some serious IR slashing ahead to put off the inevitable depression.
What we do know is that any efforts to delay it will only make the end result much worse as debts get even higher.
3. mrmickey said...
I think what is clear is that a booming stock market is no longer an indication of a healthy economy just look at Zimbabwe. As with the housing market rising share prices create a sense of euphoria and keep the borrowing binge going and the money supply expanding.
4. dohousescrashinthewoods said...
I was quite impressed with the MoneyWeek artictle a while back that showed the money supply go from horizontal into a steep climb from the day Labour took power.
Economic boom? Course not. It's be biggest sham in the history of British politics. Gordon has been quite the antithesis of prudent. New Labour have been stuffing the golden goose since Tony walked into No. 10.
It's not just the man on the street who is dependent on credit.
5. whiteknight said...
Well.. the money can bugger off elsewhere. That will keep something of a lid on it.
I am aware that for 20 years its been about as challenging to invest as switching between US/UK bonds and equities at the right moment. Thats over. Stagflation. Both take the hit.
inflation, 1930's etc. yes. thats all correct.
6. Yorkshireman said...
MrMickey - I could not agree more about Zimbabwe. The rising stock market is not putting food on people's tables or making life any easier. Our situation may soon mirror this.