Time Cover: Soup Lines
A few caveats with contrary indicators such as below:
First, they are quite imprecise in terms of time. Recall the August 13, 1979 BusinessWeek Death of Equities cover -- it wasn't THE low, but it was 12 years into a Bear market, and a respectable entry point that was retested a few years later. (The true breakout was 1982). Same with Jeff Bezos as Time's 2000 Man of the Year -- the market still had months and 1,000s of points to go.
But this tells us we are closer to the bottom then the top -- even if its only a trading low.
Hat tip Kid Lane
Wednesday, October 08, 2008 | 02:00 PM | Permalink
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to piggy back barry's time cover, a poignant post at calculated risk:
http://calculatedrisk.blogspot.com/2008/10/adjustment-process.html
Posted by: karen | Oct 8, 2008 2:06:21 PM
Stop worrying about the economy.
I have a plan which will create millions of new jobs, and begin another real estate boom…
... in Iraq.
Posted by: John McCain | Oct 8, 2008 2:08:11 PM
Good stuff today barry.... Feels like sentiment may be lifting...
quite over here.... feels like everyone is jumping.....
;)
Posted by: Eric Davis | Oct 8, 2008 2:12:13 PM
NO SOUP FOR YOU!
Posted by: Soup Nazi | Oct 8, 2008 2:19:54 PM
Barry or anybody out there,
Some questions:
The added liquidity increases the money supply, as opposed to the 1930's depression where the money supply contracted, correct?
If so, where will all this money want to go? Will this just be the fuel for an inevitable next bubble?
Will the next bubble, what ever that may be, be even bigger and end up even more disastrously?
Posted by: frankinomaha | Oct 8, 2008 2:21:49 PM
I agree BR, it feels diferent, it might be a short term rally.
Posted by: david | Oct 8, 2008 2:23:51 PM
I have stayed in with my anti-crammer trade since Monday and must admit if it does not work out, I can use some help from soup kitchen.
Boy a one day 20% drop is much better than daily 5% down moves for 6 weeks. I think we have a trade-able bottom in place.
wall street has the inside scoop of paulson's 3 PM annoucement.
Posted by: Nihilism | Oct 8, 2008 2:26:53 PM
Hey, it's the last month of a Presidential election. We *ALWAYS* have a homeless crisis, a government crisis, a new Depression looming when there is a Republican incumbent.
You won't be seeing any covers like this after Nov. 4 when Barry O. is POTUS! The problems will still be there, but the heavy dark toned news will be much much sunnier and happier. Count on it.
Posted by: RW | Oct 8, 2008 2:29:53 PM
VIX spiked over 59 - don't think it's ever been there before, or at least not since 1990 (far back as chart goes)
Sure, it could go to 100, but everybody's in panic territory now, so I like BR's call of 9K - maybe it'll go to 7K or so next drop, but this looks like a bounce floor at least
Posted by: buzzp | Oct 8, 2008 2:31:46 PM
If the market stays green today there's a big sigh of relief from many people.
Posted by: John Borchers | Oct 8, 2008 2:35:58 PM
Shorties better get covered here and sell those deep puts.
We will get another look into the abyss I am sure, but VIX 59 ???
Watch out for an absolute screamer into the close today or tomorrow. We came down so far so fast that the first true resistance is up at SPX 1100.
Posted by: leftback | Oct 8, 2008 2:40:06 PM
Thank you Leftback. I read those articles.
Let's see if I have this straight:
Things won't get better until real estate bottoms.
While waiting for real estate to bottom, investors flock to treasury safe-haven. Due to increased demand, lots of trasury sales.
The sales lead to higher T-bill rates, which leads to higher mtg rates.
Higher mtg rates means keeps real estate from finding the bottom.
And we're almost back to where we started---only we're just a little bit worse off....
These guys are chasing their own asses so furiously, they've turned into human drill bits---burrowing deeper and deeper....
Either they run of of energy soon, or they hit paydirt---and we get a meltdown from the earth's core.
Posted by: Dan Duncan | Oct 8, 2008 2:41:07 PM
this bear market hasn't even had a birthday yet and you are calling a bottom?
Bear market...think at least 5 years.
Posted by: AbeSklaroff | Oct 8, 2008 2:49:48 PM
I’m not worried about the market, because I have a friend in Nigeria that is going to send me some money to help me recover my losses. For a small fee he can help you too. But hurry because he only has 50 or 60 million left.
Posted by: gunthestops | Oct 8, 2008 2:54:05 PM
@leftback, just left a similar post on the previous thread...
we did come down so far so fast, didn't we?! that's the one thing i didn't expect. and i wasn't short because of the fed/treas tricks. it's not a free market and i won't forget it.
Posted by: karen | Oct 8, 2008 2:56:40 PM
yen looks a little peakish to me right now....
I'm short the dec yen futures at 1.008.
SP500 looks like it wants to congest and move higher. It would be classic for the SP500 to stage a tremendous rally tomorrow, AFTER THE SHORT BAN GETS LIFTED.
There are plenty of short sellers that have been HOLDING shorts like a treasure BECAUSE they couldn't reload them.
I'm expecting option volatility to DROP like a stone with the lifting of the shorting ban.
Chris Cox and Co. will be revealed as the TRUE morons they are for that asshat move.
circa Dec SP500 futures: 1056 is first resistance....if it breaks there then 1107 will be next BIG resistance.
- AT
Posted by: Andy Tabbo | Oct 8, 2008 2:56:57 PM
Hi Barry
I'm a fairly new reader and as a busy mom I was wondering---if you could choose just one info stream for news etc, what would it be?
sorry if you've posted it recently---I have not scrolled back to far looking
thank you if you can give me your opinion
Jay
holding my own in Canada!
Posted by: Jay Laflamme | Oct 8, 2008 2:58:36 PM
Abe, check your history. The avg. bear market does not last anything close to 5 yrs. If memory serves, it's closer to 1 yr. and certainly no longer than 2 yrs.
I agree with BR. Not sure if the bottom is here or 20% lower, but the next 12 mos. should be a great buying opp.
Posted by: Adam | Oct 8, 2008 2:59:49 PM
Secular bear or cyclical bear, Abe?
If we are in a secular bear that began in 2000, we are already 8 years into it.
if we are in a cyclical bear that began in 2007, much different story.
As always, it depends on your time frame and how you define your terms.
Posted by: babycondor | Oct 8, 2008 3:00:13 PM
Frankinomaha,
Short answer: nobody knows.
Longer answer: The TARP plan essentially puts government debt in place of mortgage debt. At this point, we don't know how the price of the swap relates to carrying costs, we don't know how the duration of the treasury debt compares to the duration of the debt being swapped, and we don't know how former holders of the bad debts will use the liquidity once it's available to them.
Posted by: Estragon | Oct 8, 2008 3:00:55 PM
Notice how regimented the people of the 1920's were. Dressed in suits and waiting nicely in line. They seem to wait for the gov't to tell them what to do and then do it. If we are headed for bad time, I think that today’s citizens will not act so nice and orderly.
Posted by: johnnyvee | Oct 8, 2008 3:01:06 PM
I am shocked at recent moves by the FED. If they are entering the commercial paper market, they can move money (taxpayers) any where they want by any amount (nearly). They may even make consumer loans in the near future! (things would have to get really bad in commercial banks for this!)
Posted by: mw | Oct 8, 2008 3:04:46 PM
@RW
quite astute and I am in complete agreement with your take on it.
Regardless of Bush's legacy(it will not be nice) I believe the media piles on intentionally and methodically in order to fulfill their own personal agendas.
If or when Obama becomes POTUS, you will see the MSM support him as vigorously as they condemned Bush.....they will start playing up good news and talking about how the worst may be behind us and hope is on the way.
I am no fan of either party(D or R) and I do not think either candidate is good enough for the Potus position.......
I may go with my original plan and write in Ron Paul since he was the ONLY candidate who had a grasp of the brewing economic storm that was headed our way.
Posted by: David | Oct 8, 2008 3:06:12 PM
@BR " ... even if it's only a trading low."
So what would constitute an actual low? DJIA @ 5000 with everything even more strongly oversold than it is now? NASDAQ at 3 digits? Trading systems crash due to ginormous sell volume and zero buy orders? Exchanges closed for multiple days while Hank and Ben huddle, trying to figure out what to try next? Martial law invoked to deal with raging mobs torching their worthless homes? Godzilla emerging from the ocean and charging into Wall Street?
Inquiring minds want to know, what to be on the lookout for.
Posted by: constantnormal | Oct 8, 2008 3:09:15 PM
After all is said and done, Dubai will see the biggest implosion of real estate market.
Posted by: Sam Jacob | Oct 8, 2008 3:15:37 PM
