Your investment returns Year-to-date are = 0.00%

Be sure to thank your friendly "Fed-Model-says-stocks-are-cheap / Sub-prime-doesn’t-matter / Valuations-are-reasonable / Buybacks are great / Consumers-are-fine / Earnings-are-great / there-is-no-inflation" perma-bull for all their great advice.


Enjoy your Thanksgiving!

Category: Investing, Markets, Psychology, Valuation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

50 Responses to “SPX: Flat for the Year”

  1. Dow close below 12845 = bear market signal.

  2. Jay Weinstein says:

    Remember BR, even if your turkey is 5 pounds bigger this year, it really isn’t because the amount of stuffing hasn’t changed according to BLS calculations….

    On a serious note, at the beginning of every year, many pundits proclaim the upcoming 12 months will be a “stock-pickers” year. Ignoring the patent idiocy of that, 2007 really has been. If you simply avoided financials and home builders, you would be many many points above zero. There are tons of stocks both large and small alike that are up huge amounts.

    Any stats on the standard deviation of fund returns versus that 0% ytd number? Is it greater than normal?

  3. Winston Munn says:

    The parallels between 2007 and 1929 are uncanny and somewhat unnerving – I found this testimony by Robert Kuttner to the House Finance Committee to be worth the read:

  4. mdy says:

    Winston Munn: thank you.

  5. The Dirty Mac says:

    “Has deregulation left the economy at risk of another 1929-scale crash?”

    Deregulation? Like Sarbanes Oxley and the PATRIOT Act? The regulatory drag on the economy is substantially greater than it was when the current free market extremist president took office.

  6. Test says:

    The Big Grinch who stole Thanksgiving!!!!

  7. Kp says:

    This is that part of the ride were you’re weightless….everything is calm and peaceful….but gravity is not done with you yet.

  8. Eclectic says:

    I think Asian markets get clocked tonight.

    We’ll see…

  9. John Bennett says:

    I can’t wait to see what Kudlow has to say about this, but seriuosly I now know we can’t believe anything these people say (the government). Paulsen is trying to protect his butt and Bernanke seems to be ignorant of all the facts. Where is Paul Volcker when you need him!

  10. OldVet says:

    Return 0.0% ? I have multiple Puts on the S&P. Your thin bird is my plump goose. Happy Holiday.

  11. cranker says:

    Deregulation? Like Sarbanes Oxley and the PATRIOT Act?

    No, deregulation as in Glass-Steagall.

    I guess you would be the one of those who roast red herrings for Thanksgiving.

  12. scytale says:

    I was wondering if there were anything, which would give a good picture of currency values. It does seem that salt is so ubiquitous, that the price /kilo wholesale should therefore reflect the value of currencies. Does anyone have a chart?

  13. jojo says:

    “I can’t wait to see what Kudlow has to say about this”

    OK John, here ya go….

    “Everythings undervalued – now’s a good time to pick up bargains!!!!!”

  14. muckdog says:

    Barry, to you, your family, and the merry band of readers here, Happy Thanksgiving!

    Looks like a big trading range in that SP500 chart to me. Notice how the rallies are slow and grinding, while the corrections are spikes down. The bull trend is still intact.

    Many folks in early October were on the sidelines wishing the market would give them a chance to get in at lower prices. Here it is. I bet those same folks are now waiting for the market to bounce to give them a chance to short. Can’t satisfy the wrong-way wonders!!

  15. viamede says:

    Gravity is just another contrarian indicator. Sold to you. Thanks for playing.

  16. “Fed-Model-says-stocks-are -cheap/Sub-prime-doesn’t-matter/Valuations-are-reasonable/Consumers-are-fine/Earnings-are-great /there-is-no-inflation”

    Bull’s Eye. Cheers.

  17. Short Man says:

    [Simpson's episode; Old Gil crashes his car and emerges from the wreck]
    “– Oh, boy! Gil’s gonna collect big from insurance! I’ll be eatin’ food tonight!”

    Enjoy the holiday!

  18. KirkH says:

    Somewhat off topic but potentially portentous turkey day news, flightless birds indeed:

    Light check-in volume surprised travelers departing from the United Airlines terminal at Los Angeles International Airport.

    “We were expecting a much longer delay. LAX is infamous for that,” said Charles Gwyer, 70, of Philadelphia. He and his wife were heading to Hawaii for a family gathering after a stopover in Los Angeles.

    “It’s empty, that’s weird,” Mike Patulo, 23, said at Newark Liberty International Airport in New Jersey, where he arrived by 8 a.m. for a 10 a.m. flight to Cleveland.

  19. Moose says:

    Market looks a lot more interesting at 1415 than it did at 1550…

  20. JJL says:

    I had a question as it regards to the “freezing” of teaser rates in California. Assume it can really be done. If the FED (ie you and me) has to bail out banks and lenders that are going to have massive losses from the restructuring, should the mortgage interest tax deduction be withdrwan from those homeowners that benefit from the lower fixed rates? It would seem like a double windfall to me to allow the deduction to stand. Any ideas? I have a poll up on my site where you can vote on it. Have a good holiday!

  21. Ross says:

    I mentioned a poem I recalled from the 1970′s. I believe it was in the Economist Magazine. Here is the rest.
    With appologizes to Ben Franklin.
    “you better buy now instead of tomorrow
    when things will cost more, you’ll find to your sorrow
    In all of my travels, this one thing I’ve learned
    A penny spent, is a penny earned.”

    Having just returned from the grocery, I should have bought Thanksgiving dinner in July! Mantra next year “hoard sugar.”

    Peace to all.

  22. Chris says:

    Barry, I see you are a glass half full kinda guy. If you put this in actual “what can my dollar buy now terms”, you will find yourself down about 10% in our new global economy. Trade weighted dollar index opened Jan 07 at 83.26 and currently stands at 75.07. Now back to your regularly scheduled holiday.

  23. attobuoy says:

    Well hey, if you look at the SPX in relation to the Euro:$SPX:$XEU&p=D&yr=3&mn=0&dy=0&id=p46522790569
    you can see that we’re below June 1, 2005!

    Looking further this ratio you can also see a head-and-shoulders top which began in late September 2006, peaked at 11.5 in June 2007 and crossed below its neckline of 10.4 on November 5 2007.

    By the rules of reading tea leaves of this type, the bottom of this ratio should be at 9.3, which at this rate will be only 3-4 more trading days.

    And there’s your silver lining for the holiday weekend!

  24. scorpio says:

    once again you could have made nice money in stocks thru end of April, sold it all and gone to cash at 5% and come up smiling. now, just where is that year-end entry point…?

  25. Winston Munn says:

    In the above post, I was not claiming that a 1929-like event will or even might occur. The point of posting Mr. Kuttner’s testimony was simply to show that the same types of risks that were present then are present now.

    This capsulizes the risks best, I think.

    “….financial history suggests that the abuses and risks are all too similar and enduring. When you strip them down to their essence, they are variations on a few hardy perennials — excessive leveraging, misrepresentation, insider conflicts of interest, non-transparency, and the triumph of engineered euphoria over evidence.”

    It is impossible to logically refute that all of these risks have been resurrected.

    I especially like the last phrase, and I would like to thank Barry for The Big Picture to help all of us find the evidence that is obscured by “engineered euphoria”.

    History shows that when these 5 risks reach critical mass a correction is bound to occur – the only debate at that point is how deep and how long the suffering lasts.

  26. scorpio says:

    hate to change the subject but: Bloomberg has piece today, says derivatives grew at fastest pace IN 9 YEARS in 2007, to outstandings of $516 trillion. yes, that’s trillion. now my question: what the eff is the subject of these derivatives? what do the writers think they’re protecting themselves from? certainly the ENTIRE FINANCIAL INDUSTRY (with the slightly possible exception of Goldman) wrote NOTHING TO PROTECT THEIR ASSES from apparently complete destruction. i dont understand it. do they just write these contracts back and forth knowing that they are completely ineffectual and worthless? apparently a Wall St specialty of sorts

  27. David Conley says:

    Nouriel Roubini’s Global EconoMonitor
    “Generalised Systemic Financial Meltdown”

    I now see the risk of a severe and worsening liquidity and credit crunch leading to a generalized meltdown of the financial system of a severity and magnitude like we have never observed before. In this extreme scenario whose likelihood is increasing we could see a generalized run on some banks; and runs on a couple of weaker (non-bank) broker dealers that may go bankrupt with severe and systemic ripple effects on a mass of highly leveraged derivative instruments that will lead to a seizure of the derivatives markets (think of LTCM to the power of three); a collapse of the ABCP market and a disorderly collapse of the SIVs and conduits; massive losses on money market funds with a run on both those sponsored by banks and those not sponsored by banks (with the latter at even more severe risk as the recent effective bailout of the formers’ losses by theirs sponsoring banks is not available to those not being backed by banks); ever growing defaults and losses ($500 billion plus) in subprime, near prime and prime mortgages with severe known-on effect on the RMBS and CDOs market; massive losses in consumer credit (auto loans, credit cards); severe problems and losses in commercial real estate and related CMBS; the drying up of liquidity and credit in a variety of asset backed securities putting the entire model of securitization at risk; runs on hedge funds and other financial institutions that do not have access to the Fed’s lender of last resort support; a sharp increase in corporate defaults and credit spreads; and a massive process of re-intermediation into the banking system of activities that were until now altogether securitized.

    Or in other words, a “generalized systemic financial meltdown.”

  28. Eric Davis says:

    with core at 1.8
    and mainline at 2. whatever

    that means if you have the luxurie of eating and drive a car you are down 2.5 percent.

    But if you started in the Albanian Lek or any of the other 200 or so global “overbought” currencies you are down 20% wait… 21.4%core 23.5%mainline

    Fortunatly your not in a A rated ACA backed bond, because your down 92.6%… Unless you started in the Euro…..
    At that point you get sucked into some kind of quantum hole.

    Hey… When does it become cheaper to burn asset backed paper than heating oil?

  29. VJ says:

    Your investment returns Year-to-date are = 0.00%

    And down like 25% since 2000 in inflation-adjusted dollars.

    Go easy on the gravy.

  30. bsneath says:

    Nouriel Roubini – what an upbeat guy!

  31. bsneath says:

    According to Calculated Risk, the credit panic has spread to Asia in a big way. Where is Ben and his helicopter when we need it? I think the Fed is going to wait until the last possible minute before acting – to ensure that the lessons are learned.

    btw and only slightly off topic, how in the $%#& can Investment Banks justify bonus levels even higher than last year’s under the circumstances they are facing today? Afraid off losing their best Investment Bankers? – more like taking from the till before it runs dry!

  32. Winston Munn says:

    Here are a couple of related items parsed together from the Minyanville crew – if not priced in already, we may soon be thinking of SPX 0.0% as the good ol’ days.

    First this, “….the European banks have been the major liquidity providers to the asset-backed commercial paper market. Those banks’ ability to meet their liquidity obligations to refund maturing paper is a clear sign as to whether this cycle can wind down in an orderly fashion, or whether there will be a panic.”

    Now add this from today, “Renewed credit turmoil and volatility led the European Covered Bond Council (ECBC) on Wednesday to suspend inter-bank market-making in covered bonds until Monday, Nov. 26. The move is a sign of the stress in the covered bond market, which is dominated by German institutions that have almost a trillion euros of covered bonds outstanding.

    ‘Quite a substantial part of the recent spread widening, particularly in the last three to four days, was driven by the mechanics of the inter-dealer market making obligation,’ he said. ‘There is even some evidence that those bonds that are of high liquidity have been more heavily penalised than those which are less liquid.

    Due to general market conditions and the specific mechanics of the inter-dealer market making it even seems possible that inter-dealer market making will not be resumed this year,’ Anhamm said.”

    The next few trading days might get interesting.

  33. justin says:

    Glas Segal…call Johnthan!

  34. David says:

    Congratulations, you have a great blog Year-to-Date, however, the year is not over and perma-bull could have a Miracle Comeback.

    “What the declined is
    He shall as soon read in the eyes of others
    As feel in his own fall; for men, like butterflies, Show not their mealy wings but to the summer, And not a man, for being simply man, Hath any honor, but honor for those honors That are without him, as place, riches, and favor, Prizes of accident as oft as merit; Which when they fall, as being slippery standers, The love that leaned on them as slippery too, Doth one pluck down another, and together Die in the fall.”
    William Shakespeare

  35. The Dirty Mac says:

    Speaking only for myself, I am thankful that I live in the United States in 2007 and therefore have a higher living standard than 99+% of all the people who have ever lived.

    And Cranker we can bring back Glass Steagall, but enforcement will require smashing a lot of computers.

  36. The Dirty Mac says:

    Speaking only for myself, I am thankful that I live in the United States in 2007 and therefore have a higher living standard than 99+% of all the people who have ever lived.

    And Cranker we can bring back Glass Steagall, but enforcement will require smashing a lot of computers.

  37. The Dirty Mac says:

    Wait a minute. Where do the banking regulators promoting loan programs for those who cannot finance houses under standard terms fit into all this? Its been a significant theme for many years.

  38. I'm a Socialist says:

    Whats wrong with giving money to people who can’t repay it? Don’t they have a right ( its somewhere in the Constitution) to it. Well then, all the rest of you will have to kick in to clean up my mess. I meant good, though.

  39. Chief Tomahawk says:


    Your investment returns Year-to-date are = 0.00″

    Yeah, thanks BR! All I have to do is inflation-adjust and that 0.0% becomes a crooked red number.

  40. brion says:

    “Speaking only for myself, I am thankful that I live in the United States in 2007 and therefore have a higher living standard than 99+% of all the people who have ever lived.”

    Dirty Geedy Mac, WTF has that got to do with anything?

  41. brion says:

    “Speaking only for myself, I am thankful that I live in the United States in 2007 and therefore have a higher living standard than 99+% of all the people who have ever lived.”

    Dirty Geedy Mac, WTF has that got to do with anything?

  42. Movie Guy says:

    Barry – “Fed-Model-says-stocks-are-cheap / Sub-prime-doesn’t-matter / Valuations-are-reasonable / Buybacks are great / Consumers-are-fine / Earnings-are-great / there-is-no-inflation”…

    Well done. That covers it.

    Happy Thanksgiving.

  43. Movie Guy says:

    Speaking of investment returns, here’s my last major investment for this month. Wrapped it up today.

    I have its sister vehicle, another garnet one – garnet on garnet. Very few were built in this color. Quite rare.

    The 442 is running fine. Pure screamer…

  44. John says:

    That’s right. The S&P has now done a ‘Blutowski’ — 0.0.
    That’s about the same rating I’d give to the Incompetent in Chief…
    Where is Goldilocks 2.0? Where is all of that sidelined money from the retail investor that is just waiting to pour into the markets???
    Corporate balance sheets are flush with Cash. Where is all of that money??? Why is it not finding it’s way to ‘scoop up’ (this crap) at these ‘Rock Bottom” stock prices…?

    Now lets see:
    –Transports have broken through their longterm upward trendline.
    –Financials (Brokers, Banks), Retail, SemiConductors etc. all continuing to be in a dire need of some Pepto-Bismol.
    –Rush Limbaugh (El Rushbo…) Poo-Pooing the CNBS’ers for all of their “Recession Talk” earlier today… Apparently the ‘Man Who Runs the Country’ had (for some apparent reason) tuned into CNBS and launched a ‘counterattack’ to the ‘Drive-By-Medias’ negative commentary on the economy. This happened during todays Propoganda Broadcast, on the ‘Strength’ of the Economy…Oh This Load of HorseSh*t was Absolutely Priceless…
    –Nasdaq looking increasingly held up by fewer and fewer stocks (GOOG and AAPL)…
    -Dow (barely) hovering around critical support area but looking more like it will test 11,750-12,000.
    –Same with S&P at 1410-1430 area. Nas Trendline support at 2400 (2250 — depending on which trendline is used…going back to Oct ’02).
    –But what about the Internals??? Advance/Decline Ratio’s??? Credit Crunch COntinuing to Spread and only beginning Innings of the Housing Market ahh “Correction”.. Nikkei…?
    In my view The Price of Oil needs to crack hard and the dollar needs a strong push up for any chance of a Year End Rally.
    Otherwise GOLDILOCKS (2.0) better Lube Up, Bend Over, and prepare to Take What’s coming to her…
    Because it Would Appear that PAPA BEAR (12.0) has just UnZipped His Fly…

  45. Henrik says:

    It wasn’t all that bad if a person used stop-losses. :) I’m out of the markets and quite relaxed about the whole situation.

  46. Eclectic says:

    Well, looks like the Nikkei held on for trading on Thursday, November 22, 2007… but it was no walk in the park, as you’ll see:

    …and the broader TOPIX lost a bit:

    Here’s Asia/Pacific trading finals for 11/22:

    I actually thought it would be much worse… even to down by 5-10% or more.

  47. anon says:

    re:…Ignoring the patent idiocy of that, 2007 really has been. If you simply avoided financial’s and home builders, you would be many many points above zero. There are tons of stocks both large and small alike that are up huge amounts.

    Is that “portfolio” adjusted for the decline in US currency?…across all trading partners?…and the “incentives required” to transact in said countries?

  48. Jay Weinstein says:

    to be fair, while the headline about SPX is correct, index fund investors are in fact still up 1.6% or so from dividends. You should always use a total return index for comparative purposes.

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