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This got to be one of the most ridiculous rallies ever

June 16th, 2010 · 9 Comments

Everything is down except the markets… (updated)

It makes no sense:

And we haven’t even mentioned Europe. The IMF is in Greece and Spain. The interbank market is freezing. There are talks of a 250B rescue package for Spain, which is in an absolutely dire strait and nobody wants to lend it’s banks anymore. It looks ever more likely to be the next domino to fall. The euro is climbing, a supposed sign of confidence, but it’s actually bad for Europe.

In China, wages are growing at 30% and workers are flexing their muscles, inflation is on the rise already, soon the central bank will have to embark on tougher measures to dampen the inflation. We haven’t even mentioned the heady real-estate prices or what’s on the banks books there.

In the meantime, Matt Simmons thinks BP is leaking 120,000 barrels a day into the Gulf…

When will the economic fall-out of this start to show up into US statistics? Can’t be long..

All of this is pointing towards slower growth and deflation. And we all know what that does to public finances and private debts…

Enjoy the ride, it won’t last..

Tags: The Markets

9 responses so far ↓

  • 1 satchmo // Jun 16, 2010 at 8:04 pm

    More Peak data to fold in with Simmons take on the GOM:

    And fast forward to 13:30 to hear the question: “Is the Gulf of Mexico Oil spill what Peak Oil looks like?”

  • 2 kencooksam // Jun 17, 2010 at 12:40 pm

    The markets will find a way to confuse the most persons possible.Cause the most persons to lose the most money.Thats history.
    That said I like US large cap Mega Caps divi payers with International operations in Asia. Like JNJ and PG and MLP’s like LINE and Canada Energy trusts like BTE , CPG,PWE and Mortgage stocks like ANH, and trade AGNC all seem okay.
    I also own SDRL,FRO and been adding XOM.
    CTL seems okay.Nice divi.Telecom.
    IOC will move on news. Suffer without it.I take it stock by stock, sector by sector.Don’t buy the indexes. Or hedge them.
    In 1987 when the dow blew up 20% of the stocks went up that day.I was there I know.

  • 3 admin // Jun 17, 2010 at 4:22 pm

    Well Ken, we’re not confused anymore. Read the “Meantime in the US..” link especially. And now jobless claims disappoint, leading indicators tank again, and most unhelpful of all, prices are falling which really is the one thing one doesn’t want when the economy is deleveraging and trying to clean-up balance sheets loaden with debt.

  • 4 kencooksam // Jun 18, 2010 at 1:31 pm

    The point is can a person retired pay their bills with a money market account or a CD??Most would answer no they can not.
    Therefore is there a place where one can invest and not lose your principal while trying to collect a coupon??My point about 1987 was yes there is always a place attracting capital.
    The trick is can you properly identify those places and be nimble enough to roll as needed from one investment type to another.Never easy.
    I identified places I have invested in and done quite well.
    This is a snapshot in time and it changes.Its stock by stock and sector by sector. Not an absolute in or out thingie.
    Bonds are not the answer as we have to raise rates in the future.Rates are low and must go higher.One can always hold a bond to maturity of course.
    Its a difficult place investors are in with no clear cut answers.
    Being completely out is a luxury most investors can not afford.With that said where should one be invested today???.Assuming you need monthly income??

  • 5 Warrenk // Jun 18, 2010 at 2:50 pm

    Well, it’s not too much to say that the current economic situation is in dire status. IMHO, that’s why every investor has to be waken up with all the given condition because there are so many investment tools people could imply whenever they notice its dirction. Simply speaking, investors need not to be too pesimistic nor optimistic. As we know, John Paulson and its gangsters made a fortune at the time of CDO crisis with CDS bet. But it’s also universal truth nobody can be right all the time. Maybe that’s why we, investors try to share their opinion to acknowledge the direction of economic status. Now, regarding to the current economic situation vs. stock market, the market is already absorbing most of the critical data and fully implying them into share price. The noticeable difference between them, as you pointed out, could be caused by the difference between long-term and short-term investment view, I believe.

  • 6 admin // Jun 18, 2010 at 4:47 pm

    Well, yes, perhaps. We see a case for individual stocks, but really not for the overall market. How long it can ignore all the bad news is difficult to say, but not for very long, we think.

    It just seems to trade off the currency markets, so watch out for any renewed euro weakness.

  • 7 oilman // Jun 18, 2010 at 9:16 pm

    put your money in oil/gas wells. I’d rather have oil money than in stocks or a saving account..

    Come on IOC with the DSTs.. Im ready to find out what the word “special” means when describing the upcomming meeting on June 22nd…..lets here something exciting

  • 8 ioc4ever // Jun 22, 2010 at 6:14 pm

    Great news on the DST. If only the market undertand what that actually means. Just like the Prelim Mitsui deal that was up on pretrade then smacked down. With all do respect… the market is a moron, understand what we have here ladies and gentleman. once in commercial production you will wish you could go back the the $50 share price days and grab MUCH MUCH more…….be patience all the Longs good things to come in the future. Way to go IOC and the managment.

  • 9 Greg // Jun 29, 2010 at 12:35 am

    Overall market is bearish. IOC is still considered high risk due to their capital requirements needs. Lastly, they have been slow to monetize even in the opinion of major bulls. I see IOC trading as low as $40 until major deals are announced.