3 THINGS I THINK I THINK
3 November 2009 by Cullen Roche
10 Comments
- This market has the same feeling it has had after the previous ten 5% declines. It just can’t be kept down. Money managers appear to be buying every single dip as they try to play catch-up in the remaining months of the year.
- The gold/dollar conundrum is the most interesting action in the market as both rally higher. But this is a trend that cannot and will not last in the future. Unfortunately, with little to no sign of inflation on the horizon and a Fed that intends to destroy the Dollar, it’s hard to have long side conviction in either.
- Readers and emailers appear to dislike the fact that I knocked the Buffett deal. I should note that it’s not that I dislike the deal or believe it will fail, but simply that the high valuation, stock deal is highly unusual for Buffett. It appears to deviate from his usual modus operandi. And the emailers who have implied that the Goldman deal was some stroke of brilliance must have forgotten that they were the ones who saved Buffett from a colossal mistake via their bailout.
Any thoughts that this is distribution – that a right shoulder will be put in once SPX gets back around 1070-1080 – from a TA perspective. I remember back in the june-july when it was a head/shoulder pattern – but that ultimately failed.
I don’t hang my hat on TA. On the back of strong earnings and this “buy the dip” mentality it’s hard for me to imagine that a sell-off of more than 10% will materialize before year-end.
I think fundamentals don’t matter until 2010. Investors will chase the performance until year end and then realize that the market is overvalued, the stimulus isn’t working and that jobs aren’t coming back.
Buffett would say the Chinese saved us, not the taxpayers.
someone saved his ass that’s for sure. it might have been the taxpayer it might have been the chinese, but he dodged a reputation tarring bullet with that bailout.
Buffet likely has exactly the same insider dope as the Government Sacks puppeteers.
In the long run rail, especially retrofitted to high-speed passenger service, makes perfect sense for almost any future energy regime (even fusion one day). It’s extremely safe, highly efficient, and if the first premise is correct (anyone doubt it?) then count on a major public rail-infrastructure investment in stimulus 2.0—probably just after the (abysmal) holiday season.
The trains could also run on natural gas since they’re hauling fuel anyways, and most/all engines are electric (diesel->electric the same as NG-elect). Must be backed by Pickens and that former viz prez and Khosla.
Gold is being repriced. A credit crisis persists and potentially the killing of the dollar backs a gold play. If the dollar rallies, and a real credit crunch happens, gold should stay elevated.
Gold is a very good play in the next two to three years I believe.
Again, fractional reserve lending is broken, so are fiat currencies.
There are two ways out of this mess: 1) Volker style jacking of interest rates and fiscal sanity (which causes a lot of short term pain – such as 20% UE); or 2) more QE, stimulus, etc., which is the easy way out.
Guess which way we’re going.
At least tonight’s vote hopefully killed healthcare.
quote:
“And the emailers who have implied that the Goldman deal was some stroke of brilliance must have forgotten that they were the ones who saved Buffett from a colossal mistake via their bailout.”
-I think people tend to forget that very successful people don’t get to be successful by the IQ test. They also know people, they know how the government works etc etc. Just like that guy who used to work with for the hedge fund Paulson who bet on the government would come in for the rescue. Or you can take the guy who closed his bearish fund and declare that it was over. Those people make big money because they understand what can affect the economy on the macro scale and they have connection. You guys keep leaving out the biggest equation of them all : the consumer, the government: the human factor.
I’ll put it this way. In Africa, Asia, in ancient time, etc etc, some of the guys who are in charge didn’t even go to school or understand economic but they made it big and become rich. Why?
However, I do agree that this move of Warren Buffet is out of the norm for him. But then again, I don’t even know what is the norm of Warren Buffett…
I agree the mkt could try an upmove now…I closed my shorts