Global Meltdown is Over. Now is time to make Money.

Originally posted by rattan1
The Market is above 8000 points now and according to some of you here we should see a massive sell-off in a few days as we reach 8300-8500. That sell-off is suppose to cause the great collapse that many of you are hoping. So is it going to happen? lets see.......

I don't think anyone here relishes the fact the the bulk of the US economy has not "turned the corner". We don't wish ill on anyone.

Facts are manufacturing is still down, unemployment is up with no real relief in sight, the commercial real estate market still hasn't hit their bottom yet.

We as a country don't produce much of anything other than debt, which is hardly a sustainable thing anymore. Sure banks stocks are looking good after nearly killing themselves and being massively rescued by the Government and the Fed. It would have been hard for them to look worse than they did given the amount of money that was shoveled down their throats. I bet if my uncle gave me $150,000 and told me not to worry about my "toxic debts" that my balance sheet would miraculously look splendid all of a sudden.

The era of loose credit is over and the economy as a whole will have to adjust to that fact. It hasn't for the most part, thus my hesitance to jump on the Bull market bandwagon. People seem to think they are going to be able to go back to living the they way they did overextending themselves, that just isn't going to happen anymore.

Things are bottoming out, but unfortunely, we haven't hit the very bottom yet IMO. There is more pain ahead before we get better.

Yeah I know......Doom and Gloom.

the best hope for the financial sector is that THE FULL COURT PERCEPTION press by all members of the MSM has enough effect to get private money back into financials.........Someone must have convinced Roubini that unless we right the boat right now (and talk it up sir) then we are going over the falls (psychology wise for the investor and the economy)....

This will be a very FUN spring summer and fall to watch.....

look to see how close the DJIA/ S^P 500 get to their 200 day Moving averages and to see if the s and p can break 943

I would be the first to admit i was wrong should the full court perception press built on NOTHING actually create enough optomism to be SELF FULLFILLNG .......(and last into 2010)

Now is not the time to short the market IMO .......financials will post better gains.....and the MSM full court press will begin ...........lending will NOT INCREASE (because the banks are not the dumb money...those thinking this is a real recovery are the dumb money).........Unemployment will not stop falling like a rock........and either will house prices..........so eventually

when non -financial income statement's take a blood bath .....the duped investors may finally realize that the financial turn around was nuttin but a rally based on the gov't skull F(C(*NG those that they can fool all the time

will this occur at the end of APRIL (1'st Q) or maybe later in the summer (2Q) ? i dunno ....i would hope poor nonfinancial earnings are baked into the cake regarding stocks for Q1 (but a good correction from what should be a 35% s and p rally will be over due....i think the market could rally thru early may then correct 5-8% down from overbought conditions and then sort of find a trading range near 8300-9300 for a time....and then decline a bit steadier in the AUG to OCT timeframe...after that as Q2 earnings (late AUG) and Q3 earnings forecasts will be dreadful....and more investors should see the writing on the wall... (that this is a D-pression not a R....and stock may not be bouncing back for years......but hey who knows.....

i would watch bond prices and there support levels to see if we could have some sloshing around of money from bonds to stock in the next few weeks sending bond speculators back into equity's for a time....(should gov't interest rates rise on lot's of debt issuance comin down the pike.



[edit on 6-4-2009 by cpdaman]

Rattan give this a look (hell this would make a good thread but i think most people should read this article along with the quiet coup by simon johnson) I HOPE (not that the market crashes ..jerk ....lol ) but that this does not fall on DEAF or willingly ignorant ears

www.itulip.com...

In a recession, a recovery in personal consumption, incomes, and retail sales signals the start of recovery. The virtuous cycle of credit growth--and its corollary, debt growth—combine with rising incomes as the rate of unemployment growth slows. Credit expansion leads the economy out of the cycle, followed by incomes. That is what many stock market participants think they are seeing now, as previous experience has trained them to see. But they are wrong

Joes six pack; why

In an economy where household expenditure accounts for 71% of GDP as in the U.S. in 2008, if household cash flows from wage income declines, retail spending falls. Government through interest rate cuts and tax cuts stimulates the economy by increasing credit cash flows. This approached effectively to end every recession in the U.S. since the end of WWII. Keep in mind that each recession was created by monetary policy, by the tightening of credit in order to reduce inflation expectations, real or imagined.

so considering this "decline" wasn't initiated by the gov't trying to reduce inflation expection's and purposefully choking off credit.....the indicators people are trained to look for......(well lets see)

joe six pack ; hurry up and explain idol is coming on soon

Think of a consumer-dependent economy as a waterwheel, with household cash flow from wages and credit driving the wheel, and the wheel driving the creation of new jobs, income, and credit, pumping money into the economy. If either the credit flows or the income flows dry up, the wheel slows. If they both dry up, one after the other, the wheel slows a lot. In a recession, the government tries to get the wheel moving again by making up for private credit flows and private income flows with government credit and government jobs.

J six pack; keep talking i'm barely paying attention

A depression, on the other hand, happens when debt levels are so high that there is not enough cash flow from incomes or new credit creation in the economy to service the interest on the debt. The result is debt deflation and economic depression. Debt deflation started in 2006 for households when the price of their homes began to fall.

J6p gee is that what we have?

A depression, unlike a recession, is not induced by government raising interest rates to combat inflation. On the contrary, a depression occurs in spite of all efforts by government to expand credit; interest rates are cut to zero yet the debt deflation goes on

joe six pack: ehh that is not good right?

Debt deflation cannot be stopped by government credit expansion because that effort only increases debt levels that are already excessive as a result of decades of previous interventions to re-start the already over-indebted economy. As the economy shrinks, there is even less income available to repay debt, and a vicious cycle sets in. The wheel not only stops, it begins to run backwards and pumps money out of the economy.

Joe six pack: uh ohh

Debt deflation at first withdraws household purchasing power from credit. Later households experience a decline purchasing power from loss of wage income as layoffs increase and savings are consumed in debt repayment. Government, by pouring vast sums of government money into the economy in an attempt to restart the virtuous credit cycle can produce a small “bounce” in the decline in aggregate demand that shows up as consumer spending, but cannot restart the wheel as it can during a recession. Debt levels continue to fall, and soon consumer expenditures as well.

Joe six pack; sound like gobblygook but still does not sound good

nice chart with the link showing these indicators ....do a small bounce

Stock market participants are trained by previous recessions since WWII to expect a recovery after consumption expenditures turn around in response to fiscal and monetary stimulus. They are not wired to comprehend the wholly different dynamics of a debt deflation

Joe six pack ; snoring........ who will wake up turn on TV and here more perception management from MSM.....subtly nudging him back to " the economy is fine" land before he has to deal w/ "doom and gloomer's " like me who are persistent

This rally does not reflect an improvement in the underlying economy but the response of market participants to short term government policy in the context of a widespread misperception of the current depression as a recession

on a side note a nice spring cold front just came thru S.FL and i will be spending tuesday afternoon surfing .....everyone have a good nite and try to stay open minded and positive in life...and maybe concentrate on growing the relationships you have in your life (wife /siblings/friends instead of pinning your happiness on a stk mkt recovery....times will be tuff in the economic arena but i gotta tell you ....these times are great opportunity's to try and step away from material things (if you can still pay your bills) and take a closer look at bettering yourself and or relationships......and if you can't currently pay your bills....believe me i am not hoping for the economy to collapse i maybe hoping for globilization to collapse...along w/ the associated offshoring of our jobs (and the rebuilding of american manufacturing)............look at the job sectors that are growing (like care for the Elderly ..esp down here in S. FL).....and why not positon yourself to help other's and make a decent living by looking into this.....wether or not it is your long term career ambition...it could make for a nice short term detour.....for others a move may not be so easy....i would...ask for wisdom to help learn to put your self aggresively into a situation where you can find work i would ask myself to find a way to do this everynite ....and then as you do....look for better work....where there is a will their is almost always away....finding a way to do what ever it takes to be upbeat and hopeful ( and forgive yourself ) in this department should not be negotiable in life (because when the chips are down ....only those that say "hell no" i'm not going out like this....find a way... and ..survive..even excel.. . IMO.....good luck to everyone ......sorry for going off on tangent



[edit on 6-4-2009 by cpdaman]

[edit on 6-4-2009 by cpdaman]

[edit on 6-4-2009 by cpdaman]

Originally posted by cpdaman

Originally posted by disgustedbyhumanity
reply to post by cpdaman

 

The mistake you are making is not realizing just how oversold the markets have become. Most major averages are still down 40% from their highs. Earnings are down no where near that number. Throw out the banks and we are talking 10% down on average. things would have to get much worse in order to even justify current prices. The PTB are determined not to let things get that bad. Thus stock prices move up. Even bad news, that is not as bad as some thought it would be, will have the effect of moving stocks upward. That is just how it works and fighting it is a losing battle.

From April 1932 to April 1933 the markets rose 133% in the face of unemployment which continued to grow to 25%. Why? Because the goverment started throwing money at the problem just as they are doing now.

quite simply you are missing a big piece of the puzzle....now follow me

you are assuming that the high stock prices from the last several years were legit.....THEY WERE due to HIGH LEVERAGE...that is being unwound from the system......

.this leveraged allowed asset prices to rise.......and revenue's to rise ...........without the leverage the market is going to correct to a much lower level and COMBINED with rising unemployment AND less consumer spending you have another reason why the stock prices would go even lower.......

stop letting your emotions that wish the market would go up cloud your beliefs about where/why the market is going .......i would love for the U.S to get serious about job creation....jobs that actually produce stuff......and then watch income's raise and consumption follow and then stock prices.......but it isn't happening......at least until the gov't gets tough on the financial oligarchs

and yes the DJIA was oversold based on technical indicators several weaks ago but after the banks report better earnings (thanks to MSM illusion) the stocks will reach VERY VERY overbought conditons per MACD and RSI indicators) and the shorts will go on parade (watch for the uptick rule to be re-instated) as the OBAMA administration is very intent on selling this bear mkt rally as a turning point but the market will not be built upon sand again for long.

[edit on 4-4-2009 by cpdaman]

Actually I think stocks were slightly undervalued at the top. I think the majority of companies actually understate their earnings due to poor accounting regulations, in effect that have to expense a boatload of non-cash transactions to get to their earnings. . Take a look at the current cash flows of the S&P 500 for example. Current estimates for the next year have it at about 10-12 times earnings. This equates to a 8-10% earnings yield. How much money would you pay to get a dollar per year? Right now in the market you have to pay $10-$12. However if you instead want to buy treasuries you must invest $33. Corporate bonds about $18. Gold? You don't get any earnings from gold so that can't be computed. Any way you slice it on a business point of view the market is extremely cheap. Even the dividend yield of the market is pretty comparable to 10 year treasury yields plus over time you are likely to get upside to your principal.

[edit on 8-4-2009 by Donny 4 million]

reply to post by rattan1


Keep up the good work rattan.
I knickname you Ran tan tan after Rin Tin Tin the wonder dog!!!
I took down a couple g's in the last few days all bull no puts.
Don't let the wet blanket crowd get to you. They are the boys looking for work.
I think they were over at aig doing thier risk managment last year.

reply to post by Donny 4 million


Rattan1 I only wish I had listened to you early march when you posted this thread, I would have made bucket loads of money trading stock. Many now are saying we did hit the bottom early march and you made the right call.

The rate of economic decline has slowed down showing sign that the economy will star recovering.

Keep up the good work and don't listen to those ignoramus who wishes that everything collapse. As Donny 4 million has said they are the guys who has lost their jobs and wish the same for everybody else.

Originally posted by Appollion

The rate of economic decline has slowed down showing sign that the economy will star recovering.

Hmmm so the rate of decline has slowed, but it's still declining, yet that is a sign that the economy is recovering. You do realize that hundreds of Billions of Dollars were pumped into the financial system and all it managed to do was "slow the decline". I would have expected such an influx of money to have some impact. We have basically thrown everything but the kitchen sink and still it hasn't turned things around enough to sustain. We can't spend and borrow ourselves out of this one. What is the Treasury and Feds backup of plan if this doesn't work, have interests rates go negative? There is nothing to pull out of the hat, this had better work.

That's ok , I'll keep my money on the sidelines and make only a little bit. I didn't lose 30-50% of my holdings in the market this past year. I will wait for clear signs the economy has turned. You can time the market.

Originally posted by pavil

Originally posted by Appollion

The rate of economic decline has slowed down showing sign that the economy will star recovering.

Hmmm so the rate of decline has slowed, but it's still declining, yet that is a sign that the economy is recovering.

You are an expert in deforming other people's quote. I said "sign that the economy will star recovering". WILL ≠ IS.

Please wear your glasses and send me your address via u2u as chances are that i live close to you so that I can send my 6 year old nephew to teach you proper English





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[edit on 8-4-2009 by Appollion]

I have been on ATS for a while but just registered as a member. I have to say that it is very hard to find optimism on ATS with all the Doom and Gloom and then I saw your thread Rattan1.

I registered specially to say THANK YOU rattan1. By following your advice I made myself a little fortune.

I recently lost my job and when I saw your thread I was a bit angry at first, but something inside me was telling me that you may be right and I took the plunge, I transferred money from my credit card and borrowed some from family to invest in stocks. Well now I am glad I listened to you. I sold most of my stocks last night which I bought early march and made some very good cash. I have paid my credit card debt, family debt and got enough cash leftover for me to hold on for three years without work.

Thanks a Lot Rattan1 and keep it up.

If you borrow $100,000 and throw it into the stock market and triple it, you have a $200,000 profit.
You pay back the $100,000 plus interest. Good.
You still owe Federal tax, and State tax if your state requires, on the short term capital gain of $200,000.
Please be very careful with the $200,000 so can pay this tax liability.
You DO NOT want to be the guy that didn't pay.

Originally posted by Appollion
You are an expert in deforming other people's quote. I said



"sign that the economy will star


recovering". WILL ≠ IS.

Please wear your glasses and send me your address via u2u as chances are that i live close to you so that I can send my 6 year old nephew to teach you proper English

Thanks for the insult, it means a lot coming from you. I quoted you exactly from your post, which I might add, contained spelling errors, so you might want to have your nephew check them in the future before you send him over here.

Anyhow, my point was that after throwing hundreds of Billions of dollars at the banks, I would hope it would have slowed the decline.

So Wells Fargo is posting a 3 Billion dollar profit. They received over 25 BILLION in TARP money. To me, I think it would be pretty easy to show a profit given that scenario. 40% of that profit was from Wachovia, which Wells Fargo bought at fire-sale prices with the TARP money. How does such a critically ill business like Wachovia turn a 1.2 Billion profit the next quarter?


The big fish just got bigger by swallowing a smaller fish. We the taxpayers, paid for Wells Fargo to buy Wachovia, which is a pretty sweet deal if you are Wells Fargo. You can be glad about that. Myself, I am disgusted that that was allowed to happen. Sure you can say, it wasn't directly TARP money that allowed Wells Fargo to buy Wachovia for 15 Billion, but without the TARP aid, that purchase does not happen.

There are at least two separate issues being discussed here:

1. Making boatloads of money in the stock market.

2. The state of the larger economy.

The stock market is not the economy. There is actually virtually no correlation between the two, according to most studies. Thus, it's entirely possible for the stock market to rally while the economy continues to deteriorate.

That, my friends, is what is going on at the current moment. No credible Economist thinks that the economy has bottomed-out or is "showing signs of recovery." That's CNBC BS for people who are only looking at the equity market.

The most optimistic of the upper-echelon economists feel that there are still several shoes that have yet to drop, some domestic, some foreign. The indicators that best correlate with economic recovery are still declining as fast as ever.

But that doesn't mean that you can't make money in the stock market.

Always remember and never forget: the stock market is not the economy.

[edit on 9-4-2009 by theWCH]

reply to post by pavil


Ever consider that Wachovia wasn't as ill as some believe. They were getting a run on the bank and that is why they sold out to WFC. Wachovia always insisted they were ok.

Banks have 1.2 trillion paid off annually. Right now they are sitting on about 13% cash and it keeps growing as people deposit rather than spend. Banks are getting funds at near zero and lending them at 5-6% or higher. Banks are much healthier than anyone wants to believe. The day will come when they are able to pay off all the TARP loans and i wouldn't want to be short the markets or long gold/commodities when that happens.

reply to post by disgustedbyhumanity


I entirely believe Wachovia wasn't in such bad shape that it couldn't have survived, albeit with some Government help. I agree with much of your post.

I also agree with the poster that the Stock market and the economy are not the same thing.

[edit on 9-4-2009 by pavil]

From the start I've been saying that there will be more good news to show that we have turned around and economic recovery is on the way.....We hit the bottom early March when I called for everyone to jump back in the market and make yourself some good profit.

To all those who still don't believe:

Goldman reports $1.8 billion profit

NEW YORK (Fortune) -- Goldman Sachs reported a much stronger-than-expected first-quarter profit Monday, bouncing back from its worst quarter as a public company. Goldman (GS, Fortune 500) also set plans to raise $5 billion through a sale of stock, saying it wants to become the first big bank to repay the federal loans extended during last fall's financial sector meltdown. In reporting its results a day earlier than expected, New York-based Goldman said it earned $1.81 billion, or $3.39 a share, for the quarter ended March 31. Analysts surveyed by Thomson Financial were looking for a profit of $1.64 a share.

Great news for earnings. Looking good.

But the addition of 30-40 million more shares? That dilution can't be good for the stock's price...

reply to post by rattan1


What you fail (and the article too) to realize is that GS changed their accounting year. So all losses from Dec 08 are not reflected in any annual accounting. those losses were $1.03 Billion

Do the math and that leaves GS at $0.78 Billion in profits WAY BELOW expectations.

And while they are working to raise the $$ to pay back the TARP, they STILL owe BUFFET $5 Billion.

the math doesn't lie and when you put it all through the calculator - GS is running on a loss

Is the OP an agent of the NWO? lol

reply to post by redhatty


The math is absolutely correct as we are looking at a particular Quarter. This is not an Annual account but a Quarterly performance account.

The losses that you are talking about are mainly due to revaluation losses and do not represent actual cash movements. They are just Accounting Book entries that will be wiped out once the assets are revalued up again.