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The Current Bear Market: Death By a Thousand Cuts |
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| Jul 02, 2008 02:51 PM UTC |
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Tracked Blogger
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7/2 - "The general stock market behavior recently has been painful, to say the least. Now with DJIA broke below March low, any hope of a quick ending on the current bear market diminishes...January and March lows will not hold for the current on-going bear market, and we should expect a 2nd leg down leading the S&P toward the $1,100 level." "Usually, strong rallies happen during a bear market, partially due to short squeeze but more due to false hope that the bear market will end soon and greed will take over, as investors try to pick a "bottom". This kind of bottom picking rarely works, especially during the early phase of a bear market, when sovereign wealth funds [SWF] buy investment banks and other financial institutions in the 1st half of this year." "I am also very concerned about baby boomers getting close to retirement. According to Jeremy Siegel, a professor at the University of Pennsylvania's Wharton School, his computer model shows that, putting aside help from overseas investors, the boomers' retirement could cause stock prices to fall 40% to 50%." "During a bear market and financial turmoil, capital protection and preservation is far more important than taking risk for capital gain. Gold also provides good protection to double digit inflation which we are currently facing (not the government published scale-down figures). When inflation expectation skyrockets, long bonds will suffer heavy losses and TIPS won't provide protection from price increases on energy and food. With equities, bonds, real estate and US dollar all falling to face a slow death by a thousand cuts, only gold can save us now." 
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 N/A risk: moderate |
Massive Job Cuts Coming
6/28 - "CNN Money is reporting State, city layoffs: 45,000 and counting...The effect of those layoffs will far outweigh any benefit of the economic stimulus package, much of which was already spent. We must use the word benefit loosely because government giving away money it does not have never produces any economic benefit...Bloomberg is reporting Financial Firms May Make Deeper Cuts, Eliminat...
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14% risk: moderate |
Two Moves to Make as the Fed Inflates the Commodities Bubble
7/2 - "U.S. Federal Reserve Chairman Ben S. Bernanke ignored the warnings of most economists last week, and kept the benchmark Federal Funds rate at 2%, far below the actual rate of inflation.
As a result of this non-move, investors can probably look forward to having the global commodities boom continue for at least a while longer."
"The reason for this intense advance in commodity price...
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