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Hopefully That Much Needed Correction is Happening

Recs

8

February 25, 2013 – Comments (7) | RELATED TICKERS: FE , D

People will talk Italian elections of all things caused T to go down.  You will hear tons of other reasons but in the end hopefully this is nothing more than the much needed correction this market needed.  I kept calling for a 5-7% one so we shall see.  In the long run we still have Uncle Ben.

7 Comments – Post Your Own

#1) On February 25, 2013 at 5:59 PM, rofgile (99.31) wrote:

Awallejr:

 I think March is going to hurt in the markets.  The sequester is a big deal, and will be linked to a debt ceiling debate.  Based on how the markets were roiled at the first debt ceiling conflict I predict a similar big dip. 
 This is combined with the fact that the markets are fairly richly valued in the last month or two, leaving it in a vulnerable spot.  I sold my biggest holdings at the market open today, after thinking about doing so last week.

 I'll probably wait till after March or till valuations get cheaper again.  Long term, I think it is still a strong bull market.  We are just seeing the first return of the housing market this year with rising prices and a 'sellers' market in some places.  Rising home prices, stable employment, and recovering EU = a period of prosperity.  Falling commodity and bond prices would also help.

 -Rof 

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#2) On February 25, 2013 at 6:00 PM, rofgile (99.31) wrote:

BTW -

 The sequester is going to cause an 8% drop in NIH funding!  That is a big F'n deal.  Lots of other good programs are going to be nailed, and the public is fairly apathetic.

 -Rof 

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#3) On February 25, 2013 at 8:25 PM, Option1307 (29.68) wrote:

I for one sure hope so!

I agree that this is a much needed correction. Things have been a little bit frothy as of late. A decent correction is never a bad thing for the markets. 

I would like to see 7-8% before I start buyingbut we shall see how things play out!

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#4) On February 25, 2013 at 9:02 PM, awallejr (83.85) wrote:

Well this is why I have been staying in yield. I take these corrections as a chance to increase my yield holdings.  Personally I think the market is tired of the game Congress keeps playing and is ignoring them.  Take things to the brink then make deals.

In the end it is still about Bernanke.  He is not reigning in QE until there are real improvements in unemployment and that is still years away.  I heard this same nonsense by the so called experts back in 2009 that Bernanke would raise interest rates by 2010.

I was watching a Roubini clip and had to turn it off.  He is warning we are in for another major financial meltdown as a result of this QE.  Everyone worries how will Bernanke unwind eventually.  Except he is buying into self amortization paper.  They unwind themselves over time. 

Now if we see major inflation then perhaps he might need to withdraw sooner, but I've been hearing this threat of massive inflation for years and still don't see it even on the horizon.  Until we start seeing serious wage growth for the middle class I see deflation more of the threat.

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#5) On February 26, 2013 at 9:12 AM, ElCid16 (95.87) wrote:

The sequester is going to cause an 8% drop in NIH funding!

"The NIH invests over $30.9 billion annually in medical research for the American People." 

So we're talking about a ~$3B reduction in R&D from the NIH.  I think Pfizer's annual R&D flucutates about $1-2B on an annual basis, and that's just PFE.  GILD and AMGN, alone, will nearly make up that $3B drop in medical R&D within a few years.

http://www.nih.gov/about/budget.htm

 

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#6) On February 26, 2013 at 10:58 AM, Schmacko (56.73) wrote:

@ #4) "In the end it is still about Bernanke.  He is not reigning in QE until there are real improvements in unemployment and that is still years away."

Last I've read he plans on stepping down in Jan 2014 when his current term runs out.  Whoever replaces him might have different ideas about QE, raising interest rates, etc... 

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#7) On February 26, 2013 at 12:23 PM, awallejr (83.85) wrote:

Well then a re-evaluation would be made.  There are other doves he could be replaced by and odds are President Obama wouldn't pick a hawk.  But at the Senate hearing today he pretty much confirmed what I have been saying.

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