The man had done everything right so far - in his cabinet, his interactions with Republicans, in his constant communication to the American people. NONE of this, though, has ANYTHING to do with the markets. I know political types will always try to seek political advantage for their guy, but they are full of baloney.
Of course, when the markets rally Obama's supporters will claim it was the confidence Obama engenders that brought forth the rally.
It is my opinion that we are close to a short term bottom. I said "CLOSE" (and I define close as within 10 to 15%, I doubt we break 6500 Dow), but a rally could come at any moment (still, it would be a BEAR MARKET RALLY, not a new BULL MARKET) and I come to that conclusion by the simple fact that if you took the 3 big banks (JP Morgan, Bank of America, Citibank,) and dropped them to ZERO, and took GE to ZERO, the Dow Jones Industrial Average would "only" be down 442 additional points as a result. And I don't think the Federal Government will let them go to zero.
The sad fact is that the financial index is down 80%, and it can't go below 100%. Ergo, we are close to a bottom. CLOSE, as defined above.
Good Luck!
Mentatt (at) yahoo (d0t) com
4 comments:
Long term, we have further down to go. Where would the money come from for a renewed surge upward for the S&P 500? The 30 to 1 leverage banks (Morgan Stanley etc) have now become open-a-savings-acct-and-get-a-toaster banks (lucky to leverage 10 to 1). The soveriegn wealth funds have lost billions. The hedge funds are decimated. The credit won't be available. The baby boomers are going to start panicking as their bodies start falling apart and they realize they can't work forever even if they wanted to, and they will be cashing out their stocks. Even with the inevitable inflation that will come eventually, any increase in the markets would be phony increases, with the devalued dollars. There is just nowhere left for the money to come from to boost the stock markets.
Bureaucrat:
I withhold opinion for the long term. My focus is on energy equities, not the broader market. I only mention that financial have done their worst, and that can lead to a bear market rally, with "only" 15% risk - while giving an upside opportunity of 30%.
That is the risk profile as I see it at the moment. Accordingly, I bought back energy equities that I sold couple weeks ago, and I am selling out of the money covered calls on them. I think this compresses my profile to 7% down 20% up, and I can live with that.
thanks for sharing.......
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Sharon
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