Comments on: Is Profitibility or Technicals Driving Equity Markets? http://www.ritholtz.com/blog/2009/11/is-profitibility-or-technicals-driving-equity-markets/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Wed, 15 Feb 2012 00:33:57 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: Market Talk » Blog Archive » Links 11/30/2009 http://www.ritholtz.com/blog/2009/11/is-profitibility-or-technicals-driving-equity-markets/comment-page-1/#comment-238244 Market Talk » Blog Archive » Links 11/30/2009 Mon, 30 Nov 2009 19:19:02 +0000 http://www.ritholtz.com/blog/?p=44969#comment-238244 [...] to recover sooner rather than later for the stock market to keep running higher. Barry Ritholtz isn’t so [...] [...] to recover sooner rather than later for the stock market to keep running higher. Barry Ritholtz isn’t so [...]

]]> By: Joseph Martinez http://www.ritholtz.com/blog/2009/11/is-profitibility-or-technicals-driving-equity-markets/comment-page-1/#comment-238077 Joseph Martinez Mon, 30 Nov 2009 01:04:30 +0000 http://www.ritholtz.com/blog/?p=44969#comment-238077 The question is weather or not you believe that we are in a secular bear market that start around 2000. If you believe that we are in a secular bear market then you have to ask yourself to what effect did the credit bubble have on this secular bear market. Besides taking down the financial system and changing the way we down business the collapse is causing the boomers to work longer then they have planned. The boomers who are working longer will not being spending their money the way they have in the past. It is how the time to save and make up for the lost ground. This is the reason why we are seeing a lot of money of the sidelines. The boomers who have seen their investments collapse have also had their risk tolerance collapse. This will cause a ripple effect on employment for generation x and y as we are already seeing that they are the hardest hit in the unemployment lines. The money that generation x that would be putting back into the economy if they were employed or fully employed is not there. This will extent the secular bear market beyond its normal life span. This gives reason why the Feds have done to much to save the system. If the Feds believed that we are in the middle of a secular bear market they they would known that they have done enough to "save the financial system" with the TRAP and TALF programs. That interest rates need to be raised to 5% and the financial system can be fixed over the next ten years. The year 2009 is not going to be the year when the market heads back to equilibrium. The question is weather or not you believe that we are in a secular bear market that start around 2000.
If you believe that we are in a secular bear market then you have to ask yourself to what effect did the credit bubble have on this secular bear market. Besides taking down the financial system and changing the way we down business the collapse is causing the boomers to work longer then they have planned. The boomers who are working longer will not being spending their money the way they have in the past. It is how the time to save and make up for the lost ground. This is the reason why we are seeing a lot of money of the sidelines. The boomers who have seen their investments collapse have also had their risk tolerance collapse.
This will cause a ripple effect on employment for generation x and y as we are already seeing that they are the hardest hit in the unemployment lines. The money that generation x that would be putting back into the economy if they were employed or fully employed is not there. This will extent the secular bear market beyond its normal life span.
This gives reason why the Feds have done to much to save the system. If the Feds believed that we are in the middle of a secular bear market they they would known that they have done enough to “save the financial system” with the TRAP and TALF programs. That interest rates need to be raised to 5% and the financial system can be fixed over the next ten years.
The year 2009 is not going to be the year when the market heads back to equilibrium.

]]> By: van schaik http://www.ritholtz.com/blog/2009/11/is-profitibility-or-technicals-driving-equity-markets/comment-page-1/#comment-238024 van schaik Sun, 29 Nov 2009 18:01:04 +0000 http://www.ritholtz.com/blog/?p=44969#comment-238024 We are definitely not in a comparable period now. The Great Bull Market of 1982 - 2000 was ignited by a long term interest rate peak which broke the dominant mood of the inflationary 1970's, very similar to the interest rate peak in the early 1920's which was the response to the inflation of WWI. The 1920's also saw a major bull market in stocks, followed by a major contraction of economic activity. The markets are not similar in macroeconomic motivation, but the bottom of the Great Depression was still a great time to buy stocks. It was a great time to buy because the overreaction to the sell side took the market back to where it stood at the beginning of the bull market. I just don't think we've reached the bottom of this contraction quite yet. We've still got some more reacting, and overreacting, to do. http://jpetervanschaik.googlepages.com We are definitely not in a comparable period now. The Great Bull Market of 1982 – 2000 was ignited by a long term interest rate peak which broke the dominant mood of the inflationary 1970′s, very similar to the interest rate peak in the early 1920′s which was the response to the inflation of WWI. The 1920′s also saw a major bull market in stocks, followed by a major contraction of economic activity. The markets are not similar in macroeconomic motivation, but the bottom of the Great Depression was still a great time to buy stocks. It was a great time to buy because the overreaction to the sell side took the market back to where it stood at the beginning of the bull market. I just don’t think we’ve reached the bottom of this contraction quite yet. We’ve still got some more reacting, and overreacting, to do. http://jpetervanschaik.googlepages.com

]]> By: How the Common Man Sees It http://www.ritholtz.com/blog/2009/11/is-profitibility-or-technicals-driving-equity-markets/comment-page-1/#comment-238020 How the Common Man Sees It Sun, 29 Nov 2009 17:50:20 +0000 http://www.ritholtz.com/blog/?p=44969#comment-238020 I'm thinking the trillion dollar deficit had something to do with it. They had to go somewhere. They seem to have petered out. ......next.... BTW, I'm reading the Sirens of Titan right now. This is a market Vonnegut would have loved I’m thinking the trillion dollar deficit had something to do with it.

They had to go somewhere. They seem to have petered out.

……next….

BTW, I’m reading the Sirens of Titan right now. This is a market Vonnegut would have loved

]]> By: dougc http://www.ritholtz.com/blog/2009/11/is-profitibility-or-technicals-driving-equity-markets/comment-page-1/#comment-238015 dougc Sun, 29 Nov 2009 17:33:37 +0000 http://www.ritholtz.com/blog/?p=44969#comment-238015 P/E expanded during the 1982 to 2000 bull market, also interet rates and inflation fell, the consumer wasn't overextended, and new technologies drove the economy and high quality jobs were plentiful. Not sure we are in a comparable period. P/E expanded during the 1982 to 2000 bull market, also interet rates and inflation fell, the consumer wasn’t overextended, and new technologies drove the economy and high quality jobs were plentiful. Not sure we are in a comparable period.

]]> By: Sunday links: party poopers Abnormal Returns http://www.ritholtz.com/blog/2009/11/is-profitibility-or-technicals-driving-equity-markets/comment-page-1/#comment-238006 Sunday links: party poopers Abnormal Returns Sun, 29 Nov 2009 17:02:09 +0000 http://www.ritholtz.com/blog/?p=44969#comment-238006 [...] Beginning of a bull market or simply a huge oversold bounce?  (Big Picture) [...] [...] Beginning of a bull market or simply a huge oversold bounce?  (Big Picture) [...]

]]> By: wally http://www.ritholtz.com/blog/2009/11/is-profitibility-or-technicals-driving-equity-markets/comment-page-1/#comment-237995 wally Sun, 29 Nov 2009 16:18:15 +0000 http://www.ritholtz.com/blog/?p=44969#comment-237995 Perhaps there is another factor beside profitability and technical reasons? Perhaps there is another factor beside profitability and technical reasons?

]]> By: BuffaloBob http://www.ritholtz.com/blog/2009/11/is-profitibility-or-technicals-driving-equity-markets/comment-page-1/#comment-237993 BuffaloBob Sun, 29 Nov 2009 15:51:09 +0000 http://www.ritholtz.com/blog/?p=44969#comment-237993 "with enough self induced Wall Street disasters- the public will remove themselves from the stock market medicine show and invest in safer assets" ahab, I love that line. It seems to describe the current situation precisely. “with enough self induced Wall Street disasters- the public will remove themselves from the stock market medicine show and invest in safer assets”

ahab, I love that line. It seems to describe the current situation precisely.

]]> By: Steve Barry http://www.ritholtz.com/blog/2009/11/is-profitibility-or-technicals-driving-equity-markets/comment-page-1/#comment-237984 Steve Barry Sun, 29 Nov 2009 15:13:23 +0000 http://www.ritholtz.com/blog/?p=44969#comment-237984 Stats can be misleading and manipulated...but sometimes they tell the whole story. This is a low volume cyclical bull, to such a degree that it is an outlier in the data of how far it has gone combined with its low volume, per Bill Hester from Hussman Funds: http://www.hussmanfunds.com/rsi/PhoenixVolume.htm Stats can be misleading and manipulated…but sometimes they tell the whole story. This is a low volume cyclical bull, to such a degree that it is an outlier in the data of how far it has gone combined with its low volume, per Bill Hester from Hussman Funds:

http://www.hussmanfunds.com/rsi/PhoenixVolume.htm

]]> By: Pat G. http://www.ritholtz.com/blog/2009/11/is-profitibility-or-technicals-driving-equity-markets/comment-page-1/#comment-237983 Pat G. Sun, 29 Nov 2009 15:09:54 +0000 http://www.ritholtz.com/blog/?p=44969#comment-237983 "Driving Equity Markets"? No interest being paid on deposits, savings, Treasuries or CDs, easy money, ZIRP, liquidity and carry traders. While cost cutting (firings) positively effects the bottom line of most companies, you can't really believe that continuing to cut the consumers throat is a recipe for financial success forever... “Driving Equity Markets”? No interest being paid on deposits, savings, Treasuries or CDs, easy money, ZIRP, liquidity and carry traders. While cost cutting (firings) positively effects the bottom line of most companies, you can’t really believe that continuing to cut the consumers throat is a recipe for financial success forever…

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