More on The Suckers Rally?
The Fat Lady Isn't Even Humming...
Since the bailout of Bear Stearns, the SP500 is up 12% from its 19 month low, the largest rally in over 4 years.
With beaten up financial stocks leading the way on an 11% increase. SP500 companies are valued at 22.7 times profit, the most in four years.
However, options traders are paying 63% more to protect against a drop in the S&P 500 than to bet on a gain.
Jean-Marie Eveillard, who runs the $22 billion First Eagle Global Fund: "It may be a suckers' rally.
Investors want to believe. But if I'm right, then there's truth to the argument that this is the worst financial crisis since the end of World War II."
Professor of economics and international business at NYU Stern School of Business, Noriel Roubini, "This is a temporary, bear-market rally.
You're going to have further losses for the financial system and weakening of demand of employment,
of earnings, of profitability that's going to push further down the stock market.
There is complacency among investors thinking that the worst is behind us for credit markets and for financial markets and for the real economy.
This is not the year to be in risky assets like equities."
Hattip to Bloomberg.
Since the bailout of Bear Stearns, the SP500 is up 12% from its 19 month low, the largest rally in over 4 years.
With beaten up financial stocks leading the way on an 11% increase. SP500 companies are valued at 22.7 times profit, the most in four years.
However, options traders are paying 63% more to protect against a drop in the S&P 500 than to bet on a gain.
Jean-Marie Eveillard, who runs the $22 billion First Eagle Global Fund: "It may be a suckers' rally.
Investors want to believe. But if I'm right, then there's truth to the argument that this is the worst financial crisis since the end of World War II."
Professor of economics and international business at NYU Stern School of Business, Noriel Roubini, "This is a temporary, bear-market rally.
You're going to have further losses for the financial system and weakening of demand of employment,
of earnings, of profitability that's going to push further down the stock market.
There is complacency among investors thinking that the worst is behind us for credit markets and for financial markets and for the real economy.
This is not the year to be in risky assets like equities."
Hattip to Bloomberg.
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