Completely Nuts
February 25th, 2008 by 
reality
Just checking in from the boat. Dow up to nearly 12,600 with the credit markets still in deep doo-doo, regardless of S&P’s jiggery-pokery with the monoline insurers.
What are the bulls thinking is going to happen in the coming months? Do they think the economy can avoid recession and return to bubble-land? I guess they must. They are completely nuts.
Posted in Fixed Income, Stocks | 
February 25th, 2008 at 3:54 pm
As the french author said :
“There is no greater foolness than beeing wise alone”
But that’s OK : I also think that way, you are not alone.
February 25th, 2008 at 4:49 pm
They obviously think that the Fed will win the battle against deflation by using their Infamous Inflation Ray.
Given Powershares DBC index (crude oil, heating oil, gold, aluminum, corn, and wheat) 11% rise so far this year I would say that they are winning.
The rest of us are on track to lose with 60% inflation this year…
February 25th, 2008 at 9:43 pm
They have no idea of the shitstorm that’s coming…
February 26th, 2008 at 9:49 am
I used to think that I was dumb and the bigshots were smart. But now I have to wonder. Are they really clueless or do they have a master plan (beyond get rich and leave everyone else holding the bag)?
So I have been thinking about how my recent investment activities affect the economy and what would happen if everyone else is doing the same thing.
Six months ago I pulled my money out of money market funds and CDs because I didn’t trust the banks. This would cause a drop in M1 and make it look like deflation was coming.
Then I put my money into the stock market. This would explain the market rise last fall and create the appearance that all was well.
Then the parade of lies and coverups pushed me out of the general market into GLD. This would cause a general market fade and push up precious metal prices.
Now inflation is rising and GLD is brought to us by our derivative friends so I am moving into CEF (a more trustworthy form of paper gold) and other commodities. This explains the commodity rocket that we are currently seeing.
What I am trying to say is that TPTB are trashing more and more investment options with their dishonesty and pushing us into a smaller and smaller investment box (food, fuel and precious metals).
This drives up the price of things that we need and creates rising inflation. Rising inflation drives more people into the commodity box which creates even more inflation. Hence, our collective loss of confidence in the system is creating the thing that we all fear (a vicious inflation cycle).
Can the bigshots restore our confidence after so many lies and distortions or do we have to endure an inflationary phase followed by a crackup and then wait for time to erase these bad memories before investing can return to normal?
February 26th, 2008 at 8:52 pm
Markets don’t move in a straight line - every. The crash of 1929 was followed by a huge counter trend rally. There were many fits and starts in technology during the generational 2000-2002 bear market/depression in the sector. I think to wonder what the “bulls are thinking” is missing the point. Just as bulls become over confident in bull markets and lead to major corrections, bears get over extended and over confident in bear markets and lead to bear market rallies.
Rather than complain about it, I simply view it as a GIFT to reposition and be better prepared to take advantage of the next leg down. The post 9/11 rally didn’t make any sense, as the credit market was imploding during the initial stages of the Enron/Worldcom environment. Bear market rallies are as normal and to be as expected as corrections in a bull market. I believe focusing on that reality is much more productive than conspiratorial venting about market manipulation.
March 24th, 2008 at 3:53 am
omg.. good work, brother