Comments on: LET’S GET TECHNICAL – EXPECTING AN UPSIDE BREAKOUT

By: Anonymous

Anonymous — Sun, 06 Dec 2009 20:16:32 +0000

If we break higher from here I would have to believe it’s on borrowed time.

Steve Keen (Dec 1st):
“That huge government stimulus has attenuated the severity of the crisis, and led to positive growth figures in many countries…
But it still has not addressed the cause of the crisis–the excessive level of private debt, and the transition from a period of decades in which rising debt fuelled aggregate demand, to one in which the private sector’s attempts to reduce debt will subtract from aggregate demand.

For that reason, I do not share the belief that the GFC is behind us: while the level of private debt remains as gargantuan as it is today, the global economy remains financially fragile, and a return to “growth as usual” is highly unlikely, since that growth will no longer be propelled by rising levels of private debt.”
…
The least politically painful way would be to cause inflation–by for example increasing money wages–and let that devalue the debts, after we had also reformed the financial system to make it virtually impossible to profit by speculating on asset prices.
…
In practice, I expect effective political paralysis over the issue and a drawn out, case by case reduction of debt via the traditional mechanisms of bankruptcy and the like, with some case by case debt reductions as occurred in the Great Depression.
…
I expect instead deflation–low to negative growth with, for a reasonable period, both falling consumer and asset prices. This is what happened during the Great Depression. I don’t expect inflation for reasons that I outline in the Roving Cavailiers of Credit post”

http://www.debtdeflation.com/blogs/2009/12/01/debtwatch-no-41-december-2009-4-years-of-calling-the-gfc/

By: LZ

LZ — Sat, 05 Dec 2009 16:54:39 +0000

Prechter said he will admit wrong if everything makes new high. The charts just show we are tipping toward GLOBAL hyperinflation every day. It is political decision, by GXX, until the policy is revoked, the inflation zero sum game to looting small guys is alive and well. And, It is easy to predict it will take blood and lives to end this madness.

There will be extraodinary opportunity to invest in stocks and RE as hyperinflation takes to extreme, as Marc Faber described as “inflation paradox” but for now, you can’t have enough gold.
Perseving wealth, is still number one priority.

By: LZ

LZ — Sat, 05 Dec 2009 16:36:43 +0000

Philip

Don’t listen what they say, watch what they do. influential people predicting 2nd dip recession is precisely reason people have to long. Because they are telling you how future plays out, but they are telling you what policy they recommend.

By: Philip

Philip — Sat, 05 Dec 2009 16:00:33 +0000

The underlying fundamentals don’t support the market. Even the administration’s big supporter Paul Krugman says the double dip risk is rising. Trim tabs interpretation of the labor data is worth reading.
http://www.businessinsider.com/trimtabs-the-real-job-loss-number-was-255000-2009-12
When the fundamentals and technicals disagree, go with the fundamentals or trade with a twitchy finger.

By: Edna Rider

Edna Rider — Sat, 05 Dec 2009 13:45:12 +0000

If you stand back too far from this analysis you realize how absurd the rally from July has been (I assume the March low was a bit of an overreaction). It was clear in July, with the S&P at 880, that the market was valued a little high (800 is closer to fair value), and most stocks offered little in the way of a margin of safety (or so it erroneously seemed). At that point that real gambling fever took hold (recall AIG’s run from 9 to 50). The Fed did weekly POMO injections, Cash for Clunkers hit, banks reduced their loan loss amounts (to show a profit, which was entirely fictional), and the whole world played along with the “reflation” trade (look at FCX’s run from 45-85, and look how historically high the price of copper is–my view: it should be ~100). So where does that leave us now since the analysis above basically says the market will likely “leak” up but expect a crash at any moment? Is this a time to go all in and basically watch your screen all day? Or should we assume that the government’s around the world will continue to catch every dropped ball and forward the bill to taxpayers?