THE “POP, STALL & SUSTAINED RALLY”
15 August 2009 by Cullen Roche
13 Comments
Goldman Sachs now believes we are in a “sustained rally”:
Click for larger image
Disclosures - Unless otherwise noted, authors have no positions in any securities mentioned and readers should never consider this to be investment advice. Always consult your financial advisor before acting on any ideas.
Comments Guideline - Readers who denigrate authors or other readers will be banned without warning. This site does not tolerate any sort of reader abuse. The goal of this site is to create an environment that is conducive to learning and better understanding of the monetary system and the investment world. We expect readers to behave maturely and responsibly. We welcome and encourage intense and intelligent discourse, but the site adheres to a strict 1 strike policy. While it is your right to speak freely, it is not your right to behave childishly. Above all else, please enjoy the site. It is intended to be used as an educational tool and we hope the intelligent and mature debate will further that purpose. We hope readers will make an effort to respect that goal. Comments with excessive linking or foul language will be moderated before posting.
Comments
Hi TPC, nice to see Goldman’s forecast as of July 17. It would be great if it could be posted here close to when it was released as Goldman appeared to be doing everything right for some reason, $100 million a day. I can’t wait to see your new TPC report.
It’s from an August 12th report….This just came out in chart form.
Goldman is only around because its in bed with the Fed. Saved when Lehman and Bear were let to fail. Made whole on AIG CDS paper even though Goldman themselves said they have minimal exposure to AIG and should AIG fail it wouldnt matter. (cause they had CDS or puts or whatever on AIG with someone else)
Was allowed to become a bank holding company in what? 2 days?
Was given $10B and fed window and fed guarantee basically as margin call dough for it overleveraged wrong way bets…
too big to fail
too connected to fail
Fed put
scum
they touted S&P 500 in march and now 1050 yr end target
listening
acknowledging them
is just as bad as paying attention to Jim Cramer
they deserve no attention
and i stand by my prediction, the bear is over when Cramer’s show is cancelled
You can make any chart you want to support your argument, as along as you exclude any data that contradicts your argument.
Goldman Sachs is comparing a Consumer debt crisis to recessions caused by overproduction, an oil embargo, and extremely high interest rates engineered by the Fed to reduce inflation. It’s like comparing apples and oranges. There is no logic or reason in this comparison.
But interestingly enough, the one recession caused by too much debt in 1930s, Goldman Sachs chose to exclude from its chart.
I’d say that this chart is nothing more than propaganda designed to manipulate investors into investing the way Goldman Sachs wants them to invest. This is how Goldman Sachs makes its money. They can predict which way the market will go because they are good at persuading investors to drive the market in the direction they predict. Whether that makes sense for the investors in the long run or not.
Too many investors are too gullible. And that’s why Goldman Sachs is so profitable.
right on, nick, you beat me to it.
I see that the 1929 scenario is conveniently excluded. Yet most agree that today’s crisis is a generational one. If you think that the current crisis resembles the oil crisis of the 70s or the tech crisis of ’00s then GS is correct. However, take a look at this nice chart of where we are in comparison to the 1929 crash and I think no further commentary will be necessary:
http://dshort.com/charts/bears/road-to-recovery-large.gif
The similarities to the 1929 crash are scary.
Nick – ditto -
What makes them (us) think that the technicals are going to be the same this time , the fundamentals certainly are not – close to the 1920′s and 1930′s – All shills especially GOLDMAN rats have an ulterior motive . Isn’t this a trading rule ? It should be .
BTW, a careful examination of the chart reveals the following:
. The data (as Paul already observed) is as of July 17. We have already moved substantially higher (much closer to the year end’s target vicinity).
. The scale of the chart (see left hand side) appears to assign a value of 100 for the March low.
. The year end high shown on the GS chart approximates a value in the 150-160 range.
. Since we already know that the market has moved up 50% from its March ’09 low, one could make an argument that the vicinity of the GS target has already been achieved. If not, then perhaps another 10% remains until the end of the year.
However, the most convincing argument against the GS thesis is that the market (so far) has not been following any of the shallow recessions (70s, 00s) chosen by GS as the guide for future performance. Rather, the market (so far) has been following the 1929 scenario almost to the T (see my previous post and graph).
Great comments everyone.
this is a hilarious chart
totally meaningless
pop, stall, rally
give me a break, i can make any chart show anything i want by selectively picking and choosing data
how about comparing it to the 29 crash, or the japan mkt or the internet bubble
look at it this way
is the credit crisis over?
I think charts are interesting in that they represent the best record we have of past human behavior. Economic conditions can be different but humans haven’t evolved enough in 100 years to separate themselves from their hardwired behavioral responses to stimulus. Right now it seems impossible for the markets to go down just like in March it seemed impossible that they would go up.
Very astute observers everyone! The chart Goldman put up seems so convincing at first glance. This is how they draw in the herd to support a rally long in the tooth. Let’s see if GS really believes in their own charts or this is some desperate attempts to prop.