Is the stock market going to tank?

[char]

So, are we just fucked at this point? Passing tax cuts which add a $800b to the debt and a continued inability to really deal with the debt.

Are we on a downward spiral or is this going to turn around?

For those of you who think it is going to spiral, what is you plan? Leave the country?

[Brock Landers]

And go where...Ireland? Greece? Italy? Rwanda? Argentina? Everyone cant fit into Australia

Problem was way before the tax cuts- without the cuts theres simply a lot less disposable income to keep the tepid economy afloat. With the cuts we are kicking the can down the road. Again. Both scenarios suck.

I think the main thing isnt the tax revenue base but costs. We spend a ton on a ton of things, and no politician wants to tell his constituents there are going to be cuts, which sucks because thats what is needed. What do we spend on defense- 600Billion annually? We cant get by with 400Billion?

[4matic]

So, are we just fucked at this point? Passing tax cuts which add a $800b to the debt and a continued inability to really deal with the debt.

Are we on a downward spiral or is this going to turn around?

For those of you who think it is going to spiral, what is you plan? Leave the country?

For sure a downward spiral fiscally. Deficits don't matter..

But. It's good for companies with people having more to spend. The decline in bond prices will also cause re-allocation to equity. The charts of SPX are still very bullish with a tight range right at two year highs (get in or get left behind). 1300 SPX is reasonable on this move up. Typical pattern most years has been a rally into the first quarter and then a significant decline. Very rotational market now with year end rebalancing and such.


I bought bonds yesterday since the ten year got into long term support around 3.5% (blended fund with 5 year duration). I expect a test of 3% yield at some point next year. I'm 60/30/10 stocks bonds cash.

[liv2ski]

For sure a downward spiral fiscally. Deficits don't matter..

But. It's good for companies with people having more to spend. The decline in bond prices will also cause re-allocation to equity. The charts of SPX are still very bullish with a tight range right at two year highs (get in or get left behind). 1300 SPX is reasonable on this move up. Typical pattern most years has been a rally into the first quarter and then a significant decline. Very rotational market now with year end rebalancing and such.


I bought bonds yesterday since the ten year got into long term support around 3.5% (blended fund with 5 year duration). I expect a test of 3% yield at some point next year. I'm 60/30/10 stocks bonds cash.

Damn 4matic, that sounds straight out of the mouths of the talking permanent bulls at cnbc. I don't think I could disagree with you more. But that is what keeps things interesting. Good luck on those bond purchases.

[4matic]

Damn 4matic, that sounds straight out of the mouths of the talking permanent bulls at cnbc. I don't think I could disagree with you more. But that is what keeps things interesting. Good luck on those bond purchases.

Some of my last statement was rhetorical "get in or get left behind" as just one of the driving forces. As you know, I was buying dips and reallocating to equity in the weeks and months after flash crash. I was buying stock at 1010 SPX. With regard to bonds, as the 30 year approaches 5% what conservative investor wouldn't take that guaranteed after the last decade? I was at 15% income just two months ago..

I'll be looking at Munis tomorrow with the rest of my taxable cash:

Bill Gross buying munis.

http://www.bloomberg.com/news/2010-1...ond-funds.html

Pacific Investment Management Co.’s Bill Gross, manager of the world’s biggest mutual fund, put $11.4 million of his personal wealth into five closed-end funds that invest in corporate debt after buying shares of five that buy municipal bonds in the past week.

[Hugh Conway]

And go where...Ireland? Greece? Italy? Rwanda? Argentina? Everyone cant fit into Australia

< duh > the countries who are buying Australia's resources? without mining/resources Oz is fucked - they've an overpriced housing market like the rest of the Anglophone world, an increasingly uncompetitive services market and, worse than the US, a big water/development problem coming down the pipe or, er, nothing coming down the pipe. Australia is just a feeder for China, so er, how about China? or Vietnam. Or Thailand. Good food, cute girls, cheap beer. Sounds better than $22.50 CRUS call options

[Brock Landers]

<duh> Because I always wanted to work on a rice paddy.

Come on try harder.

[Hugh Conway]

Because I always wanted to work on a rice paddy.

[Lonnie]

a big water/development problem coming down the pipe or, er, nothing coming down the pipe.

You've never heard of a membrane bio-reactor have you?

[Toadman]

So, are we just fucked at this point? Passing tax cuts which add a $800b to the debt and a continued inability to really deal with the debt.

Are we on a downward spiral or is this going to turn around?

For those of you who think it is going to spiral, what is you plan? Leave the country?

Haven't you been paying attention? Trickle down is the BOMB!!

[grapedrink]

here's one for benny, 60 minutes piece on state deficits: http://www.cbsnews.com/stories/2010/...in;cbsCarousel

[Benny Profane]

Something tells me that Meredith Whitney is having a hard time getting her biz open when all the old boys are being rewarded by the Treasury for past sins. Time will tell how tough she is.

[4matic]

Meredith Witney had one good call. She's been dead wrong for two years since she went on her own. Although, she did have a good trade last summer to underweight and short money center banks.

A break above the double top on the weekly indicates 1300 on the SPX imo. I'll move some money out of equity on trade above 1280.

California has never defaulted on a bond. Cal State bond obligations are a very small percent of revenue. The chance of complete default is zero. I would buy PCK right here.

[Benny Profane]

California has never defaulted on a bond.

True, and it would be quite the moment in history if it happened, but you tell me how this will work itself out within the next decade or two. If you think this thing going on over in Europe is bad and just a can getting kicked over and over, wait until our little sovereign debt crisis really starts to unravel. If not the '12 election, then definitely the '14 and '16 campaigns will be dominated by this. And don't be surprised if Christie is front and center.

[Brock Landers]

California has never defaulted on a bond.

Like she said- do you want to wait until there is a problem (default) to recognize things are fucked? Cali has been dishing out I.O.U.s to pay its debt...last time i saw those were in Dumb & Dumber so yeah, I think thats indicative of a pretty serious problem.

Im not sure how long the US government can prop up some of these states- its similar to Germany vs the PIIGS, except the US Govt is printing money anyway for itself. She is right though, state finances across the country are every bit as fucked as the Feds, if not quite a bit more

[retirwntm]

things worked out fine in dumb and dumber...what's the problem

[SkiCougar]

short term - correction coming, we're up to 2007 overbought ranges again. mid term, still bullish as long as the FED keeps pumping money: http://www.zerohedge.com/sites/defau...20vs%20SPY.jpg - chart shows stocks have risen since the Fed has been throwing in. i'm not getting out again until they stop.

[Tuckerman]

So, are we just fucked at this point? Passing tax cuts which add a $800b to the debt and a continued inability to really deal with the debt.

I don't understand? If I get less in my pay check I don't continue to spend I reduce my spending to a level that I can afford. So if the goberment is bringing in less why not just spend less to make up for it?

[gh444]

I don't understand? If I get less in my pay check I don't continue to spend I reduce my spending to a level that I can afford. So if the goberment is bringing in less why not just spend less to make up for it?

Because Macroeconomics and your personal budget have much different characteristics, forces and outcomes.

[Benny Profane]

Is it just me, or has CNBC just really gone over the top lately when it comes to their schilling for the industry? I know, I know, they've been awful a lot, Home to Cramer and all that, but over the last few weeks I turn them on the TV or radio and have heard such incredible crap. Yesterday they had a happy smiley real estate snake oil salesman who sounded almost like the old late night infomercials of the early 21st century, and he was called up as an "expert". Today I heard basically lies coming from a few money managers - that wages were up, homes were moving, here's where to put your money. Frontrunning? nah. Who would imagine, especially when it's so out there? I guess this is what happens when nobody goes to jail.

[skiballs]

See P.t. Barnum

[ass-to-mouth]

we need another crash asap. the first "crash" did nothing.

[ass-to-mouth]

Is it just me, or has CNBC just really gone over the top lately when it comes to their schilling for the industry? I know, I know, they've been awful a lot, Home to Cramer and all that, but over the last few weeks I turn them on the TV or radio and have heard such incredible crap. Yesterday they had a happy smiley real estate snake oil salesman who sounded almost like the old late night infomercials of the early 21st century, and he was called up as an "expert". Today I heard basically lies coming from a few money managers - that wages were up, homes were moving, here's where to put your money. Frontrunning? nah. Who would imagine, especially when it's so out there? I guess this is what happens when nobody goes to jail.

Eh. Just the usual cheerleading before the spring market kicks into gear after the holidays.

[4matic]

Is it just me, or has CNBC just really gone over the top lately when it comes to their schilling for the industry? I know, I know, they've been awful a lot, Home to Cramer and all that, but over the last few weeks I turn them on the TV or radio and have heard such incredible crap. Yesterday they had a happy smiley real estate snake oil salesman who sounded almost like the old late night infomercials of the early 21st century, and he was called up as an "expert". Today I heard basically lies coming from a few money managers - that wages were up, homes were moving, here's where to put your money. Frontrunning? nah. Who would imagine, especially when it's so out there? I guess this is what happens when nobody goes to jail.

Why pick one guest to generalize? They have Roubini, Pento, Schiff, Schilling, Rogers, Prechter and all the other doomers. Of course they have cheerleaders, 90% of all people are long only.

Stick with reading Zerolongs, Zerorights, or whatever the doomer press is you choose to frequent. I like CNBC and Bloomberg.

[Benny Profane]

First, I brought up two cases of BS, not one. I could easily talk about many more, but, I have a life. Shit, Cramer and that Fast Money show could keep me busy 24/7. Second, Bloomberg and CNBC is classic apples and oranges. I listen and watch Bloomberg a lot, and its much less biased politcally and smarter and more honest when it comes to money. Third, you really have to recognize the difference between a media schill like the industry hacks that appear on CNBC and academics like Roubini, who, btw, gets plenty of air time there, but, hes not selling me shit.

That said, the one thing I learned this year is not to fight the Fed. That, and momentum. It certainly isnt about the basics in the economy, which still pretty much suck. I do like that investment writeoff in the new tax bill, though. Im betting that a lot of computers and networks will be upgraded in 11. Im shopping for an ETF in the IT world for that.

Zero Hedge is way over the top for me. I read Naked Capitalism, Big Picture, Calculated Risk, Seeking Alpha, and Simon Johnson. Taibi is always fun.

happy holidays and make money in 11