Markets Gain 12%
By Barry Ritholtz - March 12th, 2009, 4:00PM
Dow industrials gain 238 points, up 3.4%, at the closing bell. S&P 500 up 3.9%; Nasdaq up 3.9%.
From the Monday lows, the markets have now gained 12%. The S&P surged 11% since March 9.
The bank sector has seen a 45% gain; Homebuilders up 20%.
Crude Oil for April delivery gained $4.70 (11%), to $47.03/barrel. GM rose 17%.
GE added 13% — despite losing the AAA ranking that it held since 1956 — and is up 68% since Monday
March 12th, 2009 at 4:11 pm
Barry,
Any guestimates on how high it goes before the rollover?
March 12th, 2009 at 4:13 pm
I love how CNBC is trumpeting the fact that GE is up 65% the last few days. What sucks for them is the worst is far from over. This is just another suckers rally.
March 12th, 2009 at 4:18 pm
for me:
fundamentals analysis (fa) did not work.
ta did not work.
fa+ta did not work.
ta+fa did not work.
last two months i am trying sentiment+psychology, it looks like it is working
.
March 12th, 2009 at 4:20 pm
BR noticed:
Crude Oil for April delivery gained $4.70 (11%), to $47.03/barrel.
reply:
I told you so a few weeks ago. Nymex oil has returned to normal parity with Brent. Fools are confusing the parity with a rise in intrinsic value. It will probably pass $50 soon in an idiot’s overshoot. Unfortunately, I was wrong about Oil Services. I didn’t anticipate the recent market crush. That killed the quick profits I expected in that sector. I still think Oil Services is an excellent buy and hold if your time horizon is 12 months or more.
I was also right about Nat Gas … Upper $3 now and probably going lower still. It might see the upper $2 range this summer during the slow season. Back to normal. Finally. Copper is showing strength. It’s too early to say, but it might be a good sign for the future.
March 12th, 2009 at 4:20 pm
There is about as much conviction in these prices and in this market as I have for a 100 dollar jalopy bought from a Craigslist ad from a guy under a Bridge in Chelsea, MA.
March 12th, 2009 at 4:21 pm
Watch crude and glod and other commodities. If the government’s monetary madness continues according to design (not intent, but design), it will begin flashing inflation signals, or perhaps, already has. Ho hum, here we go again.
March 12th, 2009 at 4:26 pm
“Watch crude and glod and other commodities”
Nope, watch leading indicators. The economy looks like it began trying to leave recession starting in December/January. BUT signs of another credit stroke happened in February. If leading indicators decline as I suspect, that will short everything out as we realize the economy is getting worse, including commodities.
Leading Indicators is a good proxy for where the economy will head down the road. If they continue to rise, the NBER recession will end mid-year. If they relapse(as I suspect), the economy will falter through the end of the year in NBER recession.
Government data will lag it. The market is having a suckers rally based on the expected squeeze. About time FWIW.
March 12th, 2009 at 4:31 pm
Too far up, too fast. BR, when are you going to start calling the end of this dead cat bounce?
March 12th, 2009 at 4:37 pm
it’s over, that was THE bottom. we’ll go up and down in established ranges, but won’t sink further than what we’ve seen already
March 12th, 2009 at 4:40 pm
I notice that all the people screaming about the decline being Obama’s fault are quiet about the rally being his. a double standard?
March 12th, 2009 at 4:45 pm
“it’s over, that was THE bottom. we’ll go up and down in established ranges, but won’t sink further than what we’ve seen already”
Then you better hope credit stops contracting again, like it is doing now. The market was just pricing in that contraction, before the squeeze based on frandly, useless data and manipulation by bankers.
March 12th, 2009 at 4:50 pm
Rallies like this don’t happen in bull markets…also won’t continue with 21 day put/calls at 3 year lows.
March 12th, 2009 at 4:51 pm
It looks like the bottom in the market that we forecast in early February is finally forming (a month later than we were hoping, although within the 80% probability of one forming within two months of the spike we observed in our Price-Dividend Growth Rate Ratio for January 2009.)
Using a different forecasting technique, we were able to predict the range of the bottom just last week. What appears to be happening now is that investors are shifting their focus 9-10 months into the future, coinciding with a positive expected dividend-driven acceleration in stock prices, which we suspect is what’s behind the current move upward.
The timing of this move isn’t an accident. With 2009Q1 closing, a new dividend futures contract has opened, which when combined with the positive statements from certain distressed quarters this past week, is in part responsible for the more forward-looking shift in investor focus. We’ll have more on this next week as more information comes in, which hopefully will confirm our outlook.
March 12th, 2009 at 4:53 pm
SPX up 84 points (almost 13%) from Leftback’s Intra-Day Bottom on Friday last week.
The market is going to pull back at some stage but the next serious resistance will be met around SPX 780-800.
I did mention last week that the Bear will maul anything that he catches wandering in the woods.
Bruce, Mark, have you by any chance seen Mr. Shorty lately? I thought he was with you….
March 12th, 2009 at 4:56 pm
The Chinese are stockpiling commodities (especially copper) in anticipation of a return of U.S. demand for their exports. All that bank lending they are touting is going into inventories. We will have another mini-crash in commodities when they run out of room to store stuff and quit buying “low-priced” commodities. Not so good for Brazil and Australia. Fed Reserve Presidents are still talking about pulling liquidity from the system to prevent inflation. Buy bonds, Investment Grade and Treasury, none of the junk stuff they want to palm off on you.
March 12th, 2009 at 4:56 pm
baccardi84 Says:
March 12th, 2009 at 4:37 pm
“it’s over, that was THE bottom. we’ll go up and down in established ranges, but won’t sink further than what we’ve seen already”
______
So, if I read your comment correctly, it’ll vacillate between 6500 and 14450?
March 12th, 2009 at 5:07 pm
That was the bottom! That was the bottom! I’m calling the bottom! Oh, I’m a nobody and no attention will be paid to my call?!?! Oh, damn and I was trying to get my 2 minutes of fame. Oh, well, I guess I will go back to sleep if nobody wants to listen to me.
March 12th, 2009 at 5:11 pm
ok baccardi84- i’ll bite. How do you know that 676 was the bottom for the S&P??? Enlighten me.
March 12th, 2009 at 5:16 pm
the bigger this rally the more painful a reversal might be. My recently retired folks are on a cruise and the topic du jour is closer to selling than holding – so i’m sure this rally is a viewed as a blessing and fueling some prayers. A nasty reversal might be enough to induce some panic.
March 12th, 2009 at 5:20 pm
“That was the bottom! That was the bottom! I’m calling the bottom! ”
dean, are you calling the bottom? I think you’re taking this way too seriously…
March 12th, 2009 at 5:22 pm
The Barry Ritholtz-Jon Stewart Rally rolls on. Close on 750 is not too shabby. Tomorrow? Coin toss.
As for the low volume, that is surely an indication that retail is gun-shy. What traders failed to grasp in recent weeks is that relentless tantrums over nothing more than their visceral dislike of Obama may have been a bridge too far for many retail investors. It’s likely that the Stewart skewering of CNBC resonated because it caught the crest of the “WTF?” frustration wave.
With the first Boomers retiring a lot of long-term money is out of stocks for good. The Father Knows Best crowd are the ones closest to the Depression in terms of the stories they were told by their parents and grandparents. That’s a lot of psychological baggage to overcome to draw sideline money back into equities.
March 12th, 2009 at 5:25 pm
There is the little matter of needing to retest the new low before we can call a bottom in place…
March 12th, 2009 at 5:28 pm
Here we go again with the bottom calls. THE bottom will be in when there are no longer any comments on this board calling THE bottom and the crickets are chirping in the background.
March 12th, 2009 at 5:29 pm
no retest needed- just ask bacardi84- he’s got it all figured out.
March 12th, 2009 at 5:29 pm
I know several folks who using this rally as an opportunity to take what’s left of their 401k and convert to physical gold. This rally has covered the early withdrawal penalty for them.
I’m still 30/30/30/10….QID/SDS/TBT/GLD….and sleeping well.
Yep. We could have seen the bottom. But if that’s true the markets are so jobbed there is no point in participating anymore.
Did the latest Fed Debt # come out yet Mr. Barry??
March 12th, 2009 at 5:30 pm
And I too am wondering where all the Obama-is-tanking-the-market-bashers and ideologues are now that the market obviously moved up in a big way directly because of his policies (snark snark).
March 12th, 2009 at 5:30 pm
Mannwich,
How do you like my WFC call from several days ago now? 60+% in less than a week. I’ll take it……
I still like WFC for the long haul. I think people will be blown away by their 1Q earnings…… that is why I love it once the analysts have all priced in armagedon. This is a great time to make some quick bucks playing the long side (even if it is only temporary). Remember, as Barry used to say back in 2006 and 2007, the market doesn’t only go one way forever… good words to live by.
March 12th, 2009 at 5:31 pm
My last word on bottoms for today: most of us (although not all) expect to eventually see the formation of an Apathy Bottom, along the lines of 1974, with low P/E ratios in the single digits, low volume, low media interest and low volatility, perhaps some time in the summer, after Sell in May and Go Away.
Anyway, I am off for a run, perhaps I will see even more bottoms this evening.
March 12th, 2009 at 5:32 pm
I feverishly trimmed/dumped some longs (ACI, VLO, DIG) at the close and picked up FAZ, QID and EEV. Will likely pick up more SRS tomorrow unless it shoots up right out of the gate. Tells what I think of those “bottom” calls.
March 12th, 2009 at 5:32 pm
@leftback
Naw, this is very humorous and I’m not taking anything serious. What is humorous is the number of “experts” who take themselves serious (therefore my attempted jab at humor). What did I just say???
March 12th, 2009 at 5:34 pm
csb Says:
March 12th, 2009 at 4:40 pm
I notice that all the people screaming about the decline being Obama’s fault are quiet about the rally being his. a double standard?
Reply:
I’ll gladly give him all the credit, if it will get all those hyper-sensitive Obamaphiles to shut up. I’ll go one further, and say the market is going up because the government has finally run out of new economic policies du jour, so indeed, the Bush/Obama economic team’s fatigue is exactly the reason for the market’s rally. (Common thread: Little Timmy)
But watch it crater again when Timmy trots out another new plan to quasi-nationalize a sector of the economy that isn’t already.
Btw, what’s up w/ Lewis and Pandit claiming two months into a quarter that they’re making money hand over fist? Lewis said they were going to earn $50b this year! Wow. Anyone believe it?
March 12th, 2009 at 5:35 pm
Great guess, jdamon33. You got a little help from those little “we’re making a profit” “leaks” from Pandit, Dimon and Lewis though. Sometimes ’tis better to be lucky than good (and I’d much rather be lucky than unlucky, that’s for sure). Mr. Market has a way of slapping those who get a little too high and mighty. I know from first-hand experience.
I still wouldn’t touch the big financials with a ten foot pole for an “investment”, especially now. Good luck to you on that one. I do my banking with WFC and actually like their service a lot. I hope they make it.
March 12th, 2009 at 5:43 pm
I think everyone knew we were due for a little bear mkt pop b/c mkts never move in a straight line but this has been too far too fast. Agree with the others that said this was too far too fast, healthy markets don’t act like this. Reminds me of the run Citigroup had from $14 to $20 in September.
Must be painful to have bought all those June $2.50 puts on GE right now. BTW – the economy is still worsening (channel checks indicate corp travel down, tech spending falling, etc, etc, etc).
March 12th, 2009 at 5:43 pm
@Cy:
yes…52.6 Trillion in Total credit…14.2 T GDP…gets us to a new record, 370% of GDP. I tis mind boggling really…this has to get down to about 150% IMO…that would be 31 trillion in debt that must either be paid or default…and that is just in the US. Seems UNDOABLE to me within the confines of the current regime.
March 12th, 2009 at 5:45 pm
Carter Worth hanging his hat on the fact that semiconductors are not confirming the lows..hey the price of egg rolls is not either…I may go long.
March 12th, 2009 at 5:46 pm
Larry Jeddeloh of The Investment Strategist was just on Bloomberg with Pimm Fox and he said the S&P will head to 400 in the 3 years. Suggesting a Mid East conflict within that time where Isreal will be alone, US & Iran will be buds & the conflict begun perhaps by Russia. Recommend Glod, Oil and Ags. May be talking his book but who knows…………
March 12th, 2009 at 5:49 pm
to all those requesting i prove something: i’m making this shit up, just like the rest of you who claim to know what will happen based on reading the stars…errr charts
March 12th, 2009 at 5:56 pm
> GE added 13% — despite losing the AAA ranking that it held since 1956 — and is up 68% since Monday
Oh no, it looks like we are in an irrational exuberance bubble again!!!
March 12th, 2009 at 5:57 pm
Sorry…….Larry Jeddeloh is with The Institutional Strategist………….
March 12th, 2009 at 6:00 pm
baccardi84 Says:
March 12th, 2009 at 5:49 pm
to all those requesting i prove something: i’m making this shit up, just like the rest of you who claim to know what will happen based on reading the stars…errr charts
That’s cool…we know as much about why the markets do any particular thing as we know about why that guy killed 10 people in Alabama yesterday. The human mind wants a causative world that makes linear sense, but sometimes it just don’t.
March 12th, 2009 at 6:05 pm
@ Steve B
Steve, I’ve seen you talk about this a lot lately:
Rallies like this don’t happen in bull markets…also won’t continue with 21 day put/calls at 3 year lows.
How come you put so much weight on the put/call ratio? Seems like the hedge funds have super low net long positions, lower than they have in years, and lots of puts are bought as protection on a long, not the actual trade. Just curious seeing as how you have done so well the last year and half.
Have you bought any miners yet?
March 12th, 2009 at 6:07 pm
Steve,
One other ?
Did you update your chart yet on debt/GDP.
Also, isn’t it possible to pay the debt down by printing as much money as possible thus making the total size of the debt, smaller. In other words, inflate our way out of it. What do you say to that argument?
Thanks in advance.
March 12th, 2009 at 6:09 pm
YIPEEEEEEEEEE!!!!!! 1997 levels. we are losing 600k jobs a month. the world is converting to zirp and quantitative easing. SNB is in a panic as they join in everyone who wants to devalue their currency. the braindead view m2m as a catalyst when in reality it just postpones the road to oblivion. bank execs trying to mouth their toilet paper is hysterical. looks like some short covering that is all. when the next plunge start i expect s+p 600 to be broken and eventually a 450 s+p
March 12th, 2009 at 6:26 pm
Ben22:
yes, I did update debt/gdp (see somewhere above)…now 370%…scary as all hell, it is still rising.
As for my weight on put/calls, I have said many times it is not my main criteria to be short…the debt number is. I am short and hold…I don’t trade…I look at put/calls, because of course one day I will sell QID, but I certainly would not do it with put/call at 3 year lows…I would do it at 3 year highs. I’m sure many here diod very well last year by shorting or in options, but I’m the only person I know personally who is not going bananas with fear…I’m not happy about a depression, but I don’t fear it, I expected it for years.
As for inflating our way out of it, we inflated our way into it, so I don’t see it as possible.
March 12th, 2009 at 6:36 pm
@StevieB-
What if short sellers are now buying “married calls” to hedge their short positions? Wouldn’t that throw off your put/call ratiometric?
March 12th, 2009 at 6:50 pm
baccardi84 says:
“to all those requesting i prove something: i’m making this shit up, just like the rest of you who claim to know what will happen based on reading the stars…errr charts ”
Good one! I was looking for some TA bullshit.
March 12th, 2009 at 6:51 pm
I would not be surprised to see more ups and downs with even more swings in the near future, like up 35% one day, down 40 the next, day up again 20%.
It’s just a tell tale sign of chaos starting to form. It’s like a propeller in water, if you drive too fast too quick, it will cavitate, and all you get are bubbles….wait…did I just mention bubbles?
Oh and by the way, same goes for helicopters, a really bad pilot can actually stall and loose all lift.
Keep that in mind, Mr Bernanke.
I still think we’ll hit Dow 3000 before 2010.
March 12th, 2009 at 6:55 pm
Citi and BAC don’t expect to need any more bailouts, I mean, capital. I sure am convinced. The bottom is in. Mark my words – if they’re wrong and come back to the trough for more, there will be some ugly behavior by the masses this summer.
March 12th, 2009 at 7:01 pm
It’s good to be King. Peculiar timing on that little memo “leak.”
Four Citigroup Inc. executives who bought the bank’s stock last week generated a $2.2 million paper profit within nine days, regulatory filings show.
http://www.bloomberg.com/apps/news?pid=20601109&sid=awCfRZC6DSDA&refer=home
March 12th, 2009 at 7:04 pm
@Steve Barry – That debt/GDP number, I think I read somewhere that it may be inflated because it double counts mortgage debt…both the mortgages and the securities created therefrom. Not that it would matter much in the aggregate, but I’d be interested to know the truth of it.
Long gold futures at 896 and short SP500 futures at 746. I’m inclined to hold them both, but will probably take the loss if SP500 clears 752 or so. If Friday the 13th is lucky for bulls, that’ll be ironic.
March 12th, 2009 at 7:33 pm
Glod and sliver are to investors as concrete shoes to a mob hittee at the bottom of the Hudson
March 12th, 2009 at 7:33 pm
The reality is that sentiment and psychology points to this being some sort of bottom. Probably not THE bottom, but it is a tradable rally.
AAII sentiment is at unbelievably low levels. Technical indicators have been oversold for quite some time. GE was able to get an 8bln debt deal donew (only with FDIC support, but it got done…) indicating some appetite in the credit markets. put/call ratios got overly pessimistic last week. Tuesday upside volume to downside volume was 22:1 up. It was followed up within 3-5 days with an additional 12:1 up today, further validating Tuesday’s move. Advance/Decline is very nice with broad participation. And to top it all off: Nobody believes it will continue. Which means it will until Cramer is declaring it the new Bull market or Roubini starts getting less air time…
It would be healthy for it to back n’ fill a bit on the way up–something to expect in the next couple days–you’ll know b/c CNBC will be saying “see, I told you it wasn’t real…” We are right at the beginning of upside resistance that has to be chewed through. That is from 745-780. If it can manage to work through that, 805 is the start of the next resistance level. But keep in mind, these numbers were defended heavily on the way down, so they are not a cake walk. Hitting 780 is a 17% gain from the bottom, 805 is 20%. The “Hope” rally (11/26 to year-end ‘08) was 24%—and we went lower after it was done…
It is ok to be short term bullish, long term bearish. It isn’t like being a Democrat of a Republican. You can switch and no one will chastise you. You actually might get more respect, actually… I still think 600 is likely on the S&P500 and there are many smart people in this camp or lower. But I am not foolish enough to think it will get there without rallies on the way down. Look at 2000-2003… there was a minimum of four 20+% rallies on the way down.
For whoever said they tried TA with no luck, but are having good luck with psychology and sentiment–you just said you don’t like tomatoes, but like Romas… But perhaps you have found a part of TA that you understand, and that is good…
Interesting though that treasury yields dropped and gold rose today…
Notice we haven’t had two rising weeks in a row since September. That is a long time and probably an outlier occurrence, although I’m not going to take the time to find out. My gut says next week is up too and breaks the dry spell. Tomorrow I think we see some of the week’s profits booked, making the week’s gains look a little more modest, but still good. If you think next week’s bias is up, then buy when others sell (and sell when others buy…)
March 12th, 2009 at 7:42 pm
The biggest risk is someone in D.C. opens their mouth and says something dumb. One poorly worded item can blast this market out of the water. Fortunately, no one has screwed up in this area this week. But keep in mind, it was Obama’s budget introduction at the end of February that precipitated the 25% drop in all heath related stocks. If you ever doubted the power of words…
March 12th, 2009 at 7:56 pm
@tranchefoot
“What if short sellers are now buying “married calls” to hedge their short positions? Wouldn’t that throw off your put/call ratiometric?”
…that would mean “this time it is really different”…also there are few short sellers, as short interest is very low…possibly because people are buying ultrashort ETFs instead…but then put/calls would be much higher…am I making sense?
BTW, last time I checked, there is more volume in ultralong QQQQ than ultrashort.
March 12th, 2009 at 8:20 pm
“And to top it all off: Nobody believes it will continue. Which means it will until Cramer is declaring it the new Bull market or Roubini starts getting less air time…
It would be healthy for it to back n’ fill a bit on the way up–something to expect in the next couple days–you’ll know b/c CNBC will be saying “see, I told you it wasn’t real…” ”
Someone hasn’t watched Cramer the past couple nights. He is all aboard the bull market trains.
As far as someone saying “I told you it wasn’t real,” it won’t be a CNBC employee, they are all loaded up on the ‘bottom is in’ call.
March 12th, 2009 at 8:21 pm
S&P 750!!! WOOOOO HOOOOO!!!!!!
We’re almost back to where we were …. two weeks ago.
March 12th, 2009 at 8:30 pm
The huge gap at SPX 734.52 set on 02/27 has been closed.
The next major milestone for the bulls is the so-big-you-can-drive-a-trunk-through-it gap at 821.25 set on 02/13.
Curiously, this is also in the vicinity of major resistance as well as the 50-day SMA.
Amazing how that works. But no one said this would be easy.
March 12th, 2009 at 8:40 pm
http://www.investmentpostcards.com/wp-content/uploads/2009/03/reinvesting-when-terrified.pdf
“Finally, be aware
that the market does not turn when it sees light at the
end of the tunnel. It turns when all looks black, but just a
subtle shade less black than the day before.”
Grantham is hardly a permabull, in fact until recently he had been consistently labeled a “permabear”.
March 12th, 2009 at 8:57 pm
I read more Cramer than I watch. Words in print can be measured. His bullishness in print hasn’t reached the frothy point just yet.
He’s just a clown on the TV. But that’s what your supposed to do in order to get advertising dollars and ratings. Sad.
March 12th, 2009 at 9:14 pm
try2beamused:
“The next major milestone for the bulls is the so-big-you-can-drive-a-trunk-through-it gap at 821.25 set on 02/13.”
In the context of the daily candlesticks, I’m not sure I would say you could drive a truck through it….maybe a bicycle. I might suggest that the previous days action on 2/12 actually occupied that gap. Gaps in charts are more notable when no immediate price action occupied it. For instance, the gap you cited around 734 was definitely a gap that needed to be filled as it set a fresh low on a gap. I don’t think you can say the same about the gap on 2/13.
Just something to consider….
March 12th, 2009 at 10:23 pm
Andy Tabbo:
Point taken.
Please pardon the hyperbole. All that relentless financial media pumping, and grumpy geezer permabears turning bullish, and CEOs of insolvent pseudo-nationalized banks boasting of profits and a few consecutive upticks have made me flat out giddy!
March 12th, 2009 at 11:19 pm
@Steve B
God, that chart is scary.
I had not heard about that double counting someone mentioned above on mortgages.
To all,
What are people thinking about the Option ARM and ALT-A resets coming in 2010 and 2011. I find it curious that C and BAC think they need no new capital considering that is coming up. My understanding is that the total size of Option ARM loans is 750 billion, so you can do some simple math and see how the market caps of WFC, BAC, C and JPM couldn’t handle more big losses and they of course will need more capital.
How much of this is priced in? Have many of these pools already been dropped in credit rating?
Last, SRS got absolutely killed the last few days, I’m going to look for a long position there.
Last last, has anyone looked at the options you can buy the XXX ultra’s, that’s where the real action has been the last three days.
March 12th, 2009 at 11:31 pm
I know several folks who using this rally as an opportunity to take what’s left of their 401k and convert to physical gold. This rally has covered the early withdrawal penalty for them.
@ Cy Hastings
No way. You pay tax on the distribution @ ordinary income PLUS the penalty, unless these peeps make no $$ they didn’t have anything, not even the 10% penalty, covered in this rally, in the 401k especially, crap mutual funds didn’t just do better or probably even as well as the market, maybe it could be the case if they work at a bank and bought all the company stock they could a few days ago, but that’s unlikely. They would be better of seeing if the company allows no-penalty early distribution and should roll it to an IRA if so, and there they could buy gold. All you have to do is ask for your summary plan description to see if you have that option, a lot more companies allow it than you would think, otherwise, that’s a dumb idea.
Further, what a sell signal on gold this would be if lots of people did it.
March 12th, 2009 at 11:34 pm
@Mike C
That’s true about grantham but he’s also prepared for the S&P to go as low as 450. That’s a long way down from here. Most people aren’t going to have that sort of game plan.
March 13th, 2009 at 12:22 am
What is so scary on the debt, is you how you hear the pundits referring that we are in a credit wind down, everyone is de-leveraging. Yet the debt outstanding is still rising on a Y-Y basis on most measures. Consumer credit, household, Total Debt. The rates of growth are dropping like stones, but they haven’t reached zero Y-Y , or shrunk. It should happen sometime this quarter.What I’m trying to say is: either there is a lot of debt that is not being captured, of the unwinding is not happening as fast as people keep inferring.
I did do a quick calc, every 1% drop in GDP results in an increase of 4% on the debt to GDP, that is keeping debt levels even. Debt is growing thanks to the Govt, and there are at least 2-3 more negative GDP quarters ahead. Steves call for 130% to GDP is going to take awhile to reach. Not happening this year. I did go ahead and pay for an economagic to get numbers. Saves time. I think tracking debt and some other macro stats will become factors in all investing decisions.
The Market is the Market. I have several positions sitting at their 50 SMA, INTC blew through it’s today, but it’s done that 3 times since december and always comes back, so it is discounted. It’s 50/50, I wouldn’t mind being called out on my positions and be left with cash.
March 13th, 2009 at 3:02 am
This chart from The Economist proves how powerful the media is in shaping perceptions.
http://www.economist.com/daily/chartgallery/displayStory.cfm?story_id=13271781
And how stupid 2/3 of republicans are.
March 13th, 2009 at 2:41 pm
CITI has doubled since Vikram’s internal memo about Jan & Feb profits hit wide distribution in the press. I think it’s safe to say CITI will be very profitable for 2 months and 29 days until the writedowns and bad debts get booked at the end of March, especially if their voluntary foreclosure moritorium ends and they lock in those 40-50% losses on bubble state foreclosure sales.
Suspension of mark-to-market accounting won’t be able to help with bad debt expense and reserves