Is the stock market going to tank?

You guys really don't get it. Gerbils in a wheel, all of you.

benny the mush. way to bring on the correction ;)

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Originally Posted by Benny Profane

I've just had a revelation. I've been wondering where to go in '10 after hiding in safety for all of '09,

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You missed about a 40% increase, then.

Now, you get in... I get out. :D

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Originally Posted by mtnwriter

benny the mush. way to bring on the correction ;)

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when the pizza delivery guy is giving you stock advice its time to get out......

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Originally Posted by Benny Profane

I've just had a revelation. I've been wondering where to go in '10 after hiding in safety for all of '09...and, of all things, I realize that the best choice is a Vanguard target retirement fund, which is comprised of stock and bond index funds, very low cost. You literally can't beat it...So, that's it. It's such a load off my back. Have fun, and good luck. I'll be back to rant about the sins of Wall Street, but I have seen the light. Adios.

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That's brilliant! Aren't you glad you figured out how to win the game?

waitaminute...

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Originally Posted by Kevo

vangaurd.com

Target retirement fund. Already pre-diversified depending on how soon you want to retire.

Done.

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Originally Posted by Benny Profane

Check the performance of those things in the past few years. So much for contemporary financial advice. I pity those who targeted 2010.

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[ame="http://www.tetongravity.com/forums/showthread.php?p=2504905"]So you have $1,000,000.... - Page 2 - Teton Gravity Research Forums[/ame]

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Originally Posted by BigDaddy

You missed about a 40% increase, then.

Now, you get in... I get out. :D

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40%? i think you mean 75%. VTI (vanguard total stock market index etf) 52 week range is $33.26 - $58.35.

There's short term support around 1080-1050 SP00 with 50 point increments down to 850. There's not much long term support above 750 in the SP. I suspected a first quarter pullback so seasonally it sets up well for long term investors.

A meltdown in commodities will be also good for equity longer term.

No opinion on gold except it was a good short on the last rally to 1140.

WASHINGTON – The government's response to the financial meltdown has made it more likely the United States will face a deeper crisis in the future, an independent watchdog at the Treasury Department warned.

The problems that led to the last crisis have not yet been addressed, and in some cases have grown worse, says Neil Barofsky, the special inspector general for the trouble asset relief program, or TARP. The quarterly report to Congress was released Sunday.

"Even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car," Barofsky wrote.

Since Congress passed $700 billion financial bailout, the remaining institutions considered "too big to fail" have grown larger and failed to restrain the lavish pay for their executives, Barofsky wrote. He said the banks still have an incentive to take on risk because they know the government will save them rather than bring down the financial system.

continued...

http://news.yahoo.com/s/ap/20100131/...ilout_watchdog

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Originally Posted by Benny Profane

Conspiracy theorists - check this out:



Marketwatch
Jan. 5, 2010, 5:47 p.m. EST
TrimTabs suggests government manipulated stocks
Analysts say government's financial rescues have fueled conspiracy theories

By Nick Godt, MarketWatch
NEW YORK (MarketWatch) -- The unusual circumstances that led the U.S. market to rally powerfully in 2009 might be explained by secret government moves to buy stocks, according to Charles Biderman, the founder and chief executive of TrimTabs, a research firm that tracks liquidity flows in the market.

"We cannot identify the source of the new money that pushed stock prices up so far so fast," Biderman said in a statement Tuesday.


The source of approximately $600 billion net new cash necessary to lift the market's overall capitalization by $6 trillion last year could not be identified by TrimTabs, Biderman said. The money, he said, didn't come from traditional players such as companies, retail investors, foreign investors, hedge funds or pension funds.

"We know that the U.S. government has spent hundreds of billions of dollars to support the auto industry, the housing market, and the banks and brokers. Why not support the stock market as well?"

The Federal Reserve or the Treasury, Biderman said, could have easily manipulated the stock market by purchasing $60 to $70 billion worth of futures of the S&P 500 Index (INDEX:SPX) on a monthly basis.

Conspiracy theories on the rise?

Market analysts, however, were quick to debunk the theory. Yes, the government had a heavy hand in rescuing the financial system and the economy as the system started collapsing in late 2008 and throughout 2009. But the huge boosts of liquidity through the system found their way to stocks by the usual means, they said.

"The idea that this is magic is nonsense," said Barry Ritholtz, market strategist at Fusion IQ and a market veteran. "This was a normal behavior in a recessionary bear market. We saw the Dow plunge 5,000 points in 6 months, which had never happened before and created a dramatically oversold market."

Yes, the Federal Reserve slashed interest rates to near zero and Congress allowed banks to keep their bad loans off their books, allowing them to pretend they were solvent, he said.

But "you can't short stocks when the Fed is at zero," Ritholtz said. "Our own institutional clients came on board" as did other big institutional investors, he said.

Conspiracy theories about the so-called "plunge protection team," or PPT, have been on the rise ever since the U.S. government started to bail out financial institutions in late 2008 under the administration of then-President George W. Bush, according to Dan Greenhaus, market strategist at Miller Tabak.

The PPT is a nickname given by some to a group established by President Ronald Reagan in 1988 after the 1987 stock crash to coordinate governmental response to market meltdowns.

Noting that the Fed has been buying Treasurys and mortgage-backed securities to keep interest rates low and support the economy, even firms such as Sprott Asset Management have started to accuse the U.S. government of running a Ponzi scheme.

"There's a lot of backlash against the government right now and the hate for the Fed has gone into overdrive" in some corners, Greenhaus said. "The fact that the government stepped into the abyss [angered] a lot of people, and the fact that things are better a year later flies in the face of some long-held beliefs about free markets."

As to the scale and power of the 2009 rally, it actually trailed previous recoveries from bear markets, according to research from Miller Tabak.

"While the absolute percentage gain off the recent lows has been more powerful than anything since the Depression era, there is no denying that historical rallies in the equity market have recouped a greater percentage of the declines from the highs," Greenhaus wrote in a note.

The stock market, as measured by the S&P 500, plunged nearly 57% from its 2007 highs until it reached lows in March of 2009.

But even after rallying 58% in the seven months after the March lows, the market remained 31.5% off of its 2007 highs. That's nearly the same amount recovered during the market rally of 2003, as the market began to recover from the bursting of the tech bubble.

In other instances, such as 1975, 1962 and 1938, the market had actually recovered a much bigger portion of its losses seven months after hitting lows. And in 1983, it was actually 7.3% above its previous highs.

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Does anyone have some thoughts on this? I bring it up again because I heard a very sensible fund manager put forth this same argument on CNBC today, and on Maria Bartiroma's......
http://www.dealbreaker.com/images/en...iromo_cnbc.jpg
show, of all places. (Hubba hubba, baby. Pump and dump me, please)

.......which is basically propoganda hour for people schilling stupid deals.
This person (forgot his name) wasn't a wild eyed one, but, basically was wondering, "Who is buying stocks?" It's not companies, who usually jump in at this point, and the retail investor (you and me) is still in bond funds and cash. So, the implication was that the Fed is buying the market to, well, pump and, I guess, dump when fools rush in.

Is it even possible?

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Originally Posted by Benny Profane

Is it even possible?

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Money is just numbers in computers they control. Anything is possible.

you guys need to loosen the foil hats. the govt. is manipulating the markets but its right in front of your faces - via ZIRP. barry ritholz, who's a smart guy and conspiracist watcher himself explained it succinctly:

"The idea that this is magic is nonsense," said Barry Ritholtz, market strategist at Fusion IQ and a market veteran. "This was a normal behavior in a recessionary bear market. We saw the Dow plunge 5,000 points in 6 months, which had never happened before and created a dramatically oversold market."

Yes, the Federal Reserve slashed interest rates to near zero and Congress allowed banks to keep their bad loans off their books, allowing them to pretend they were solvent, he said.

But "you can't short stocks when the Fed is at zero," Ritholtz said. "Our own institutional clients came on board" as did other big institutional investors, he said.

in fact, that whole article you copied & pasted has several reasonable explanations. there have been mkt. rumors about excessively large SP futures & options contracts which have tended to be bullish. there was a huge lot of VIX contract trades done near the end of the year that was very bullish on the VIX being in the 20's - which assumes low volatility and usually higher markets. whoever booked it made a good bet, but i'd guess GS before USA.

How did the government manipulate the stock market aside from the FOMC operations and the allowances to banks about loans? I dont see how that will boost the stock price of some mid cap steel maker any more than improved fundamentals with respect to receiving financing.

January 14th, 2010

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Originally Posted by Benny Profane

I've just had a revelation. I've been wondering where to go in '10 after hiding in safety for all of '09, so I grab a great book by John Bogle, "Common Sense on Mutual Funds", updated edition to the end of '09, Amazon.com: Common Sense on Mutual Funds: Fully Updated 10th Anniversary Edition (9780470138137): John C. Bogle, David F. Swensen: Books and, of all things, I realize that the best choice is a Vanguard target retirement fund, which is comprised of stock and bond index funds, very low cost. You literally can't beat it. He argues over and over again that a low cost index fund always beats managed funds and trading over the long run, with tons of historical data. He's a wise old man, and, I'm afraid, when he and Volcker and Buffet pass away, which will be soon, the world will be a much less civil place, and much dumber.

So, that's it. It's such a load off my back. Have fun, and good luck. I'll be back to rant about the sins of Wall Street, but I have seen the light. Adios.

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Originally Posted by ICEHOCEY77

Now watch the market bomb.

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it's like rain on your wedding day

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Originally Posted by Brock Landers

How did the government manipulate the stock market aside from the FOMC operations and the allowances to banks about loans? I dont see how that will boost the stock price of some mid cap steel maker any more than improved fundamentals with respect to receiving financing.

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During the 87 crash and the LTCM meltdown The Fed was widely rumored to be buyng stock index futures to offset index arbitrage losses. Index buying would cause a midcap steel company to rise as baskets of stock are bought to offset the discount.

yeah, brock, do you mean directly - as the conspiracists speculate or indirectly?

4matic has it, and the whole PPT thing above from benny is pretty well established as a "theory"...in that the govt. will actually step in to the futures mkts. and buy S&P, Dow & NASD future contracts.

indirectly, ZIRP pretty much sends all money looking for yield in a zero interest rate environment - out of bonds and into stocks, commodities, etc. it also makes borrowing money free, so banks & hedge funds can perform easy low risk carry trades.

I meant aside from indirectly (rates/FOMC)...is the government buying stocks of companies not names AIG or C

the whole 'indirectly' thing is exactly what the govt is there for, as far as the Fed. Youd be foolish to not expect the governemtn to intervene in those situations where it has to. And if you dont agree with what the government does...theyre doing it anyway so deal with it (invest appropriately)

It never fucking fails. Ask a simple question, like, who the fuck is buying stocks these days, and you get slapped with acronyms and tech talk about futures and contracts. You guys really don't know, do you?

BTW, Kudlow just told me today's dip is Obama's fault. My palm has hit my forehead.

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Originally Posted by Benny Profane

It never fucking fails. Ask a simple question, like, who the fuck is buying stocks these days, and you get slapped with acronyms and tech talk about futures and contracts. You guys really don't know, do you?

BTW, Kudlow just told me today's dip is Obama's fault. My palm has hit my forehead.

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Buying index contracts is an easier and more discreet way to buy stocks and it amounts to the same thing.

Wasnt really technical

Who is buying stocks: investment managers are buying stocks. Over the 2nd, 3rd, and somewhat the 4th quarter low quality stocks- those which got hammered the most in 2008- came back. People were buying risk. Emerging Markets. Growth stocks. Cyclical stocks, to a degree. EAFE...sorry...Europe Australasia Far East.

People saw that companies which were still in business at that point may be priced at such valuations that it was a good investment. Sure, the sky could fall, but you wouldnt be paying very much, and theres tremendous upside. Now value stocks- those stable companies with relatively level cash flows- are probably going to surge a bit more, especially in a tough economy.

Even the S&P was up 6% in 4Q. It seemed like it didnt do much, but 6% is a mediocre year nevermind quarter. There are still bargains out there- not like in March or May but if you can find a company with good, solid management that can adapt to the changing and tough economy, you can have it at a good price. And the people finding these companies are buying stocks.

Heard an interesting thought today from a management team- the concept of a bubble in the bond market.

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Originally Posted by Benny Profane

It never fucking fails. Ask a simple question, like, who the fuck is buying stocks these days, and you get slapped with acronyms and tech talk about futures and contracts. You guys really don't know, do you?

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benny,

i seriously have to question whether you read...even the things you yourself copy and paste. i'm going to re-quote what i responded and explain:

"The idea that this is magic is nonsense," said Barry Ritholtz, market strategist at Fusion IQ and a market veteran. "This was a normal behavior in a recessionary bear market. We saw the Dow plunge 5,000 points in 6 months, which had never happened before and created a dramatically oversold market."
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translation: ritholtz views the buying as a once in a generation opportunity. sellers oversold when it appeared the world was coming to an end. when the world did not end, buyers rushed in for value across many asset classes. this happened in stocks, high yield bonds, CDS, etc., etc. that got pounded in the liquidation.
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But "you can't short stocks when the Fed is at zero," Ritholtz said. "Our own institutional clients came on board" as did other big institutional investors, he said.
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ritholtz is clearly saying institutional clients and big institutional investors came in to buy the equity markets. i will add, it was done in stages as the TARP was enacted, banks were reliquified, mark-to-market rules were relaxed, etc.
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one note of caution, perhaps this is at the heart of your question: the markets are being traded by a far greater number of participants than they are being invested. there are very few long term investors. institutions and traders will move markets however policies and prevailing business climates seem at any moment in time, and it will change faster than people change their status on facebook.

as far as acronyms & tech talk, here are some definitions if i missed the mark on round one:

VIX = volatility index (contract) wiki it
GS = Goldman Sachs (thought you knew that one)
ZIRP = Zero Interest Rate Policy

larry kudlow is a dyed in the wool reagan republican, he worked as an economist for his admin. of course he will tell you and anyone who listens conservative policies are the only ones that can save the US. what he won't admit to is that several same policies nearly blew it up. the guy is a muppet.

So, you guys confirm my suspicions that it's a casino. Blankfein didn't make 100 mil by folding his cards and passing. And, well, it helped that his dudes were the dealers.

Bonds aren't bubbled, but bond funds are.

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Originally Posted by mtnwriter

benny,

i seriously have to question whether you read...even the things you yourself copy and paste. i'm going to re-quote what i responded and explain:

"The idea that this is magic is nonsense," said Barry Ritholtz, market strategist at Fusion IQ and a market veteran. "This was a normal behavior in a recessionary bear market. We saw the Dow plunge 5,000 points in 6 months, which had never happened before and created a dramatically oversold market."
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translation: ritholtz views the buying as a once in a generation opportunity. sellers oversold when it appeared the world was coming to an end. when the world did not end, buyers rushed in for value across many asset classes. this happened in stocks, high yield bonds, CDS, etc., etc. that got pounded in the liquidation.
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I read a lot, amigo. And that is such a tired and silly reaction to what is one of the greatest credit crashes in history. I find it horribly parochial. As though what just happened is a normal cyclical downturn, and all one had to do is rush in and scoop up the bargains. I hear it a lot on CNBC from the salesman on both sides of the mike, you know, the reason we aren't seeing the other side of the V is because the socialists are fucking things up. Just eliminate all taxes and regulation, let everyone crawl to a hospital and kick them in the face if they don't have money, and we'll all be living the good life soon. Markets are without sin. Well, lets just see what happens in '10 when the Fed stops supporting the housing market and they let that be a real market and Greece goes belly up with Spain right behind and the Euros let them be a real market, and the charade of mark to fantasy market comes home to roost. It ain't over until it's over, and this one has a long way to go.

i would liken it to a casino in that the odds are against anyone that walks in ignoring the numbers & thinks they can drop down $100 and leave as a baller. the equity markets should be an absolutely do your homework long term value, pick your stocks oriented approach. if you can't or won't do that, then put your money with a good management team that's proven they can. bill gross on the bond side, bill miller on the equity side for mere mortals. if you had multi millions, hedge funds would be approaching you...daily.

benny, there are some serious gun slingers out there that were willing to bet their money, careers, mistresses, hamptons houses, everything on the deals that were to be had at the beginning of 2009. there are some people who will double, triple or go in 30x leverage and bet right. when valuations became so oversold, at some point, they were headed to zero or up.

i am not placing moral judgment on it either way. i am just noting that it happened and happens.

p.s. you would be better off shorting the markets if you truly have all this angst & worldview. at least you will be directionally right & early some of the time. you would have killed it in 2008.

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Originally Posted by mtnwriter

benny, there are some serious gun slingers out there that were willing to bet their money, careers, mistresses, hamptons houses, everything on the deals that were to be had at the beginning of 2009. there are some people who will double, triple or go in 30x leverage and bet right. when valuations became so oversold, at some point, they were headed to zero or up.

i am not placing moral judgment on it either way. i am just noting that it happened and happens.

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Hey, whatever, but DON'T COME FUCKING WHINING TO ME WHEN YOU ROLL THE DICE LIKE THAT AND FAIL and take my fucking tax money to pay your skanky mistress afterwards. We let these MFs play with leverage like that over the last decade, and the only guys who failed were Lehman and Bear, but hey, even they didn't fail, because all the top dudes, if they were smart and didn't spend all their cash, are sitting in a hot tub right now attached to a noice fuck pit on the side of some western ski mountain getting a blow job from said mistress. Do you really think Fuld is hurting these days? Sure, he had to sell the fifth and sixth home and maybe ten Warhols, but, trust me, he's fine. And, here we are, cleaning up his mess, and NOTHING HAS CHANGED! Really, all of that could happen tomorrow. Any new rules? No. Any new regs? No. ANYBODY IN JAIL? Fuck no.
They all say that if we put up walls again and regulate, then all the biz will go to Europe or wherever. Fucking blackmail. I say, fine, let that corrupt, immoral behavior take England or Hong Kong down in five or ten years. We've seen what it can do here, so why not deport it?

well, that doesn't stop with the banks. laws don't get passed for the "greater good" because washington is run by lobbyists and revolving door politician / lobbyists.

I think the perma bear has re-awoken from his cave. Three weeks and six hundred points on the dow later. You cash out that index fund yet?

Oh, by the way, we forgot to tell you that the entire year's employment numbers were a complete lie.

http://www.hussmanfunds.com/wmc/wmc100208.htm

"The January employment report Friday was interesting. A month ago, the December employment report indicated total non-farm employment of 130,910,000 jobs. Following revisions, the January employment report indicated total non-farm employment of 129,527,000 jobs, a net loss of nearly 1.4 million jobs - over and above what had previously been reported. Essentially, job creation was vastly overestimated during 2009. While these revisions were spread over the year, particularly March, the extent of the previous overestimation is notable given the large conclusions that market participants lend to monthly "surprises" of even 10,000-20,000 jobs."

Ahh...someone else that reads Hussman's doom and gloom. Thought I was a lone soul.

Ten percent correction in an uptrend. HEAVY volume this morning on the buy side. A move to 1100 on SP can be shorted with tight stops. Correction came at the right time seasonally so I remain positve that the market should be sideways at worst this year. No gloom and doom. Corporate earnings are pretty good.

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Originally Posted by 4matic

Ten percent correction in an uptrend. HEAVY volume this morning on the buy side. A move to 1100 on SP can be shorted with tight stops. Correction came at the right time seasonally so I remain positve that the market should be sideways at worst this year. No gloom and doom. Corporate earnings are pretty good.

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Side ways can be a profitable market condition for people that do their research. I was a buyer this morning so watch out, the sky will be falling.

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Originally Posted by 4matic

HEAVY volume this morning on the buy side.

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it was the bullshit news that the EU was going to back Greece's debt, followed almost an hour later by the german finance minister refuting the story. Eur/usd had a 150 pip swing in that time frame. Someone cleaned up.

Stocks are not accurately reflecting economic fundamentals. If one wishes to play the market, go short.

Matt Taibbi has another brillant article in Rolling Stone - "Wall Street's Bailout Hustle"

http://www.rollingstone.com/politics...t_hustle/print

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Originally Posted by ass-to-mouth

Matt Taibbi has another brillant article in Rolling Stone - "Wall Street's Bailout Hustle"

http://www.rollingstone.com/politics...t_hustle/print

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the drug analogies are a bit much but everyone should seriously read that article, start to finish.

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Originally Posted by ass-to-mouth

Matt Taibbi has another brillant article in Rolling Stone - "Wall Street's Bailout Hustle"

http://www.rollingstone.com/politics...t_hustle/print

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Ha. I was thinking about his first article the past few days when Goldman got connected to Greece. Vampire squid, indeed.

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Originally Posted by grapedrink

the drug analogies are a bit much but everyone should seriously read that article, start to finish.

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+1000

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Wow, that Rolling Stone article blew my mind. Once again I am just knocked out by the fact of how bad the US Tax Payer has been/will be fucked to prop up a few companies.
I love how in the 1980's during the S&L crisis, thousands of banks were allowed to fail and the fuckers running them often were convicted of fraud and sent to jail. Not this time though, as the crooks are now running the government too.

Here's a great article about the "sea of debt" we're in, how we got there, and how we might get out:
http://www.telegraph.co.uk/comment/p...a-of-debt.html

"...What is needed is a root and branch re-evaluation of that most curious of cultural inventions – money – how it is created, how it circulates within an economy and how it can best be used to serve the interests of the community itself.

To begin then, the experts owe it to the people to explain to them in the simplest terms how it is that money actually works."