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Most Popular on Reuters = Jim Rogers calls most big U.S. banks "bankrupt"

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December 12, 2008 – Comments (6) | RELATED TICKERS: FAZ , SKF , SRS

Top Three Articles on Reuters 12 Dec 08:

1. Jim Rogers calls most big U.S. banks "bankrupt"

2. Focus back on Washington in auto bailout saga

3. Bernard Madoff arrested over alleged $50 billion fraud

The market is holding up well despite of this news, not to mention the huge sell off in Asia and Europe.

So....?????

1. We have found A bottom? - Not "the bottom"....A bottom

2. Short covering before options expiration? - Yes, continued fear of legislative intervention on options expiration next week.

3. Plunge Protection Team behind the curtain...booo!

FYI - Bloomberg 12 DEC 08: Fed Refuses Bloomberg Request to Name Recipients of $2 Trillion in Lending

4. Investors are trading infinite fiat currencies for limited # of stock shares?

FYI - Jim Rogers on Bloomberg: In-Depth Look: Auto Rescue Fails 12 Dec 08

I am getting a little tired of JR, Roubini and Schiff on TV almost everyday. I have been reporting on them for 12+ months. I am still a Bear, but I am getting tired of everyone pilling on the story now.

FYI - It is a Bullish sign these BEARS on TV everyday.

THE BOTTOM 

Once Fast Money and Mad Money are canceled for lack of viewers, then we will be closer to the bottom.  Seriously, once these 2 shows have net 0% viewers we will be closer to the bottom. Currently, when the shows tours the US, the audience is full, enthusiastic and vibrent.  When these shows tour and the audience is a PAID infomercial audience clapping like idiots and going crazy over lousy advice or when a public audience becomes to violent and riotous towards the shows, we will be closer to a bottom. 

These shows will be replaced with TV shows How to make _______ from your home (or tent).  Or paid Government announcements on how good things really are...somewhere.

At some point, being a Stock market cheerleader or paid liar will become hazardous toward your health.  LEH CEO Fuld got off easy, IMO. I expect many of these people will be looking over their shoulders and living like hermits the rest of their lives. (Ref: Richard Fuld, the disgraced head of Lehman Brothers, was punched in the face in the office gym amid the bank's collapse.)

Although I think most Americans are optimists and are still holding out, I do think much of the sell off has taken place. Those piling on the Bear story, I think missed the biggest move. Stocks will likely continue to fall, but the quick and big money made from the sell off happened in Oct and Nov. I expect gradual deflation, with continued interventions by the corrupt FED and government.

The more the government intervenes the worse the "blowback" will be. I expect civil disturbances and possibly greater wars. My peer at work, who has a Masters Degree, understands 3 languages and spent years in Asia, expects some form of civil war to break out in the US. I am not that bearish. But civil war is the most bearish you can be.  On 13 Oct 08, Marc Faber has said on Bloomberg internationial "the US will go bankrupt, this I guarantee, sooner or later"

I hope Fools are smart enough to start savings money and cutting expenses. Also, I recommend some real assets outside of the nominal and paper economy.  Got food? How much?

6 Comments – Post Your Own

#1) On December 12, 2008 at 4:11 PM, kdakota630 (29.46) wrote:

As usual, good links, and liked the Jim Rogers clip.

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#2) On December 12, 2008 at 4:32 PM, anchak (99.83) wrote:

Good links...nice write-up.

And I agree on "A" bottom part. I think historically markets have managed to eek out a net rally breaching the 40 /50 MA and staying there for a while ( few weeks).

But I think that's it...then we vascillate/oscillate whatever is your pleasure..... based on the news/outlook. Depending on the recession and your outlook ....you sell/short at the MA breaches....or buy at the 850 level. Either could pay-off.

Some leading indicators I discussed with Cami(stocks) on his post were

(1) %Change in Unemployment
(2) % Change in Industrial Production

2 other volatile indicators are

(a) PMI Index
(b) Unemployment Claims.

If you know how to read those - sometimes you could have closely called it - however, its the stock market which has correctly and always in a leading sense called the end of a recession. But not always perfect, in the big bad bear of 70s....this is what happened , after a period of consolidation, it broke down again - and the same happened with the Industrial production  - depends on the depth.

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#3) On December 12, 2008 at 7:11 PM, Harold71 (22.70) wrote:

4. Investors are trading infinite fiat currencies for limited # of stock shares?

When oil and other commodities start to take off this thesis will have a lot more validity.  They should benefit more, and more immediately, from "infinite fiat."  I expect the Dow/gold ratio to continue falling...

I am becoming more bearish on the US dollar than the stock market at this point.  Yes the stock market has room to fall...the Dow can and I think will break 7500...this will be a key for finding a real bottom. But the USD buyers are not at all pricing in a Government default on the debt (how would that affect the stock market?)....and, ironically, pricing in a default will probably ensure it. 

Can anyone deny that the US government has severely damaged financial stability?  Are tax collections going to fall off a cliff?  Are deficits going to the moon?  Is seeing the headline "US Government Goes Bankrupt" going to be a good news day for stocks?

Basically this meltdown is one (bad) year in...but there is no end in sight.  No one can see the bottom...it is a pitch black hole.

 

Once Fast Money and Mad Money are canceled for lack of viewers, then we will be closer to the bottom. 

Hehe, I said the exact same thing on a MSN message board about this time last year..."Predictions for January 1, 2009" was the title...I actually predicted they would be cancelled by 1/1/09...I was early I guess...

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#4) On December 12, 2008 at 8:14 PM, nuf2bdangrus (< 20) wrote:

THe ultimate Ponzi scheme is the Treasury and Fed

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#5) On December 12, 2008 at 10:35 PM, lquadland10 (< 20) wrote:

As usual you are pretty much on the mark. I also heard on the grape vine Canada is gearing up for riots.

Hear about whats going on in Canada? Supposedly the Prime Minister basically dismissed the parliament for 6 weeks. People are reporting Canadian Troops are in the bigger cities. Not enough food yet but getting there.  Oh have you heard any rumblings on the silver thing yet? Thank as always. Lynda. 

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#6) On December 13, 2008 at 10:16 AM, kdakota630 (29.46) wrote:

The Prime Minster of Canada shut down parliament because a constitutional crisis, not because the country is bankrupt.  Essentially, we had an election in October, and the Conservatives won a minority government.  The opposition parties were going to join together to topple the Conservatives and form a minority government.  There are more details than that, but you get the gist of it.

As for troops in the larger cities, I haven't seen or heard anything about that, and living in one of the larger cities, you'd think I would've.

So basically, no worries, no riots, no food shortages.

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