SPX: Flat for the Year
Congratulations!
Your investment returns Year-to-date are = 0.00%
Be sure to thank your friendly "Fed-Model-says-stocks-are-cheap / Sub-prime-doesn't-matter / Valuations-are-reasonable / Buybacks are great / Consumers-are-fine / Earnings-are-great / there-is-no-inflation" perma-bull for all their great advice.
Enjoy your Thanksgiving!
Wednesday, November 21, 2007 | 04:00 PM | Permalink
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Dow close below 12845 = bear market signal.
Posted by: www.cruelesttax.com | Nov 21, 2007 4:13:06 PM
Remember BR, even if your turkey is 5 pounds bigger this year, it really isn't because the amount of stuffing hasn't changed according to BLS calculations....
On a serious note, at the beginning of every year, many pundits proclaim the upcoming 12 months will be a "stock-pickers" year. Ignoring the patent idiocy of that, 2007 really has been. If you simply avoided financials and home builders, you would be many many points above zero. There are tons of stocks both large and small alike that are up huge amounts.
Any stats on the standard deviation of fund returns versus that 0% ytd number? Is it greater than normal?
Posted by: Jay Weinstein | Nov 21, 2007 4:17:41 PM
The parallels between 2007 and 1929 are uncanny and somewhat unnerving - I found this testimony by Robert Kuttner to the House Finance Committee to be worth the read: http://www.prospect.org/cs/articles?article=the_alarming_parallels_between_1929_and_2007
Posted by: Winston Munn | Nov 21, 2007 4:19:03 PM
Winston Munn: thank you.
Posted by: mdy | Nov 21, 2007 4:44:46 PM
"Has deregulation left the economy at risk of another 1929-scale crash?"
Deregulation? Like Sarbanes Oxley and the PATRIOT Act? The regulatory drag on the economy is substantially greater than it was when the current free market extremist president took office.
Posted by: The Dirty Mac | Nov 21, 2007 4:45:00 PM
The Big Grinch who stole Thanksgiving!!!!
Posted by: Test | Nov 21, 2007 4:46:13 PM
This is that part of the ride were you're weightless....everything is calm and peaceful....but gravity is not done with you yet.
Posted by: Kp | Nov 21, 2007 4:49:01 PM
I think Asian markets get clocked tonight.
We'll see...
Posted by: Eclectic | Nov 21, 2007 5:05:42 PM
I can't wait to see what Kudlow has to say about this, but seriuosly I now know we can't believe anything these people say (the government). Paulsen is trying to protect his butt and Bernanke seems to be ignorant of all the facts. Where is Paul Volcker when you need him!
Posted by: John Bennett | Nov 21, 2007 5:07:16 PM
Return 0.0% ? I have multiple Puts on the S&P. Your thin bird is my plump goose. Happy Holiday.
Posted by: OldVet | Nov 21, 2007 5:08:15 PM
Deregulation? Like Sarbanes Oxley and the PATRIOT Act?
No, deregulation as in Glass-Steagall.
I guess you would be the one of those who roast red herrings for Thanksgiving.
Posted by: cranker | Nov 21, 2007 5:19:37 PM
I was wondering if there were anything, which would give a good picture of currency values. It does seem that salt is so ubiquitous, that the price /kilo wholesale should therefore reflect the value of currencies. Does anyone have a chart?
Posted by: scytale | Nov 21, 2007 5:24:26 PM
"I can't wait to see what Kudlow has to say about this"
OK John, here ya go....
"Everythings undervalued - now's a good time to pick up bargains!!!!!"
Posted by: jojo | Nov 21, 2007 5:26:53 PM
Barry, to you, your family, and the merry band of readers here, Happy Thanksgiving!
Looks like a big trading range in that SP500 chart to me. Notice how the rallies are slow and grinding, while the corrections are spikes down. The bull trend is still intact.
Many folks in early October were on the sidelines wishing the market would give them a chance to get in at lower prices. Here it is. I bet those same folks are now waiting for the market to bounce to give them a chance to short. Can't satisfy the wrong-way wonders!!
Posted by: muckdog | Nov 21, 2007 5:38:09 PM
Gravity is just another contrarian indicator. Sold to you. Thanks for playing.
Posted by: viamede | Nov 21, 2007 5:38:44 PM
"Fed-Model-says-stocks-are -cheap/Sub-prime-doesn't-matter/Valuations-are-reasonable/Consumers-are-fine/Earnings-are-great /there-is-no-inflation"
Bull's Eye. Cheers.
Posted by: patient renter | Nov 21, 2007 5:39:58 PM
[Simpson's episode; Old Gil crashes his car and emerges from the wreck]
"-- Oh, boy! Gil's gonna collect big from insurance! I'll be eatin' food tonight!"
Enjoy the holiday!
Posted by: Short Man | Nov 21, 2007 5:40:22 PM
Somewhat off topic but potentially portentous turkey day news, flightless birds indeed:
Light check-in volume surprised travelers departing from the United Airlines terminal at Los Angeles International Airport."We were expecting a much longer delay. LAX is infamous for that," said Charles Gwyer, 70, of Philadelphia. He and his wife were heading to Hawaii for a family gathering after a stopover in Los Angeles.
"It's empty, that's weird," Mike Patulo, 23, said at Newark Liberty International Airport in New Jersey, where he arrived by 8 a.m. for a 10 a.m. flight to Cleveland.
http://www.newsvine.com/_news/2007/11/21/1113631-surprise-short-lines-for-some-travelers
Posted by: KirkH | Nov 21, 2007 5:42:32 PM
Market looks a lot more interesting at 1415 than it did at 1550...
Posted by: Moose | Nov 21, 2007 5:43:16 PM
I had a question as it regards to the "freezing" of teaser rates in California. Assume it can really be done. If the FED (ie you and me) has to bail out banks and lenders that are going to have massive losses from the restructuring, should the mortgage interest tax deduction be withdrwan from those homeowners that benefit from the lower fixed rates? It would seem like a double windfall to me to allow the deduction to stand. Any ideas? I have a poll up on my site where you can vote on it. Have a good holiday!
Posted by: JJL | Nov 21, 2007 5:44:16 PM
I mentioned a poem I recalled from the 1970's. I believe it was in the Economist Magazine. Here is the rest.
With appologizes to Ben Franklin.
"you better buy now instead of tomorrow
when things will cost more, you'll find to your sorrow
In all of my travels, this one thing I've learned
A penny spent, is a penny earned."
Having just returned from the grocery, I should have bought Thanksgiving dinner in July! Mantra next year "hoard sugar."
Peace to all.
Posted by: Ross | Nov 21, 2007 5:51:28 PM
Barry, I see you are a glass half full kinda guy. If you put this in actual "what can my dollar buy now terms", you will find yourself down about 10% in our new global economy. Trade weighted dollar index opened Jan 07 at 83.26 and currently stands at 75.07. Now back to your regularly scheduled holiday.
Posted by: Chris | Nov 21, 2007 5:52:37 PM
Well hey, if you look at the SPX in relation to the Euro:
http://stockcharts.com/h-sc/ui?s=$SPX:$XEU&p=D&yr=3&mn=0&dy=0&id=p46522790569
you can see that we're below June 1, 2005!
Looking further this ratio you can also see a head-and-shoulders top which began in late September 2006, peaked at 11.5 in June 2007 and crossed below its neckline of 10.4 on November 5 2007.
By the rules of reading tea leaves of this type, the bottom of this ratio should be at 9.3, which at this rate will be only 3-4 more trading days.
And there's your silver lining for the holiday weekend!
Posted by: attobuoy | Nov 21, 2007 5:55:17 PM
once again you could have made nice money in stocks thru end of April, sold it all and gone to cash at 5% and come up smiling. now, just where is that year-end entry point...?
Posted by: scorpio | Nov 21, 2007 6:10:41 PM
In the above post, I was not claiming that a 1929-like event will or even might occur. The point of posting Mr. Kuttner's testimony was simply to show that the same types of risks that were present then are present now.
This capsulizes the risks best, I think.
"....financial history suggests that the abuses and risks are all too similar and enduring. When you strip them down to their essence, they are variations on a few hardy perennials -- excessive leveraging, misrepresentation, insider conflicts of interest, non-transparency, and the triumph of engineered euphoria over evidence."
It is impossible to logically refute that all of these risks have been resurrected.
I especially like the last phrase, and I would like to thank Barry for The Big Picture to help all of us find the evidence that is obscured by "engineered euphoria".
History shows that when these 5 risks reach critical mass a correction is bound to occur - the only debate at that point is how deep and how long the suffering lasts.
Posted by: Winston Munn | Nov 21, 2007 6:27:51 PM
