tag:blogger.com,1999:blog-6630104052002496191.post6968964557101060304..comments2024-02-25T08:33:45.942+00:00Comments on Reality Lenses: My View on the Markets and the Economypejhttp://www.blogger.com/profile/10958133367017526690noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-6630104052002496191.post-64879959643394542452011-07-24T17:54:34.104+01:002011-07-24T17:54:34.104+01:00I think ultimately, the real bottom will be hit wh...I think ultimately, the real bottom will be hit when markets have dropped between 80 and 90% from their all time highs. This doesn't mean it will happen in one straight move, it will take many years, specially with the likes of The Bernank and his fellow central planners around the world.<br /><br />One thing that you don't realize, is that the bernank only monetizes new or old debt that is fully backed the US government. There's a limit to what he can do, and he has probably reached it on the short term. On the medium term, he will have the backing and support for more printing only when the next major leg down has occurred. This means that he will always be too late, too slow.<br /><br />Moreover, there are other road blocks they will face:<br />- the current debt ceiling masquerade is showing<br />- the threats from other central banks and investors in treasuries<br />- the public opinion and actions of libertarians like Ron Paulpejhttps://www.blogger.com/profile/10958133367017526690noreply@blogger.comtag:blogger.com,1999:blog-6630104052002496191.post-54439270423777134252011-07-14T04:48:59.485+01:002011-07-14T04:48:59.485+01:00When I look at world equity indices, it looks as i...When I look at world equity indices, it looks as if we are close to some type of a major correction or a even bear market.<br /><br />Here in Australia, the ASX 200 is looking very weak. While Japan is looking better than most, KOSPI in Korea has recently failed to make a new high. Korea is highly leveraged to China, so this is not a good sign. Hong Kong continues to look weak, failing to hold that 22,000 level. Nifty 50 in India is also looking weak with the support at 5,200 holding so far, but the market is failing to make any new highs since November 2010.<br /><br />In Euroland, CAC 40 in France and even FTSE 100 or DAX 40 from England and Germany are starting to look very heavy. Bulls are failing to make any new highs and the supports are barley holding. MIB in Italy has recently crashed through the primary support, but managed to barley rally above it. <br /><br />In the US, the S&P 500 continues to outperform Emerging Markets and Europe. Usually this happens at the last leg of the bull market. <br /><br />Equity markets might soon drop of 10%, 20% or more. But I don't think we will drop 70% or 90% or some crazy figures you talk about. Bernanke has stated last night that he will print more money if and when this occurs. <br /><br />I'm not selling my commodities however, because just like in 2008, commodities kept going higher while stocks went lower! I agree that eventually even commodities might correct lower, with Crude Oil falling below $90, Silver below $33, Corn back to $5.00 a bushel and Gold definitely correcting as its very overbought, lets not forget that commodities are in a secular bull, and after the down-leg they will go higher again. (I dunno what targets, I'm just picking random numbers lower than today) <br /><br />So you should buy more commodities because Bernanke will print more money and debts will get even higher! They will not default, but just inflate... I'm not overly optimistic about stocks in inflation so that is why I invest in commodities, but as I keep saying all the time, when it comes choosing between to cash, bonds and stocks, as a fund managers I rather be a pessimist on bonds or cash!Tihohttps://www.blogger.com/profile/10336666083094327126noreply@blogger.com