Monday, Aug 24, 2009
Chinese Whispers
Big Picture: Lull before the storm
Was thinking of bullish recentyl, which is probably as good a sign as anything that things are about to get a lot worse.
I am hpwever convinced whatever happens that bears are being too impatient. Everyone is waiting for the stock market to half again and house prices to plumet but the pace of deteioration will be slow, months and even years, if you see this cycle starting in 2000, rather than days. I find this so easy to forget. Anyway good bearish article on China which is begining to look the market to short. Also read something from Felix Zulauf the other day were he described the UK (in comparison to the US) as barely develeraged. A comment that will make sense to many here.
Posted by bellwether @ 02:37 PM (1845 views) Add Comment
12 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. mountain goat said...
What lull before the storm? The volatility is killing me already!
Bellwether "bears are being too impatient"
One of the best articles I have read for a while on being impatient is this one. Also about being impatient, but this time as a bull when there is high volatility. Interesting how the dollar looks like the second chart, although I think the dollar is in for a re-test this week with the Treasuries auctions.
2. techieman said...
MG from your article:
"Many traders get a thrill from trying to pick the exact bottom or top of a runaway market. They perform the fundamental analysis and find a market is cheap after a big fall... or expensive after a big rise. Armed with this data, they head out to the "front lines" and go for glory.
They usually get riddled with bullets. "
Now you might understand why i didnt short the $ @ 1.70!!
3. bellwether said...
All summer I've been waiting for this market to top, but now thinking its not going to happen until next year, no matter how overvalued we get. There can always be excuses for any kind of mispricing in the market. The only way to win since March has been long and that may well remain the case for now. I think there will be GDP growth and continued green shootery especially in the US where housing is now basically fairly priced. But all the strutural problems from trade imbalance to bubbles in commercial real estate, to unliquidated assets, to a seriously hamgstrung and compromised consumer living without house as ATM will mean that many co's will not grow earnings as anticipated, then we go down. Incidentally Bernakes statements from Jackson Hole, which the market loved, terrified me. There seemed to be no comprehension of how we got here.
4. techieman said...
b/weather you sound depressed!
This might ring true : http://www.housepricecrash.co.uk/newsblog/2009/08/blog-getting-out-of-that-hole-24942.php Number 2.
5. taffee said...
its a good point...the lunacy of the 'free market' is why the credit crunch happened in the first place and all we seem to want is for everything to return to 'normal'
pretty crap society and unsustainable imo
first time buyers not only don't have jobs..they canot afford a property
6. bellwether said...
Hey Techie, no I'm good.
This made me laugh - market reacting to data and market releases:
weak data = Fed ease, stocks rally
consensus data = lower volatility, stocks rally
strong data = economy strengthening, stocks rally
bank loses $4bln = bad news out of the way, stocks rally
oil spikes = great for energy companies, stocks rally
oil drops = great for the consumer, stocks rally
dollar plunges = great for multinationals, stocks rally
dollar spikes = lowers inflation, stocks rally
inflation spikes = will inflate all assets, stocks rally
inflation drops = improves earnings quality, stocks rally
7. will said...
bellwether @ 3
He says the economy in the US will fall again in the first half of next year, but the stock markets will turn down ahead of it. Fits nicely with an autumn fall. Most of the artricle relates to the Chinese economy/markets which are a couple of months ahead of us.
8. techieman said...
bellw - exactly and you can do the same in reverse . Sentiment rules . In any case the market "normally" has a bullish slant . Which the bears have to overcome .
9. mountain goat said...
The trouble is that sentiment has got so out of kilter that it is setting up the next wave down perfectly. "Trouble" because if the bears are right and we get a 3rd wave down the mayhem will be so great you might not get paid anyway. This is what Prechter has been saying, unless you are a pro, play it safe. If you remember the mayhem when AIG nearly folded last year and many commodity ETFS and banking stocks got frozen. Well it is likely to get worse than that if we get a 3rd wave. This is getting it's too rich for my blood. I will only risk small amounts and stay in cash, dollar, US Treasuries or gold only, until after the next wave down is over.
10. bellwether said...
Good points MG. I've always thought this isn't done but months of largely missing out on this rally tends to wear. Andy Xie seems to think Chinese stocks peaked 4th August
11. icarus said...
bellwether @3 - Bernanke does know how we got here and he's probably more terrified than you are.
12. hpwatcher said...
the pace of deteioration will be slow, months and even years
I hope it will be slow, but I suspect it will be a sudden and disorderley......