Der USA Bären-Thread

Ich würde fast meine Hand dafür ins Feuer legen, dass die Statistiktrickser der US-Administration eine tiefe Rezession ohne negatives GDP hinbiegen. Der CFNAI, der ECRI Index und noch ein paar andere Indikatoren, z.B. die von shadowstats, erzählen allerdings etwas Anderes.  

für die Zentralbanken von Brasilien, Mexiko, Südkorea und SINGAPUR - UNCLE SAM hat´s ja!

Singapur ist wohl das reichste Land der BRICs mit einem Pro-Kopf-Vermögen höher als in den USA.

Siehe: globaleconomicanalysis.blogspot.com/2008/...ama-to-brazil.html

Graphiken zum GDP; zeige hier nur eine; den Rest unter:

econompicdata.blogspot.com/2008/10/...n-03-world-rejoices.html

Wie man sieht hängt das GDP noch ma Außenhandelsüberschuß und am Staat; ersterer ist auch rückläufig.

3- fach boden gibts auch noch einen
passenden 2-fach boden im tnx. der ist allerdings erst in der "vergrößerung" zu sehen

navigatorc

so langsam wirds zeit für das geschenkpaket 2.0.

A Question for A.I.G.: Where Did the Cash Go?
By MARY WILLIAMS WALSH
Published: October 29, 2008
The American International Group is rapidly running through $123 billion in emergency lending provided by the Federal Reserve, raising questions about how a company claiming to be solvent in September could have developed such a big hole by October. Some analysts say at least part of the shortfall must have been there all along, hidden by irregular accounting.
You don’t just suddenly lose $120 billion overnight,” said Donn Vickrey of Gradient Analytics, an independent securities research firm in Scottsdale, Ariz.

Mr. Vickrey says he believes A.I.G. must have already accumulated tens of billions of dollars worth of losses by mid-September, when it came close to collapse and received an $85 billion emergency line of credit by the Fed. That loan was later supplemented by a $38 billion lending facility.

But losses on that scale do not show up in the company’s financial filings. Instead, A.I.G. replenished its capital by issuing $20 billion in stock and debt in May and reassured investors that it had an ample cushion. It also said that it was making its accounting more precise.
weiter:
www.nytimes.com/2008/10/30/business/...tml?_r=1&em&oref=slogin
navigatorc

Finanzkrise
US-Steuerspartricks rächen sich für deutsche Kommunen
Hansjakob Ginsburg, Andrea Auler
30.10.2008

Weshalb auch niemand außer den unmittelbar Beteiligten den fast gleich lautenden Brief lesen darf, den deutsche Stadtkämmerer in der dritten Septemberwoche per Luftpost erhielten. Die amerikanischen Vertragspartner weisen damit ihre deutschen Kontrahenten darauf hin, dass die AIG als Bereitsteller der Garantie der Schuldübernahmeverträge einem „Kreditsenkungsereignis“ unterworfen sei. Und im nächsten Satz werden die deutschen Kämmerer daran erinnert, dass sie für diesen Fall dazu verpflichtet seien, binnen Wochen einen anderen Bürgen herbeizuschaffen.

Finden die Kommunen so einen Bürgen nicht, drohen ihnen Millionenforderungen aus den USA, die nach Schätzung von Rechtsanwälten rund die Hälfte der bislang erzielten Gewinne auffressen könnten. Zumindest aber werden die neuen Garantien teurer, denn die internationale Kreditkrise hat die Zahl der Banken mit ausgezeichnetem Rating deutlich dezimiert. Und die wenigen verbliebenen dürften sich die simple Dienstleistung – im Grunde nur die Verwaltung eines existierenden Wertpapierdepots – fürstlich entlohnen lassen.

Doch es droht noch weiteres Ungemach. Im Frühjahr 2004 hat der amerikanische Kongress das den CBL-Verträgen zugrundeliegende Steuerschlupfloch abgeschafft, und daraus resultiert für die Kommunen ein weiteres Risiko. „Die Städte hätten seitdem wissen müssen, dass die wirkliche Rechnung für diese Geschäfte erst noch kommt“, sagt der Kölner Autor und CBL-Kritiker Werner Rügemer. Denn tatsächlich lassen sich die CBL-Verträge so interpretieren, dass die amerikanischen Vertragspartner Geld von ihren ausländischen Kontrahenten verlangen können, falls sich der ursprüngliche Steuerspareffekt nicht realisieren lässt.

neue geschenkpakete  richtig finanziert. :
www.wiwo.de/politik/...n-sich-fuer-deutsche-kommunen-375345/2/

navigatorc

mit den ausstehenden Lehman-Forderungen verrechnet. Endlich mal ein bilaterales Abkommen, das sinnvoll wäre. ;-))

There can be no doubt that this policy of ‘selective socialism’ is totally insane for several reasons.  First and foremost, who has given these officials the power to decide which company is worth saving and which one is insignificant enough to fail?  Next, what kind of message are they giving to the remaining banks – please merge quickly and grow in size or else you will be allowed to fail? Furthermore, America already has a horrendous debt problem (debt to GDP ratio in excess of 400%) so who has given the US Treasury the authority to take on more debt?  Finally, who is going to pay for these trillions of dollars of bail-outs?

Although these bail-outs may offer short-term respite, I am of the opinion that the recent antics of the US establishment will make matters much worse over the medium to long-term.  History has shown time and time again that no nation has ever printed its way to prosperity.  In fact, all the nations which resorted to money-printing in the past, ultimately saw a total economic collapse.  Furthermore, the middle-class and the impoverished people in those countries got totally wiped out due to runaway inflation.  And apart from a handful of rich people who were able to ride the inflationary wave, everyone else suffered a great deal.  I wish I could come up with more cheerful news but I am afraid the same economic outcome is likely in the US.  If the clowns in Washington continue with their senseless inflation agenda by adding more monetary fuel to an already raging fire, I suspect we will see a massive deterioration in the American way of life.  

Now, I am aware that the majority of commentators and pundits are applauding the recent bail-outs.  According to these folks, the bail-outs were necessary to prevent an outright collapse of the financial system and the government intervention also helped to restore calm in the financial markets.  

For sure, the recent nationalisation of assets may have helped the markets in the near-term, however I fail to see how it can be good for the global economy over the long-term.  Remember, it was the same reckless money-printing in the aftermath of the NASDAQ bust which caused this massive financial crisis and now the US establishment is throwing more money into the system!  In the short-term, this injection of liquidity may act like a shot of heroin for the desperate drug addict but in the longer-term, this dosage of monetary poison will end up killing this terminally-ill patient!  After all, how can these bail-outs be good when they will further destroy the purchasing power of the US Dollar?  How can these measures be hailed by the investment community when they will cause food and energy prices to sky-rocket in the years ahead?  How can more monetary inflation be good if it punishes savers at the expense of debtors?  

Make no mistake, this reckless monetary inflation will eventually cause the US Dollar to become worthless and America may have no option but to issue a new dollar bill (Figure 1).  And if other nations also embark on this inflationary road to nowhere, we will see a terrible hyper-inflationary depression with currencies plummeting against tangible assets.



www.financialsense.com/editorials/saxena/2008/1030.html

navigatorc
Figure 1: US Treasury’s new dollar bill?

A brave call from ML’s global economist, Alex Patelis, yesterday.
He’s saying that upcoming economic data points are nearly all likely to be below current consensus:
"The financial crisis is going to be reflected in a collapse in the September/October economic data set released in November, starting this Friday. We already got a taste of what’s to come from the plunge in the Philly Fed and US consumer confidence. The way I look at it is the following: whatever you might think of the underlying economic trend, a financial crisis creates a focal point which changes behaviour.
If you were to buy a car, you postpone it for the following month, just to be on the safe side. The economy thus skips a beat before catching up with the November dataset (released in December/January) bouncing. This ‘bungeejumping’- like feature of the economic data should feature data releases that, in nearly all cases, are likely to be below Bloomberg consensus, in my view. The most useful (though not fully appropriate) framework of thinking about the data is post-9/11, in our view."
Cheerful stuff, eh? Of course, what’s essential is the market’s reaction to the economic info, and here Patelis is anticipating something rather counterintuitive (read: not the usual mass sell-off):
"I suspect the answer is that, initially, the market will be spooked by the data, and as we get closer to the end of the ‘bungee jump’ we will see a bizarre phenomenon of the market rallying on bad data. From an economic standpoint, this is likely to happen some time in Q4, maybe around November. In any case, for most countries, Q4 2008 or Q1 2009 are likely to be the weakest quarters of the cycle before we start focusing on medium-term trends."
Either way, ML have taken the opportunity to revise their economic growth forecasts downwards, in this new table, which we’ve shortened, below, with the global economy now expected to grow 2.1 per cent next year — the lowest rate since 2001, dragged down by the US and other developed markets:

Zu einer Deflation gehören mMn zwei Faktoren: Die Zinsen müssen sehr niedrig sein, und die Inflation muss sehr niedrig sein. Was in USA zurzeit abgeht, sind aber 1-Prozent-Tiefstzinsen gepaart mit weg-revidierter 5-Prozent-Inflation. Das ist definitiv NICHT das, was man unter Deflation versteht. Es ist eher ein Rezept, den Dollar abzuwerten und Dollar-Sparer (inkl. ganzer Staaten wie China, Japan, Araber) für das in diese Schundwährung gesteckte Vertrauen abzustrafen. Tenor: Ihr mässt weiterkaufen, sonst wird der Dollar wertlos.

---

 

Treasury sales could top $1 trillion to fund bailout

U.S. could also bring back 7-year note, do more frequent sales
By Deborah Levine, MarketWatch
Last update: 1:50 p.m. EDT Oct. 30, 2008

NEW YORK (MarketWatch) -- Major bond dealers say the United States may have to issue more than $1 trillion in debt during its current fiscal year, by far the most ever, to fund massive programs designed to bail out the banking system.

That would be a "staggering" increase from recent years, said Michael Cloherty, an interest-rate strategist at Bank of America Corp., one of the 17 primary government-security dealers required to bid at Treasury auctions.

The Treasury Department will announce Monday how much of that full-year borrowing it anticipates selling in the first half of the government's 2009 fiscal year, which began this month.

In its past fiscal year ended September, the government sold $724 billion in notes, bonds and inflation-indexed debt, according to Wrightson ICAP, a research firm specializing in government finance.

If the debt issue swells to $1 trillion, as Barclays Capital, Credit Suisse and others anticipate, the issuance would represent a 38% increase in one year...

(weiter im Link oben)

Immobilienkrise in den Vereinigten Staaten


www.faz.net/s/...F6AAE3685253F4BCC3~ATpl~Ecommon~Scontent.html

Grüße

Chinalover

www.bankofengland.co.uk/publications/...hes/2008/speech365.pdf

Where next for the UK economy?
.....Certainly, the scale of the problems in financial markets has been rather worrying. As
house prices have fallen, for example, loan-to-value ratios on existing mortgages have
deteriorated, putting significant proportions of the population into negative equity.
What has been a little harder to predict has been the reduced credit worthiness of the
banks themselves. Recent efforts by the UK government to re-capitalise the banking
system are welcome in this regard.
However, I believe the impact of constrained credit conditions has yet to fully feed
through to the broader real economy, particularly on firms’ investment decisions.
And recent events in financial markets will likely reduce lending further to both
households and firms in the near term. This is a key factor underpinning my view that
we need a looser monetary policy in the UK.
I have also been struck by how closely the path the UK has followed resembles that of
US economy about six to nine months earlier. In part, this should not be too
surprising given similar developments in US and UK housing markets, and the global
nature of the financial sector. The financial difficulties that started in the US subprime
market have now spread around the world – and governments in Austria,
Denmark, France, Germany, Greece, Iceland, Ireland, and Sweden have intervened in
their banking sectors. Denmark, Germany, Hungary, Ireland, Italy, Japan, Latvia New Zealand, and Spain, to name but a few, are already in recession. This is now a
global phenomenon In September CPI inflation rose to 5.2%, its highest level since the Bank of England
was given independent monetary policy responsibility......
A less benign view is that if expectations of future CPI inflation rose, and became
entrenched, a wage-price spiral might emerge. In the 1970s persistently high rates of
inflation eventually required painful policy adjustments to constrain growth and bring
inflation under control. One concern has been that a similar scenario might now
emerge, given the peak in CPI inflation, and that policy might have to be tighter than
it otherwise would have been in order to contain inflation expectations............

"Vor DAX 3000 sollte man keine längerfristigen Longs anfassen (außer als Trade - wie Du bei BASF)."

Wenn man die Performance von VW aus dem Dax hinausrechnet, dann war der Dax vorgestern doch schon bei "über den Daumen gepeilten" 3000/3500 Punkten.

Wie bewertet ihr die großen Probleme im Finanzsektor, die noch auf uns zu kommen?
Ich denke da so an die Kreditkartenschulden...

Von daher werde ich auch nur bisschen kurzfristig weiter zocken.

das kann man so pauschal nicht sagen. Die DAX29 sind ja nur deswegen so extrem gefallen (teils über 20%, bei super Vorgaben aus Asien), WEIL VW so stark gestiegen ist. Vielen Fondsmanagern blieb gar nichts anderes übrig, als die anderen Werte zu verkaufen...wenn man die Charts übereinander legt, kann man das gut erkennen.

Daher glaube ich, daß wir ohne VW vorgestern nicht signifikant tiefer gelegen hätten, jedenfalls wäre der DAX deutlich über 4000 geblieben.

Ich habe vorgestern groß in die DAX29 investiert und gestern wieder das meiste verkauft. Leider zu früh, aber was solls, war ein fetter Gewinn. Jetzt bleibe ich mit über 70% Cash mehr oder weniger an der Seitenlinie, weil ich nicht genau weiß, wie es weitergeht. Vor einer Woche war noch überall Weltuntergangstimmung und die Nachrichten sind ja auch alle nicht besonders gut, daher tippe ich auf ein nochmaliges Abfallen der Indizes.

www.morganstanley.com/views/perspectives/...ment_strategy3.pdf
lesenswerte Analyse von Morgan Stanley zu den Folgen der Wahl:
......Democratic Victory: Potential Beneficiaries may be found in companies,
exchange traded funds, closed-end funds, and open-end
funds focused on the following sectors :• Biofuels
• Generic Drug Companies
• Geothermal
• Healthcare IT
• Hospitals
• Medicaid Companies
• Natural Gas Companies
• Solar Power Companies
• Wind Power Companies

Republican Victory:
Potential Beneficiaries may be found in companies,
exchange traded funds, closed-end funds, and open-end
funds focused on the following sectors:
• Asset Managers
• Brokers/Investment Banks
• Coal
• Credit Card Companies
• High Dividend Yielding Companies
• Large Cap Pharmaceuticals
• Managed Care, Oil & Gas
• Student Loan Providers........

steht noch aus, hello_again. Sie folgt praktisch jeder Übertreibung nach oben. Mag sein, dass der DAX schon jetzt "fair bewertet" ist, aber so lange Mr. Market noch Blut aus gestressten Anlegern quetschen kann, wird er den DAX weiter fallen lassen bis zum bitteren Ende.

Warum sollte die schwerste Finanzkrise in der Geschichte der Menschheit - so wird sie inzwischen selbst von der FAZ bezeichnet - den DAX "nur" auf das Jahr-2003-Tief bringen? Wenn es rappelt im Karton, USA und Deutschland in eine Rezession fallen und dann auch noch nicht-finanzielle Firmen mit Kapitalerhöhungen kommen, darf man sich im DAX noch auf böse Überraschungen gefasst machen.

In USA rechnen selbst moderate Kommentatoren von street.com damit, dass der SP-500 bis in den "höheren 400"-Bereich fällt.

blogs.wsj.com/marketbeat/2008/10/30/...nd-the-fed-watch-libor/
Forget about the Fed. What needs to be watched in coming weeks is Libor, if you’re looking for cues on the direction for equities in coming days and weeks.

Some believe rate decisions from the Fed no longer carry the paramount importance they once did for markets because the link between that target and what banks actually charge one another has broken down to some extent.

Other measures, including the distressed asset repurchase program and the Treasury Department’s bank bailout, are just as important as rate policy, said Zach Pandl, economist at Barclays. For a sign that those liquidity efforts are taking effect, watch the London Interbank Overnight Rate, or Libor, rate, he said. “That’s the canary in the coal mine,” Mr. Pandl said.

The overnight dollar Libor rate fell to 0.73% from 1.14% Wednesday, below the then-Fed target rate. The spread between the federal-funds rate and the three-month interbank lending rate fell to 2.46 percentage points from 2.58 percentage points Wednesday, still quite elevated. For a sign that bank lending is returning to “normal,” Mr. Pandl said, the three-month spread would have to narrow to 12 to 15 points. The three-month rate remains “stubbornly high,” and banks demand for money relative to supply remains tight, said Stephen Gallagher, an economist at Societe Generale. And until the spread narrows, Mr. Pandl said, rate cuts won’t have any traction to assist the economy. That’s because the availability and cost of loans to corporations and consumers depends on the interbank lending rates.


Since the failure of Lehman Brothers Holdings Inc. (LEHMQ) in mid-September, the Fed has flooded markets with liquidity, but that hasn’t pushed banks to increase lending significantly, Mr. Gallagher said. The commercial paper market has begun to respond to action from the Federal Reserve, as the total amount of commercial paper outstanding increased by $100.5 billion to $1.549 trillion for the week ended Wednesday, the first increase in seven weeks.

“A low fed-funds rate helps bank profitability to the point banks are willing to continuously refinance themselves, but the benefits to the economy are muted,” he wrote.

However, there are disagreements as to the efficacy of these moves — whether the improvements in commercial paper and Libor rates truly reflect an improvement in underlying credit conditions, or not much more than a propping-up by the authorities. “To argue that the credit crisis is easing because government-controlled interest rates are falling is to argue that inflation is abating because the government-controlled target funds rate was getting cut,” writes James Bianco, president of Bianco Research LLC. “It is true that some companies have gone from no access to in the commercial paper market to a government subsidy. Why is this a sign things are getting better?”......

Der BDI hat inzwischen ein erschreckend schwaches Niveau erreicht.
Wenn der See-Handel zusammenbricht, weil nicht mehr die nötigen Akkreditive ausgestellt werden, dann werden wir uns bald mal mit dem Gedanken anfreunden, dass die Regale in Zukunft nicht mehr so gut gefüllt sind, wie sie es bisher waren. Und das gilt nicht nur für den Lebensmittelbereich. Insbesondere die Rohstoff-Lieferungen sind von dieser Entwicklung betroffen.
Was die Lage zusätzlich schwierig macht, ist, dass wenn verschiedene Rohstoff-Preise aufgrund der weltweiten Gewitterwolken an Konsumhorizont weiter einbrechen, die Lust der Produzenten zu investieren stark nachlassen wird alleine schon deswegen, weil sie von den Banken in der aktuellen Lage nicht mehr die notwendigen Kredite bekommen.
Mit relativ leeren Lagern, abflauender Produktion und dem versiegenden Welthandel gibt das eine ziemlich explosive Mischung.
An der Stelle gibt es dann nur noch wenig Reaktionsmöglichkeiten: entweder die Preise für die sich verknappende Warem steigen massiv (was die Produzenten aber nicht zum Anlass nehmen die Produktion zu erhöhen, weil sie ja kein Geld für Investitionen bekommen bzw. unelastisches Angebot)  oder die Waren müssen rationiert werden: beides keine rosigen Aussichten.
Neben dem Konsumenten wird aber auch mehr und mehr das produzierende Gewerbe betroffen sein.
Es werden Firmen die Produktion aufgrund fehlender Rohstoffe zwangsweise zurückfahren auch wenn sie vielleicht sogar noch verkaufen könnten.
Die BDI Krise zwingt weiterhin etliche Reedereien in die Knie wenn nicht sogar in der Konkurs. Damit sinkt dann auch die Flottenstärke was ein weiteres Einbrechen des Welthandel zur Folge haben wird.
Ich hoffe, dass es nicht so weit kommt, wie früher in den Ostblockländern, wo nur die Reichen und Politiker an West-Waren herangekommen sind und Otto-Normalverbraucher dafür hätte ein Vermögen ausgeben müssen.

Auch hier wieder ein ganz klares Zeichen von Inflation, das da auf uns lauert

Hinter beiden Kennzahlen steht jedoch ein Ausnahmequartal, in dem der Ölpreis eine Spitze von immerhin 147 $ pro Barrel erreicht hatte. Folglich konnten die Konzerne zu einem sehr hohen Preis verkaufen. Inzwischen liegen die Notierungen des wichtigsten Rohstoffs der Industrieländer jedoch wieder bei gut 60 $. Der Preis kam vor allem wegen Sorgen um eine weltweite Rezession als Folge der Kreditkrise unter Druck. Die Befürchtung der Investoren: Die Nachfrage nach Öl dürfte künftig angesichts der Wirtschaftskrise deutlich fallen.
Eine wichtige Größe für Investoren

Wegen der Sondereffekte im abgelaufenen Quartal rücken bei Anlegern die schwachen Produktionsziffern von Shell und Exxon in den Vordergrund. "Die Gewinnzahlen sehen ordentlich aus. Einige Investoren werden von der mäßigen Produktionsleistung enttäuscht sein", sagte Tony Shepard vom Aktienhändler Charles Stanley. Im Kontrast dazu meldete der britische BP-Konzern bereits am Dienstag für das dritte Quartal eine leicht gestiegene Menge von 3,66 Millionen Tagesbarrel. Das US-Unternehmen Chevron, Exxons wichtigster Rivale auf dem heimischen Markt, legt heute seine Quartalszahlen vor.

Die Produktionsleistung der Ölmultis ist für Investoren eine wichtige Größe, denn sie macht deutlich, wie rentabel die immer weiter steigenden Investitionen in die Ausbeutung der Rohstoffe sind. Seit dem Geschäftsjahr 2000 haben sich die Produktionskosten der privaten Ölmultis vervierfacht, weil sie in den Ölförderländern nur noch schwierige und kostenintensive Projekte angehen können. Immer häufiger lassen Länder wie Russland oder arabische Staaten ihre nationalen Ölkonzerne bei Öl und Gas fördern - und bevorzugen sie.
Anstieg der Produktionskosten

Der steile Anstieg der Produktionskosten ist vor allem für Shell ein Problem. Bei dem Unternehmen werden 2008 die Investitionen mit rund 30 Mrd. $ um die Hälfte höher liegen als im Vorjahr. "Rund ein Drittel der Reserven stecken bei Shell in Ölsanden. Für die Ausbeutung dieser Vorkommen ist ein hoher Ölpreis nötig, um die Sache rentabel zu machen", sagte Analyst Shepard.

Der französische Ölmulti Total hatte kürzlich vorgerechnet, dass sich die Ölsandausbeutung erst ab einem Barrelpreis von 90 $ lohnt. Shell bremst folglich bei seinen kanadischen Ölsandprojekten. "Wir wollten über die zweite Expansionsstufe ursprünglich 2009 entscheiden. Das werden wir nun aber weiter aufschieben", kündigte Konzernchef Jeroen van der Veer an, der im Juli die Geschäfte als Vorstandschef an seinen bisherigen Finanzvorstand Peter Voser abgeben wird.

den Indizes nach den letzten Kursmassakern auch mal wieder Luft geben. Es ist völlig normal, dass der Markt nach diesem krassen Ausverkauf wieder nach oben dreht.

chance ......unter 1.90........

Haste dafür auchn brauchbaren Schein? Angebot ist sehr rar!

aber vorsicht, wenn die ubs pleite geht....... und short auf EURO-GBP kann auch interessant werden da bin ich in dem DB1M39

blogs.reuters.com/great-debate/2008/10/29/...ear-market-rally/
James Saft is a Reuters columnist. The opinions expressed are his own –

By James Saft
NEW YORK (Reuters) - Some time before the end of the year it is a good bet that stock markets will throw off their gloom and begin a powerful rally of as much as 15 or 20 percent.

Some time one to three months after that it is a good bet that the prospect of a deep global recession and shockingly bad earnings will send them right back down again to make new lows. Rallies in the midst of bear markets can be sustained, powerful and feel very much like the ones that often mark the beginning of a real recovery.

So, why should we believe that we could get an early, if transient, Christmas present from the stock market?

Global markets are more scared, tired and depressed than at any time in my reasonably long memory, excellent breeding conditions for a rally. Given that most people are now on the same side of the debate, it would not take terribly much by way of money being committed to developed market stocks to send them higher. There may even be some momentum investors left who will pile on if a rally can get just a little traction.

The Vix index of stock market volatility hit a record high of 89.53 last week while the ratio of bulls to bears is at a several year low. And stocks have absolutely cratered — the S&P 500 index is down more than 40 percent this year and was heading lower at the time of writing.

Secondly, in historical terms valuations are as good as they have been in quite a while and increasing numbers of stocks are appealing to even the most hard-bitten value managers.

Perhaps most compelling, bear market rallies are simply what often happens in these circumstances. Nothing, not the housing market, nor the Roman Empire nor Alan Greenspan’s reputation keeps going in a straight line in one direction.

“Whether they are bull or bear, markets move in waves,” said Albert Edwards, the famously bearish global strategist at Societe Generale in London.

“You typically get three or four rallies by 25 percent within a bear market. And even though I think the S&P is going to 500 we should get a fairly healthy bounce at some stage.”

Edwards, who has been not just bearish but structurally bearish and who in September predicted a crash, has started to put a toe back into the water, raising his weighting of equities within a diversified portfolio.
He is still underweight equities, but has moved away from more extreme levels.
And it’s not just him. Both Warren Buffett and famed value investor and long time bear and bubble detector Jeremy Grantham have recently become more positive on equities, to varying degrees and in Grantham’s case with a proviso that we will ultimately go lower.

I hate arguments of authority; a long string of them have got us where we are today. The deal must be safe, the ratings agency called it AAA. It must be sensible to borrow five times my earnings to buy a house that just tripled in value, after all the bank is willing to lend me the money. The Fed must know what it is doing.

But that said, the arguments that we may have a rally soon, even an evanescent one, are pretty good.

Grantham looked at 28 bubbles which met his criteria since 1920, all of which, including now the recent bubble in the stock market, reverted to the trend line of growth. Earlier in October, he called S&P at 900 good value and said he would be a steady buyer, though he says he is reconciled to buying too soon. He acknowledges that in the largest bubbles, 1929, 1965 and Japan’s in 1989, the market overcorrected by substantial amounts. He thinks the index, which was trading on Monday at around 880, will bottom at between 600 and 800.

Given that reverses are always part of market trends, and especially given that few awful things in life are as terrible as they seem when first the shock sets in, I do think it is reasonable to expect a rally. It could be quite powerful and will immediately get strategists and talking heads reminding us that large portions of bull market gains usually come in the first few weeks of a recovery.

But though I wouldn’t bet against such a rally, I also wouldn’t buy it a season ticket. Let’s all hope that the financial system doesn’t fall over, but let’s not confuse it remaining standing with a recovery.
Analyst expectations for earnings in the developed world are still at laughable levels. And though everyone laughs at them, stocks still get sold off when they disappoint.

The ongoing deleveraging of the Western economies has further to go and anyone with any sense will admit they don’t really know what this crisis may throw up.

So, prepare yourself for a bit of holiday season cheer, but remember that a long lean period usually come after.
BEST COMMENT
2008-10-30 07:26:34
James is right.Market is oversold in the Short Term and a rally is coming - a dead cat bounce to trap the last of the hopefuls.Well we are back to square one.Greenspans 1% Interest rates fueled speculation and Fed wants to use the same trick again. Good Luck !

www.bloomberg.com/apps/...20601080&sid=aTfTKmOqzfxc&refer=asia
.....Raw materials account for 60 percent of Australia's exports, while sales of commodities make up 70 percent of New Zealand's overseas shipments.

``We are bearish on the outlook for the global economy, with our economists looking for the harshest global slowdown since the early 1980s,'' wrote a team of strategists led by Sydney-based John Horner at Deutsche Bank AG, in a research note dated Oct. 30. ``This keeps us bearish on dollar-bloc currencies, especially the Australian and Canadian dollars.''

Hedging

The Aussie may come under pressure today as domestic investment funds, the world's fourth-biggest money managers, may have to dump their own currency as they adjust foreign-exchange hedges at the end of the month, said Richard Grace, chief currency strategist at Commonwealth Bank of Australia in Sydney........