A Sucker's Rally?
The Nattering One has already gone on record and need not reiterate to faithful Naybobs,
as Bloomberg's Micheal Sesit hits the head of the bulls on a nail.
Instead of adding to their holdings, investors might consider using the current rallies as an opportunity to sell shares.
More bluntly, David Roche, president of Independent Strategy, calls the equity- market advance "a suckers' rally."
The looming recession in the U.S., the accompanying slowdown in global growth
and the expectation of additional bank losses on assets other than mortgages suggest that stock markets have further to fall.
Earnings forecasts also are probably too optimistic, given declining consumer sentiment.
What's more, monetary and fiscal authorities seem unable to come up with a solution to
the credit crisis short of injecting a huge dollop of inflation into the world economy.
The biggest threat to global stock markets lies in a combination of the continued unwinding of big bets
that banks, hedge funds and others made on mortgage-backed securities with borrowed funds and a likely U.S. recession.
A decline in growth will result in increased bankruptcies and defaults, higher unemployment and reduced consumer spending.
The anticipated decline in consumer incomes, which, combined with the increasing burden of excessive debt, will mean increased defaults and fire sales of assets.
The credit crisis isn't over, Rather it is getting worse as the deleveraging process intensifies.
Stock indexes for Japan and Europe are already below their 200-week average, and the Nasdaq Composite Index is a fraction above its.
It wouldn't be unrealistic to expect the rest of the markets to decline further to their 200- week moving average.
The Nattering One muses... and that additional 8-10% decline from current lows, might just be a good start.
as Bloomberg's Micheal Sesit hits the head of the bulls on a nail.
Instead of adding to their holdings, investors might consider using the current rallies as an opportunity to sell shares.
More bluntly, David Roche, president of Independent Strategy, calls the equity- market advance "a suckers' rally."
The looming recession in the U.S., the accompanying slowdown in global growth
and the expectation of additional bank losses on assets other than mortgages suggest that stock markets have further to fall.
Earnings forecasts also are probably too optimistic, given declining consumer sentiment.
What's more, monetary and fiscal authorities seem unable to come up with a solution to
the credit crisis short of injecting a huge dollop of inflation into the world economy.
The biggest threat to global stock markets lies in a combination of the continued unwinding of big bets
that banks, hedge funds and others made on mortgage-backed securities with borrowed funds and a likely U.S. recession.
A decline in growth will result in increased bankruptcies and defaults, higher unemployment and reduced consumer spending.
The anticipated decline in consumer incomes, which, combined with the increasing burden of excessive debt, will mean increased defaults and fire sales of assets.
The credit crisis isn't over, Rather it is getting worse as the deleveraging process intensifies.
Stock indexes for Japan and Europe are already below their 200-week average, and the Nasdaq Composite Index is a fraction above its.
It wouldn't be unrealistic to expect the rest of the markets to decline further to their 200- week moving average.
The Nattering One muses... and that additional 8-10% decline from current lows, might just be a good start.
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