Comments on: Renewed Risk Appetites Cause Feeding Frenzy

By: leftback

leftback — Wed, 11 Mar 2009 13:52:01 +0000

As Ritholtz has pointed out many times, 5% up days never occur in bull markets so this is quite obviously another bear market rally. Which is not to say that it might not rumble upwards for a while. But obviously there are more icebergs out there. I am planning to feed some fish this morning when we see 740 overhead. The interesting thing will be to see if we subsequentlymake a higher low , as that would be an indication of a longer bear rally.

By: jterlau

jterlau — Wed, 11 Mar 2009 12:56:26 +0000

Well articulated summary of the days events – I always look forward to seeing the McHugh commentary on the BP Cafe.
I would also point out the “drift to the middle” some democrats seem to be embracing as it relates to the highly contentious card check legislation. Front page WSJ article yesterday spells out the issues well. Perhaps the market was extrapolating this “capitalistic” drift on this issue and others to come as well….

By: rktbrkr

rktbrkr — Wed, 11 Mar 2009 11:54:33 +0000

Anybody believe CITI will have a profitable 1Q after Pandit’s claim of good results in Jan & Feb? It’s a mark of his desperation to goose up the share price by issuing misleading statements like this. Wachovia and WFC issued downward revisions of Q results after “beating” initially reported results last year, another variation of gilding the lily. Of course the uS gov does the same with emplyment reports each Q and now that they are CITI’s largest shareholder they aren’t going to oppose a little dissembling by sahib Pandit.

By: Kyle

Kyle — Wed, 11 Mar 2009 10:55:30 +0000

Another thing I wanted to mention… Goldman Sachs’ 2007 annual report claimed a $2 trillion notional exposure to derivatives…. Now, I’m sure that not all of these are going to be claimed; GS will not be out 2 trillion in the next 5 years (I hope…), but wasn’t AIG’s notional exposure in the same ballpark? My main point is that what these companies do is mostly private, they have a habit of withholding important information until they are almost or already bankrupt. Any sane investor will view whatever good news they choose to share very skeptically.

By: Kyle

Kyle — Wed, 11 Mar 2009 10:00:24 +0000

Great post, I really like these BP cafe articles.

You say “Thus, I agree with Jeremy Grantham when he says “there is still a 50-50 chance of crossing 600 on the S&P 500″. ” There’s always a 50-50 chance any market will go up or down on a given day, I don’t see why this is worth mentioning.

We will see a recovery when we see more positive fundamentals. Citibank announces that after billions of dollars in free government loans it is on the path to solvency, and the markets go up 6%. The other reasons you mention are all government related, which by your logic means that the markets are all counting on the government to save them from themselves. There is clearly not enough transparency in the financial sector for any investor to know what is really going on; these jumps based on the possible announcement of possible ways to take toxic “assets” off the bank’s books are just jumps, gravity will again work its magic. If the public ever finds out how many of these companies’ “assets” are actually liabilities, then we’ll probably be happy if the S&P 500 stays above 300. This is a sucker’s rally if I ever saw one. It might last a few days, a week, or even a month, but I am sure we will be testing new lows once everyone realizes this was based on nothing.

By: best-vecher

best-vecher — Wed, 11 Mar 2009 06:30:36 +0000

личшие блоги рунета…

As oversold as equities had become, it might have taken only one or two reasons to set off[...]…

By: usphoenix

usphoenix — Wed, 11 Mar 2009 04:59:39 +0000

How very fascinating that so many having a quite lucid view of the situation are so completely on the sidelines. Lots of talking heads trying to juice the market. Even BR got trapped. Well hey, someone’s got to be interested in the market. And without investors BRs kind of like out of customers.

OK, BR was quite honest for a while. It’s called credibility. So, after weeks of being a bear, he says jump, and everyone jumps. That’s OK.

Well there are investors, traders , and players.

I appreciate your honest assessment. What, are you independently wealthy, or just trying to be a decent honest person. Whatever, I like it.

Everyone knows, or should know, the market is a zero sum game. For every million “investors” you suck in, the players walk away with a billion.

The tragedy is many, many really smart people “earn a living” playing the market because that’s their best hope.

How very sad they don’t have a more productive choice, but real. Life in America.
And hey, if that’s what it takes to get ahead, that’s the American way.

Thanks for the chance to comment.