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Post by jeffolie on Oct 13, 2007 10:59:57 GMT -6
Give me your guess.
The 2 market gurus that I follow and that have been most accurate are Bart at nowandfutures.com/forecast and calfurta.com.
Both are bullish for the next months.
Bart who has a massive site is predicting about 18,000 by March.
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Post by graybeard on Oct 13, 2007 13:46:16 GMT -6
I expect it to keep pace with inflation, at best - stagnant or down in real dollars.
GB
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Post by blueneck on Oct 13, 2007 13:59:52 GMT -6
And it will continue with its total disconnect with reality
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Post by unlawflcombatnt on Oct 13, 2007 17:34:28 GMT -6
"bullish for the next months...." I'd say maybe, at best, for 2 months of bullish-ness. ?"18,000"? I'd say not a snowflake's chance in hell. The leveraged buyout boom, one of the biggest growth factors during the past year, has come to almost a complete halt. Not only is the credit crunch not over-- it's just beginning. The availability of borrowed money needed to pump up the DJI is shrinking, not expanding. Banks are being forced to put more of their off-balance-sheet debts back on to their balance sheets--reducing their capital reserves--reducing their ability to make new loans. Home equity extraction is declining rapidly, reducing it as a source of stock market investment. Increased credit card spending has offset some of the decline in spending financed by home equity extraction. But this source cannot be maintained, and once exhausted it will lead to sell-off of assets to cover debt. At least some of this sell-off will come from stock sales. In addition, there's a small, but growing trend of 401K/IRA withdrawals by cash-strapped consumers. This will put further downward pressure on the DJI. And let's not forget that the DJI increased over 400 points in just the few business hours following the Fed's rate cut announcement on September 18th at 2 PM. The DJI was 14,403 on opening September 18, 2007. It was over 14,820 by mid-day on September 19th. It seems reasonable to assume that at least 400 points of the Dow Jones value resulted from just the psychological effect of the Fed cut (since there hadn't been enough time for any increased credit availability in the next several hours.) Below are 2 graphs of the DJI changes surrounding the Fed's rate cut. The top shows the 5-day period including September 18th. The bottom shows the 1-day change on September 18th by itself. Key numbers are underlined in red. There are red lines in the top graph showing the pre-Fed cut low, and the post-Fed cut high. Other than the delusional optimism of many investors, there's nothing to even maintain current DJI levels, much less cause a rise to 18,000. "18,000" is beyond just "irrational" exuberance. It's "psychotic" exuberance. It's based exclusively on wishful thinking, and completely unencumbered by reality (or sanity). There aren't enough rich "delusionaries" to push the DJI up to 15,000, much less 18,000. The rich didn't become wealthy from "faith-based" investments. They did so through "smart" investments. And the DJI is no longer a smart investment.
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Post by jeffolie on Oct 13, 2007 17:56:47 GMT -6
"It's "psychotic" exuberance. It's based exclusively on wishful thinking, and completely unencumbered by reality (or sanity). There aren't enough rich "delusionaries" to push the DJI up to 15,000, much less 18,000. The rich didn't become wealthy from "faith-based" investments. They did so through "smart" investments. And the DJI is no longer a smart investment. " It is well documented the there is a 'madness' of crowds when it comes to investing. Amazon.com Why do otherwise intelligent individuals form seething masses of idiocy when they engage in collective action? Why do financially sensible people jump lemming-like into hare-brained speculative frenzies--only to jump broker-like out of windows when their fantasies dissolve? We may think that the Great Crash of 1929, junk bonds of the '80s, and over-valued high-tech stocks of the '90s are peculiarly 20th century aberrations, but Mackay's classic--first published in 1841--shows that the madness and confusion of crowds knows no limits, and has no temporal bounds. These are extraordinarily illuminating,and, unfortunately, entertaining tales of chicanery, greed and naivete. Essential reading for any student of human nature or the transmission of ideas. In fact, cases such as Tulipomania in 1624--when Tulip bulbs traded at a higher price than gold--suggest the existence of what I would dub "Mackay's Law of Mass Action:" when it comes to the effect of social behavior on the intelligence of individuals, 1+1 is often less than 2, and sometimes considerably less than 0. www.amazon.com/Extraordinary-Popular-Delusions-Madness-Crowds/dp/051788433X
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Post by jeffolie on Oct 15, 2007 10:18:10 GMT -6
Part I: The Blow-Up November/December (Bryant Urstadt - MIT Technology Review) The conclusion? Housing prices are going to decline 20% or more, far below the levels assumed in the models used by Wall Street firms. A sudden re-pricing of many SIVs is certain. Our friend noted a few ashen faces drained of blood as the PowerPoint slides were presented by Lachman, Makin, and others. If more financial market Armageddon is coming, why is the stock market rallying? Simple. As we have heard from multiple credible sources, fund managers, who control 50% of the capital on Wall Street, are trying to ramp it through the end of October to make year end bonuses. Several we've talked to, off-the-record, have told us that they feel that this is The Last Hurrah for this market cycle. Pocket the money while you can. Come November and December, positions will be closed out. www.itulip.com/forums/showthread.php?p=17726#post17726
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