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dwot (99.48)

What's a bear to do?

Recs

5

November 15, 2007 – Comments (4)

So, look at the day, what was good about it?  Last post mentioned some of the news that seems constant to indicate that we are heading for a serious down turn in the market.  I couldn't help but notice the news all seemed "bad" still.

- Virgin Mobile - wider quarterly loss

- BEA - margins up but sales down.  They managed more profit this quarter but declining sales isn't good.

- Khol - lower profit and cut forecasts

- Progressive - lower earnings

- EKKKKK - $47.25 billion injection into the markets?  Be still my heart.  That's only about $150 for every man, woman and child in the US, maybe $500 per person actually in the work force.  This is the third major injection in recent months.

- California home prices down 8%

- Starbucks lowers guidance

- Out of 439 companies reporting earnings in the S&P, growth is -2.7%.  What kind of dumb junk is it when 64% have beaten expectations.  Expectations were that low yet the stock prices have NOT declined to meet those lower expectations, well, it does appear they are starting to correct.  But, what fools way of generating "good" news, set expectations so low, ie, with the country in negative growth in excess of -2.7% and then you can cheer when it isn't quite that bad, some stocks will even rally

- The energy index was up 14.5% on a 12 month basis and the food index was up 4.4%, over the same period. Transportation was up 5.8% and medical care was up 4.8%, over 12 months. (A big consumer squeeze coming here.  What ever will I do with my 2.5% raise?)

- Pitney bowes cuts 1500 jobs.

- Crumb, Canadian ABCP locked up... Canadian here, what does that mean to me?  Checked it out...  Pensions are being hit by the this stuff... 

4 Comments – Post Your Own

#1) On November 15, 2007 at 11:41 PM, abitare (99.33) wrote:

We are in a recession, which will become more apparent with time. I have run out of red thumbs. I am trying to find the stocks that will decline the most.

My WAG:

China, solar, financials, builders, airlines, shippers, retail, high flyers from 06-07

If you were really brave you could target Gold or oil.

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#2) On November 16, 2007 at 1:24 AM, dwot (99.48) wrote:

I guess targeting gold or oil would depend on whether you believe we'll see a level of hyper-inflation or deflation.

I'm thinking we'll see deflation because credit has created more of the increase to money supply than governments printing money.  With credit tightening up, money supply goes down....

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#3) On November 16, 2007 at 4:02 AM, abitare (99.33) wrote:

The most crowded trade on the planet... maybe in the history of the market is:

1. short the US dollar

2. Long gold and oil

But as the FED tighens and the funds / banks have to deleverage, they will have to sell some winnners. ie gold and oil

I would guess there is some downside risk on both of these. Maybe some serious downside risk, if war with Iran seems unlikely.

Long term gold and oil are a commodity that world will want more then theit is supply of.

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#4) On November 16, 2007 at 9:39 AM, dwot (99.48) wrote:

When you look at the demographics of the US population, I tend to think the US dollar isn't through declining.  The federal government has not a hope of paying all the pensions people think they have coming.

I think the biggest lie of my youth was in school when they talked about why third world countries had big families compared to North America because of the magic and omnipotence of government.  We did need to have big families to look after us in our old age, government would.

What the heck is government?  It is made up of tax payers and there is no net difference in burden for looking after people in their old age whether it is done by families or government.  With the average life expectance, if we had 100% employment for everyone for 40 years, what we expect government to do is have each of us pay out the equivalent to half the pension and medical costs of one person each year we work, and pay for the bureaucracy of having government manage this for us.

And people still seem to believe in the  all mighty omnipotent government...

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