eeemak's Blog Posts on People And Picks

Market Trend

Thu, 07 May 2009 07:42:18

The long term trends may be intact, but the short term challenges remain the biggest concern and risk to the resumption of normal trend growth. Global Depression II may have been avoided, but there seems little cause for celebration yet. The limited green shoots that have been spotted are real enough, but they do not change the big issues faced by the real economy.
The return of some confidence, plenty of liquidity, good values, and sufficient time wallowing in misery are simply not enough to turn the corner. They are the triumph of hope and cash over fundamentals, as is the recent rally in the markets. Fundamentals, particularly when banks are down, always win in crises. The light at the end of the tunnel will only be turned on when the banking sector is fixed and cleaned of its toxic waste, ready to play its critical intermediary role again between borrower and saver. This depends on the Obama administration and the US treasury getting its act together to fix their badly flawed bank rescue plan. More fiscal stimulus ammunition will then be needed, but the banks are the trickiest part....

Scary again

Mon, 20 Apr 2009 10:26:34

This is a scary market, all efforts of Obamas administration are in the table, but it is too early to extract any good news yet, all numbers are down, unemployment is a big trouble, in California and North Carolina it's reached the highest in three decades, 11.2 and 10.8 percent, respectively, MI has 12.6% of its residents out of work, Oregon has 12.1% etc. GM draws to Ch. 11, earning of 1 cent better than expected is ridiculous, etc. Market will pull back sharply to DOW 7769 and S&P 500 789 in a short time....

Rally Trap

Thu, 16 Apr 2009 07:31:38

The economy is getting weaker, the correction is taking place in bear market rally, the stock goes 25% up high of lower high and from this morning since GGP (the largest real estate mall) goes to bankruptcy there is less hope for more rally.
This is a summary from Beige Book: The Federal Reserve's Beige Book reported overall economic activity either contracted or remained weak. However, "five of the twelve Districts noted a moderation in the pace of decline, and several saw signs that activity in some sectors was stabilizing at a low level." The overall takeaway is that the economy is getting worse, but more slowly....