3 Prior Market Crashes

Today’s chart porn comes to us via Bob Bronson.

Here’s a comparison of 3 prior market crashes: 1930, 1962, 1987 and today. (Note that there is no guarantee that this will be a crash, or if it is it will be the same as those others):

>
1930, 1962, 1987, 20084_crashes

Source: Bronson Capital Markets

>

We are getting to a point where markets are oversold, and due to
bounce. But understand what odds we are facing here: A deep recession
likely awaits us, and with it, earnings compression, and lower — often
considerably lower — stock prices.

We will hear a lot of noise about Fed action, stimulus plans, etc.
— every reason why you should jump back in here — but all that
intervention will accomplish is delay the inevitable washout.

>

 

UPDATE: January 23, 2008 4:15pm

Wow, that was a helluva bounce.

The rumors of NYS helping to arrange a capital bail out of the monolines didn’t hurt.

And, it can keep going — perhaps over the next few weeks — to SPX 1,400 or so . . .

What's been said:

Discussions found on the web:
  1. anon commented on Jan 23

    I’d like to see these in log scale.

  2. RichardN commented on Jan 23

    Yeah, I’d also like to see them on the same time scale.

  3. jkw commented on Jan 23

    That is a very pessimistic graph to produce this early in the process. If this is the bottom, I don’t think people will be calling this a crash. Also, that is three prior crashes compared to what is happening now (which may or may not be called a crash later).

  4. SINGER commented on Jan 23

    WHOA!!! Good Chart Porn…

  5. Michael C. commented on Jan 23

    >>>I’d like to see these in log scale.< << >>>Yeah, I’d also like to see them on the same time scale.<<< Guess I'm not the only one. I'm having a hard time comparing this market with the prior 3 since nothing is to scale. Spun like a politician to make for a better story and visuals, rather than truth/facts be told.

  6. Estragon commented on Jan 23

    BR – “but all that intervention will accomplish is delay the inevitable washout”

    Ummm, I think it’ll accomplish much more than that. The crash (or lack thereof) has significant implications for the future structure of the economy. For example, the deflationary aftermath of the 1929 crash created an aversion to debt that lasted for the lifetimes of those who lived through it. Had “appropriate and timely” action been taken at the time to avert those consequences, postwar economic history (possibly history itself) would likely have been quite different.

  7. John Borchers commented on Jan 23

    I’m in long as of today. If we get a crash that could only be a gift to me long term and I’ll surely put more cash in.

    There’s been a real disconnection from reality here. Earnings are not so bad and people are expecting them to be quite terrible.

    I’m willing to take the risk. Good luck to other bears and bulls.

  8. Michael C. commented on Jan 23

    >>>The crash (or lack thereof) has significant implications for the future structure of the economy.<<< In addition, how much of the nations wealth is in the market now as compared to prior periods? I believe Tony Crescenzi once wrote that for every $1.00 that the market now loses, the economy loses $.04.

  9. Estragon commented on Jan 23

    Michael C. – “Spun like a politician to make for a better story and visuals, rather than truth/facts be told.”

    It seems to me (at the risk of putting words in the mouth of our host) that BR’s point is the emotions and psychology at play, not specific time or price dimension.

  10. Wonderwood commented on Jan 23

    All I know is that I cashed out my 401k in October. Burn baby burn!

  11. Mr. Obvious commented on Jan 23

    Earnings are “not that bad”? Financials are going to have crap earnings next Q…and that is if the bond insurers don’t go under, causing the dominoes to fall.

    On more than a couple boards, I see that Joe Average has been getting their 401K statement and they are shocked by how much they have lost. Regardless of the fact that they have not really “lost” anything, and that these are LT funds, the psychological impact is clear: No more Uggs for you.

    Even APPL, the wonderboy of the market, missed with their sales of ipods and see the consumer putting their hands back in their pockets.

    The disconnect from reality has been the market for the past two years, living off of cheap credit like a crack whore.

  12. Jim Haywood commented on Jan 23

    If techs are leading indicators as they used to be, AAPL and GOOG say those four charts could match in a few days. Over to you, Jean-Claude (Trichet)!

  13. Byno commented on Jan 23

    Log charts wouldn’t add much, as the percentage decline is approximately the same for the three crashes from top to bottom.

    What I do take issue with is the idea that we are “due for a bounce.” Fat tails are fat for a reason, and once you move out past the third standard deviation (as we are now), all bets are off.

  14. Jim Haywood commented on Jan 23

    At the close on 16 Oct 1987, the Dow was off about 18% from its Aug. 1987 high, just before going over the waterfall on the next trading day.

    Today the S&P is off about 18% from its Oct. 2007 high. SMILE — maybe “it’s different this time”! It has to be; we’ve got circuit breakers to protect us now. Oh wait, but not after 2:30 p.m. *stamps foot in frustration*

  15. cinefoz commented on Jan 23

    These charts are sensational crap. The relative scale might be accurate, but they ARE EXTREMELY MISLEADING to the point of deceit, to put it charitably!

    Look at a long term log charts for 1987. Prior to the drop, you will see a massive stock surge that does not exist in 2007 or 2008. 2006 – 2007 is a small bubble by comparison. If you look at bottoms, you clearly see that the 1987 bottom is in line, more or less, with historical bottoms of the day. You also see a quick recovery to normal trend.

    The 1962 chart looks similar.

    I don’t have data for 1930, and I couldn’t possibly care less about financial history during the Great Depression and attempt to correlate that with today. Comparisons of today with 1930 are at best stupid, at worst manipulative and deceitful.

    Your perpetual happy dance at finally being right about a stock drop is making you look less credible after each post.

    ~~~

    BR: The Dow was off 18% prior to the crash in 1987.

    As I have noted REPEATEDLY over the past 2 years, I do not think the 1987 parallel is applicable to the present.

  16. E commented on Jan 23

    Pay attention to cinefoz, he’s an expert on lost credibility.

  17. KirkH commented on Jan 23

    CNBC summarized today:

    “Markets are well off their lows.”
    “Are we starting to form a bottom?”
    “Buy financials and big caps”

    Don’t feed the cinefoz

  18. cinefoz commented on Jan 23

    E,

    I may have bought in a week to early, but I still have a pile of cash waiting to go when it look safe. Regardless of my mistake last week, I will still make a bundle of money this year. You will still be a poser with nothing to offer.

  19. Estragon commented on Jan 23

    Cinefoz – “Comparisons of today with 1930 are at best stupid”

    Perhaps you’d care to pass that assessment on to Ben Bernanke. He apparently disagrees.

  20. Adam commented on Jan 23

    Seriously, cinefoz’s reasoning for why stocks are attractive is that “they have gone down too far.” Kind of like the people who in 2000 said that the Nasdaq at 4000 was a steal because it had dropped so much already.

  21. New Yorker commented on Jan 23

    Whatever rebuttal anyone cares to make to these comparitive charts, has to include the consideration that the fundamentals are so, so bad in general right now. It is surely too soon to be drawings parallels to those previous market collapses, but the overall climate right now is (quite) uniquely bad.

  22. cinefoz commented on Jan 23

    Barry,

    I’m leaving your blog now. I may return when it looks like the dumbass population has dropped and the smarter people have returned, if they ever do. If that is too severe a condition, staying away forever is ok, too.

    This used to be a decent place to read and write for. Some pretty smart people posted here. That is what attracted me. Now, all you seem to have is a majority of bathroom sink clogs leaving their uninformed opinions.

    Whst the hell happened to you?

    ~~~

    BR Since when did you get so bitter?

  23. jake commented on Jan 23

    sure picked the wrong week to stop sniffing glue

  24. wunsacon commented on Jan 23

    E, let’s not needle the minority voices here, please. Or else, we’ll turn them away. Or, worse, we’ll turn this into Yahoo.

    Especially because Cinefoz at least writes LOGICAL arguments.

    I’m sure many posters on this board recall reading bull arguments that we couldn’t begin to understand. By comparison, Cinefoz’s reasoned bullish posts are a breath of fresh air, even if many disagree with him.

  25. techy2468 commented on Jan 23

    cinefoz….

    if you really like being long, why not use some puts to protect against risk?

    i have seen that buying in the money call and selling out of money call, and then buying put, can still give you 5-10% profit. while limiting your risk to 5-10% loss?

    why be cocky and lose money? accept the fact that you may have called bottom a bit early (or maybe too early).

    if i was you i would wait another 10% drop before bottom dipping.

    in the favor of bulls: mortgage rates are falling, which may help housing. it may also help credit markets. atleast this looks like in the right direction.

    i expect something from congress in 2-3 weeks, they know it will be ugly if they dont act. (i dont have much expectations from politicians, but you never know)

  26. wunsacon commented on Jan 23

    Shit. I get distracted for one minute and Cinefoz already announces what I was afraid of.

  27. SINGER commented on Jan 23

    DUDE ITS A BLOG CALM DOWN :o(

  28. E commented on Jan 23

    Apologies, cinefoz, but you lobbed a softball there. I would’ve passed on it, but you were ripping the host’s credibility.

    That said, you and I are not far apart. I’m expecting some sort of buying opportunity in the near term, although I’ve made a bundle the past week shorting tech.

  29. scorpio commented on Jan 23

    some people just cant appreciate good porn charts: “i’d like to see it in log scale”, “i’d like to see it in time-scale”, “i’m leaving this site for better porn elsewhere”. sheesh. i just want to know, who’s the fluffer? is it Kudlow?

  30. anon commented on Jan 23

    If I remember my stats 101 correctly, it’s best to look at series in a log scale when the context of the series are different – in this case, the level of the index around the time of the drop (i.e. treating the 4 series as different populations). Any stats experts have an opinion?

  31. Ross commented on Jan 23

    Cinefoz come back! We hardly knew ye!

    I don’t disagree with your sometimes well reasoned positions. It’s just the tude, man.

  32. Pilgrim commented on Jan 23

    In response to cinefoz, I am an optimist who has become increasing pessimistic about the state of our economy over the past 3-4 years. It has become clear that the bottom 90% of citizens are making less now than in 2000 in real terms, while debt loads of individuals and government are staggering. We now live in a world where the mainstream press/CNBC view the fact that the world depends on the US consumer as a proud fact for the US. Most people are living beyond their means in a way that echoes the 1920s. It is not at all deceitful to look at the lessons of the 1920s and 1930s and consider whether things are better, or worse, today than in 1929.

    Further, it seems clear that the U.S. government is desperate to keep people spending money that they cannot afford- our government is now a cheerleader for consumerism and not for saving. No one can think that this structure can continue for the long term. Whether there is a crash now or in a year, two or three, there must be a consequence to the red balance sheets of Americans and the US Government. What is the plausible argument that the current economy can continue? Productivity? Wage increases? Return of manufacturing jobs? The only plausible argument, I think, is growth arising from US technological innovation, which is indeed strong but hardly enough when the jobs that manufacture most of these goods go offshore.

    This country is screwed.

  33. Vermont Trader.. commented on Jan 23

    Can you please post charts of the countless selloffs that didn’t turn into crashes?

  34. Stuart commented on Jan 23

    Voluntarily removing yourself from an anonymous moniker based blog….and announcing it.. whoa. Shrink the swollen head buddy.

  35. Ross commented on Jan 23

    Having lived through the 74 stagflation crash ( Dow down 50% ) I would offer that as a comparison. Markets fluctuated between 650 and 1000 for the next 8 years. They were good trading years. If you bought and held you lost 70% inflation adjusted.

    An old trader once told me “timing isn’t everything, it’s the ONLY thing.”

  36. gary commented on Jan 23

    Barry,
    Most of todays drop was due to the strong Yen. As of today the Yen has spiked about to the level I was expecting for this run. A pullback would allow the market a breather here. Maybe to rally back to the 1375 resistance level. BTW take a look at the Gold:XAU ratio.

  37. bluestatedon commented on Jan 23

    cinefoz, since I’m a newcomer to this stuff, I unashamedly admit to being a bathroom sink clog, leaving my uninformed opinions here. As such, I’m sure you’ve forgotten more about investing and the market than I’ll ever know.

    However, anytime I hear someone say “I couldn’t possibly care less about financial history during the Great Depression and attempt to correlate that with today,” I can’t avoid thinking of the old bromide about those who fail to learn from the mistakes of history.

    There are some fairly learned folks who think the parallels to 1929 are more than faint, and Robert Kuttner’s testimony to the House Committee on Financial Services last October is pretty interesting. It’s available over at the American Prospect website.

    I agree that the mere existence of parallels does not in any way guarantee an exact replay. This is not 1929, so whatever happens over the next year or two will be unique in our history.

  38. New Yorker commented on Jan 23

    For the first time in days NYSE advances are now ahead of declines. Both major indexes now green. Buyers (apparently that’s what cinefoz ran off to do) are in this thing now big time. Volume is frenetic at this point as the bargain hunters dive in while the selloff continues- may be another record day after yesterday’s 6.5 billion shares.

    IMO this is just a brief respite from a coninuted long slide.

  39. Peter Davis commented on Jan 23

    To address cinfeoz and John Borcher:

    1. Cinefoz – to argue that the period pre-1929 crash is irrelevant is dangerous. Both that time and today included periods of massive credit inflation brought upon by the massive printing of paper money. In the 1920’s, this excessive money supply growth resulted from the buildup in WWI, in which the European powers disregarded the gold standard and borrowed massive amounts of money from the U.S. This ultimately led to a massive credit bubble. We all know how that ended.

    Today, the gold standard has long been dead. Its equivalent died with the end of the Bretton Woods accords in 1973, when President Nixon officially removed the dollar peg to gold. Since that time, the world has experienced unprecedented credit and asset inflation which has resulted in an alarming number of systemic banking failures in developing nations. It may now be our turn.

    Bubbles – regardless of when they occur – are caused by same thing: mass euphoria and the ignorance of believing that “things are different this time”. Yes, the stock markets have not experienced the massive rise prior to previous crashes, but the non-exchange traded financial markets have. The U.S. housing bubble was unprecedented, as is its crash. The U.S. government and consumer debt bubble is likewise unprecedented as is the derivative bubble. Believe me, there’s a ton of excess out there. And excess begets corrections – even crashes.

    2. John, if we get a crash tomorrow, I don’t think that’s a gift for anyone trying to get long. Yes, stocks will be much lower-priced, but that doesn’t mean the market will suddenly turn around and head back up.

    Are we disconnected from reality? Of course we are! This is the market; it’s always disconnected from reality. Markets are neither rational nor efficient. They are moved by human emotional which, itself, is neither rational nor efficient.

    In my opinion, the idea that markets can only be disconnected from reality on the downside is ludicrous, yet is one that is trotted out after every selloff. How about on the upside? If this isn’t the case, then how does this explain the housing bubble, the credit bubble, the derivative bubble and every other bubble in human history?

    It is both the nature and history of human psychology that emotions are moved to extremes – both optimistically and negatively. Such extremes are what cause both bubbles and crashes. I would argue – and I believe that history bears this out – that extreme negativity (crashes) are always preceded by extreme optimism (manias).

    I have no problem with divergent opinions – I think it’s very healthy. However, I do believe that anyone who feels that this market is anywhere close to bottoming is dead wrong. Again, it’s not because my opinion is untouchable, but those who have continually argued for a bottom have yet to cite one historical example in which such a massive and broad-based selloff in just about every sector of the market has V-bottomed and rocketed back up.

    The idea that the market must rebound simply because it’s come down so far is, at best, dangerous. I think that the charts Barry’s posted of the 3 previous crashes starkly illustrates that “oversold” can become very oversold and “cheap” can become very cheap.

    I would caution everyone to be careful, to listen to what the market is telling you (not to what you want to happen) and to not get caught up in their own dogma – including myself. The market could care less what you and I want, and it could care less whether anyone believes it’s cheap or oversold. It’s neither right nor wrong. It simply is.

  40. Helicopter Ben commented on Jan 23

    You do you guys like that reversal? I did it just for Cinefoz. C’mon back, Cinefoz, and strut your stuff!

  41. dukeb commented on Jan 23

    Kind of funny being up 120pts at the moment when my watch list is full of greens and reds that would have me guess we’d be down 120pts at the moment. Either my watch list or the DJIA needs to crack.

  42. Jim Haywood commented on Jan 23

    Durn, look at it run up! cinefoz, you’re luckier than a two-dicked dog!

  43. Eric Davis commented on Jan 23

    Armageddon averted?

    I was just brushing up on my Revelations….

    “and behold a pale horse: and his name that sat on him was Death”

    Dismissing with Pettiness, arguments outside your paradigm…. it’s called Ignorance.

    sure Cinawft, doesn’t act his age(assuming it’s over 24).. unfortunately blogs bring out the childishness in many/all of us.

    More appropriate and adult like actions in the future, could be to just ignore people you take objection with(assuming you are going to respond in a “I’m rubber your glue” way.

    His early entry was lesson enough for the pain he took.

    To be honest it reflects more poorly on you, that it ever did on him.

    You boys are big kids, and if you find it appropriate behavior….
    “shine on you Crazy Diamond”

    Regardless of market action, I’m still super defensive.

    What I want, is to hear varied opinions on market action, and Themes on economics, and how each of us see it playing in our market.

    Which helps me make money… Because that is all I care about. but if we drive out reasonable(and even unreasonable) opinion, it’s a waist to be here. It’s also nice when we can get into some reasonable debate.

    I guess lecture over, and not like anyone gives a shit. I would prefer if this blog didn’t degrade into Flaming and overall Ass hat behavior(mine included).

    We get into these times, and with all the money involved we get very emotional, so it’s all very understandable. But trying to keep things reasonable would be… A welcome surprise.

    ” Each one of you is perfect the way you are and you can use a little improvement”
    -Shunryu Suzuki

    As Always, thank you all very much.

  44. kk commented on Jan 23

    Time to go light on the charts and maybe look at the fundies. When many good franchises have been wacked for 50%, it might be a good time to look at nornalized earnings, dividends, inventory etc, and compare the risk reward of taking investment positions here. The recent mo-mo dumb money is pukeing up the ag, pricey tech, and energy. I say it was long overdue, and sets up those stocks killed 6 months ago as good risk/reward investments. I believe the emerging markets will roll over hard as the dumb etf and mutual fund “allocators” have piled in without understanding the inherent risks built in those markets. The natural resource sector has the same feel as the emerging. I am sick of the China & India thesis on demand justifying the parobolic moves. BS to that. Time for Jimmy Rogers to become irrelevant again.

    Why isn’t anybody looking at the crazy valuation of the ten yr treasury? 3.35%? I don’t get it.

    BTW, I think that the RTC/S&L will prove to be a bigger risk to our banking system than todays mess.

  45. michael schumacher commented on Jan 23

    Time to begin re-loading……

    Make it fun I guess

    Ciao
    MS

  46. MarkTX commented on Jan 23

    As someone questioned out loud yesterday,

    was it just yesterday??????

    700 point rally anyone….

    think the fed when now raise interest rates 3/4 of a percent.

    I thought so……….

  47. michael schumacher commented on Jan 23

    I await with baited breath the ACTUAL reason for this…….

    It is utterly ridiculous…….

    Thanks for the pop to reload though…..was starting to think that we were going to go down forever…

    Ciao
    MS

  48. WTF commented on Jan 23

    500 point rally on 2 to 1 upside volume? WTF? Sumpin aint rite.

  49. The Financial Philosopher commented on Jan 23

    I could not resist the exchange between Cinefoz and everyone else…

    Truth be told, it is not difficult to make an intelligent argument about something that is unknown or not absolutely foreseeable because no one can be absolutely proven to be wrong… at least, at the moment. The only challenge is presenting the unknowable in a knowledgable way, which is, like I said, not too difficult. Just turn on the TV and you’ll see…

    I see compelling arguments everyday from the Bull side and the Bear side – primarily because each side represents a logical presentation of what the future may or may not hold, based upon the past.

    Taken a step further, I’ve seen compelling arguments on both sides of some quite contentious issues: There is a God vs. there is not a God; that global warming is man-made vs. global warming is not man-made; that we are better off without Saddam vs. we should have stayed out of Iraq; and the list goes on. The common thread among those three is that we may never know the absolute truth as long as we live…

    At the risk of turning the angst toward me, I must say that the true “fools” are those who present ideas in the form of statements rather than in the form of questions as if they know the unknowable.

    Remember that knowledge is power but knowledge is not wisdom and that there is no “winner” in an argument just as there can be no “winner” in a war…

    BR, at the core, is a philosopher. He is classic Socrates: He asks questions that encourage his followers (the readers) to answer the questions for themselves and he establishes ideas with logic and critical reasoning (which may often be mistaken for blind arrogance).

    One last thing. Isn’t this really all entertainment? If everyone here really takes money this seriously, then I may be in the wrong place as well…

    “There is only one side to the stock market; and it is not the bull side or the bear side, but the right side.” ~ Jesse Livermore

    β€œHe who establishes his argument by noise and command shows that his reason is weak.” ~ Michel de Montaigne

    Cheers to all…

  50. MarkTX commented on Jan 23

    MS,

    the only “reason” in my (little black) book

    Think of the old Outer Limits TV show….

    They control the vertical…..

  51. Eric Davis commented on Jan 23

    Peter, buddy.

    you are right, v bottoms like this aren’t bottom. More likely a near term low… I know nothing about bottoms, I’m just looking for turns. If you read some stuff that uncle Ben has written, he reminded me about what he calls “A Market flashing a Red light.” and trying to wake up the powers that be, to get them into action.

    I believe this is what has happened.
    All I know it that the market will run out of buyers, and we will come back down(assuming it’s not tomorrow). The question is When?

    cheers.

  52. michael schumacher commented on Jan 23

    This has GOT to be about the monolines getting some sort of bailout package.

    How the whole market gets pushed up because we are socializing them……….is what is wrong with the whole market.

    It will pass along with the boner the market got with bailout talk…..AGAIN.

    Ciao
    MS

  53. red95king commented on Jan 23

    Throw away the 1930 chart. The other three show textbook distribution tops.

  54. Cherry commented on Jan 23

    The market is a retard. They completely didn’t get it. If anything, they should have gone the otherway.

    Good thing I predicted the bounce. No more “orderly” structures either, the flop down from this will be just as hard.

  55. Estragon commented on Jan 23

    MS,

    Maybe COF will tell us it’s all good tonight. Booking lots of overlimit charges, accrued interest through the roof. What’s not to like πŸ˜‰

  56. kk commented on Jan 23

    Eric,

    Did you also look for the market to run out of sellers, or are you just a short side guy?

  57. E commented on Jan 23

    Might be a good opportunity to get some SKF at the bell. The Financials are rallying on some kind of rumor unbeknownst to me.

  58. george jones commented on Jan 23

    What is the sampling error rate in a sample size of 3?

    ~~~

    BR: Enormous !

  59. Vermont Trader.. commented on Jan 23

    Whoops, I guess someone at Goldman pushed the “market up” button.

    MS – you gave me shit this morning for expressing my opinions and you were wrong.

    Maybe the market will crash for you tomorrow.

  60. MarkTX commented on Jan 23

    What is really amazing to me over the last
    2 years…..

    The afternoon rally seems to always break downtrend lines in quick and sharp fashion.

    (I am commenting on price action only, not who is invovled)

    I guess we will now see huge overseas buying
    and a Huge gap up tomorrow.

    rinse, repeat…..(that would be my comment on who is involved)

    good luck to all….

  61. Brit commented on Jan 23

    Nice call BR. Next time we have a crappy open please post more of your shitty charts to give us another 600 point intraday reversal.

    ~~~

    BR: So these charts — but not any of the 5000 others — are the ones that caused the reversal? (Who knew I had such power!)

    And the specific bounce discussion is ignored? What about the CNBC call? Down 75, on the way to down 300 — that “We are very close to a tradeable low, and a 8/10/12% rally?

    Geez, you guys cherry pick what you want.

    I’ll have to post what we sent to clients earlier today —

  62. Rob commented on Jan 23

    These charts are not approrpiate for the current economic conditions. Bears make everything worse then it is. Go Soros and Faber, you anti-US pigs.

    I wrote about V shape recovery today at 2 pm, because I knew we are going to have one, however, this might have been the bottom at least for the near term. In God we trust and the US will still rule.

    Rob

    ~~~

    BR: Three cheers for the red, white & blue!

  63. Cherry commented on Jan 23

    This should last untill about March, probably peek about back up to 13500.

    Then comes the abyss in March/April when the debt crisis has not abated, RE is still tanking and CRE had now joined in.

    Take some time off and relax. Things will unwind quickly back to 12,000 then a crash down to 9,000 by June. NBER should declare a recession in Q2 which will also be when CRE craters interestly.

  64. F commented on Jan 23

    Cinefoz , come back , who else can joust with that perpetual (just ask him ) genius MS

  65. Pool Shark commented on Jan 23

    Gary,

    Amen! Earlier today I was shocked to see it hit 5.26!

    With the ISM Index currently below 50, and a noted gold turndate at the end of the month, the first two weeks of February should be liftoff time for gold stocks!

  66. jag commented on Jan 23

    What about the rumor that Bear Stearns will be bought?

  67. donna commented on Jan 23

    Oh, come on, Fidelity doesn’t want to send us another statement saying how many thousands of dollars we lost this month, they’re going to CYA like crazy in these markets.

    There are plenty of BIG investors who do not want to disappoint their investors. They will protect this market (and their big bonuses) like crazy for as long as they possibly can.

  68. kk commented on Jan 23

    good time to buy equities when the ISM is below 50.

  69. v commented on Jan 23

    MS – Yeah, banks rallied big time. It’s clearly on the monoline bond insurers talk. Problem is that they haven’t mentioned where the money is coming from. I guess bail-out, but if it is indeed taxpayer, there’s going to be some backlash? Press reports say NY Ins Dept is just “in talks” with banks about injecting capital in monolines. I have no idea where they are going to get that capital to inject. And in any case, this helps out the monolines (clearly) and the munis who are in debt. But, still seems this only prolongs the inevitable (and ongoing) credit hit the Big Banks are going to take.

    Makes some sense though, market was itching for a rally, just needed the right “news” – lol.

    Coming bad earnings/news should reverse this.

    As always your thoughts fellow TBP commentators?

  70. Pat Gorup commented on Jan 23

    “We are getting to a point where markets are oversold, and due to bounce.”

    Got a bounce, alot of it short covering. Olick said refi apps are up 92% since November. I wonder after yesterday’s cut and next week’s cut how much they’ll be up. Yep, got to keep those consumers flush with cash so they can keep spending and prop up the world’s markets.

  71. michael schumacher commented on Jan 23

    Vermont-

    If “giving you shit” (your words not mine) is akin to making you aware of why the market did not tank yesterday (oh try that rate cut about 40 minutes before the start) then I guess I am guilty of spreading it around.

    If you are going to be that simplistic about an event that backstopped the market BEFORE it’s even open then I guess nothing I , or anyone else FTM can say to make you feel like you are not “getting shit”

    Try thicker skin….it works

    Ciao
    MS

  72. v commented on Jan 23

    PS – COF missed; shocking! Let’s see what happens after hours.

    And eBay; guess Whitman left, technically speaking, on a high note.

    Not saying the short term rally will simply dissolve, but things like the above don’t say it’s going to last. IMO at least.

  73. Eric Davis commented on Jan 23

    I try and swing trade the larger moves… Short till we looked like we could be hitting near term bottom,then go to cash.

    Day trade (both sides) till we start setting higher highs and lower lows.(defensive)

    You can’t catch the top or the bottom, it’s the in between that makes you money.

    As much as I hate this economy, or think that politicians are dumb, or doing the wrong thing…. None of that matters, and doesn’t make me money. It has never in my life paid me to be right, in-fact the opposite is the trend.

    I’m as A-moral as the market I trade.

    I have called my congressman and senators though πŸ™‚ our legislature is working overtime as we speak.

    I guess I could be a huge believer in lieze fair(it’s just and opinion BR, hopefully you know the love.) capitalism. But I’d, live and look like a pauper and just get long the guillotine.
    “It was the best of times, it was the worst of times….”

    as it’s been said in here numerous times, I expect this market to kick the hell out of everyone. over the length of the bear.

    and maybe it’s all luck…

    I’m frequently wrong, and plan for it.

    and I’m not saying we won’t suddenly reverse and crash…. That NFP next week is a hot number.

  74. kk commented on Jan 23

    V,
    COF down 50% from it’s high, EBAY down 35% from it’s high. There is so much bad news already priced into the stocks, that it doesn’t matter. The Fed just helped out COF in a way that won’t show up in today’s conference call, but it should be on your radar. The Fed threw a mojor bone to the financials yesterday, and assured survival and reliquified the consumer.

    I would look at 1987, 1990 & 1998 as a proxy for this market, not 2000-2002, as that recession was caused by stock market speculation, and further fueled by 9/11.

  75. Vt commented on Jan 23

    Don’t take it personal MS

  76. Vermont Trader.. commented on Jan 23

    Knowing when to admit you are wrong is one of the most important skills a trader can have.

    Sorry to touch a nerve.

  77. PFT commented on Jan 23

    Of course, with the PPT having been established after 1987, charts from 1987 and earlier are probably not very predictive.

    I read somewhere that 50% of the trades being executed in London and the US originated from Cayman Islands and other tax havens who are selling shares they do not own, and often do not even borrow (naked short selling). If true, the markets are just casinos that do not trade on fundamentals, and the house (insiders-market makers) always wins more than they lose.

    In any event the so called fundamentals are based on economic indicators that are misleading at best, fraudulent at worst.

    Today the PPT may have induced a short squeeze. Tommorrow, who knows. Just roll the dice. But there is still a lot of funny money out there floating around, where is it going? Has to go somewhere. Another bubble has to form to cover up the losses from the housing bubble.

    We are after all a bubbles economy. Bubbles here(pop), bubbles there (pop), bubbles everywhere ( pop,pop,pop ). US stocks look cheap, especially to foreigners. Stock bubble warning in effect?

    Or will they just subject us to increasing volatility, where they make money on the upswing and downswings, because they know the bottoms and the highs. In either event, the dice is loaded, the cards are marked, enjoy the game. But please, leave your fundamentals at home.

  78. Eric Davis commented on Jan 23

    someone sort of asked about news… My opinion is that it’s rare for an event to make the market change it’s overall momentum.

    What it does to is increase or decrease the momentum of the current move.

    Or, roughly change the number of buyers or sellers… which does the same thing.

    most of the “market moving news” is either noise or anthropomorphising.

    ie…the mono-line news.. made us go up 300 instead of 250.. or something….

    but WFT do I know, it’s all astrology

  79. Winston Munn commented on Jan 23

    Regardless of charts, one of the tells that has preceded prvious crashes was increasing intraday volitility that led to market instability – shorter and shorter compression of the time of the swings.

  80. MDDwave commented on Jan 23

    From my estimates, the S&P500 has been falling at a rate of around -150% on a annualized basis for the last 20 trading days. On the longer term (80 days), it has been falling around -40%. Obviously the short term -150% can’t be sustained, so one would expect a rally. The longer term should be negative until a realistic earnings estimate can be determned.

  81. Eclectic commented on Jan 23

    Cinefoz,

    Willfulness for its own sake is a mindset that can not withstand a logical challenge.

  82. kk commented on Jan 24

    “I would caution everyone to be careful, to listen to what the market is telling you”

    It’s telling me to buy oversold cheap US based companies with brutal 6 month charts, good dividend yields with coverage, lots of free cash flow, with 15 year low P.E.’s (with the forward E being safe), with great franchise values. Currently there is no shortage of these names.

  83. badhaikuguy commented on Jan 24

    Levity is best
    Market Hi-jinx are no fun
    Laugh until you cry

  84. jombi commented on Jan 25

    If the market was telling you that its probably because it was hoping for a good deal of buyers to dump its shares off to. Held my shorts all the way through this nightmare. I look forward to reality taking a nice ride home next week.

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