Ambrose Evans-Pritchard, the resident Doomsayer at The Telegraph, joins the chorus of bears in arguing that the stunning rally in stocks from their early March lows is a fake.
He says to enjoy it now, but expect to take a sucker punch:
"Prolonged suckers' rallies tend to be especially vicious as they force everyone back into the market before cruelly dashing them on the rocks of despair yet again," he said. Genuine bottoms tend to be "quiet affairs", carved slowly in a fog of investor gloom.
Another sign of fakery – apart from the implausible 'V' shape – is the "dash for trash" in this rally. The mostly heavily shorted stocks are up 70pc: the least shorted are up 21pc. Stocks with bad fundamentals in SocGen's model (Anheuser-Busch, Cairn Energy, Ericsson) are up 60pc: the best are up 30pc.
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Keep an eye on the upward creep in yields on the 10-year US Treasury, the benchmark price of world credit. This alone threatens to short-circuit the rally. The yield reached 3.3pc last week, up over 1pc since January and above the level in March when the US Federal Reserve first launched its buying blitz to pull rates down. Bond vigilantes are taunting the Bank of England in much the same way, driving the 10-year gilt yield to 3.73pc.
The happy view is that this tightening of the bond markets is proof of recovery fever, but there is a dark side.
Governments need to raise $6 trillion (£4 trillion) this year to fund bail-outs and deficits, led by this abject isle with needs of 13.8pc of GDP (EU figures). China fired a warning shot last week, saying the West risks setting off "inflation for the whole world" by printing money. It hinted at a bond crisis.
Read the whole thing at The Telegraph --> Here
The real problem for the bulls is that the world faces real structural problems now that can't simply be solved by modest GDP growth. We keep going back to California, but it's instructive. To operate, the state needs the kind of revenue that can only be produced during a bubble (like the .com one, or the housing boom). Modest growth just isn't good enough. Given the gigantic debt overhang facing both US consumers and the government, that's basically the situation we're looking at. When you look at our shortfalls in so many areas, it just doesn't look like a modest resumption of growth will do the trick this time.
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Only the ones left. We bailed last year as this awful scenario was in full view for anyone with enough sense to see it.
ReplyDeleteMaybe you should do it yourself, Mr Big Pants.
ReplyDeleteMexicans add a certain humbleness to a country already maxed out on stupidity.
You didn't listen.
ReplyDeleteI didn't say they didn't have good qualities. By and large though, Mexican illegal immigrants are trashing the US wage base. We don't need anymore of that. I'm not against Mexicans in general or other immigrants, but illegal immigration is illegal and there's some pretty damn good reasons for it.
Don't distort the issue.
We will be one country/union with Canada/Mexico in the not too distant future so arguing over whether Mexicans should be allowed in our not is useless. NAU is no myth. When the US collapses economically we will be open to every option in desperation.
ReplyDeleteYou're the one distorting the issue, actually. I said from one perspective Mexicans coming in to America add a certain amount of humbleness to the mix of American stupidity - that's it. Sorry, but law is not a moral issue. Just because it is legal to spy on Americans doesn't make it right. I find it amusing that you judge all immigrants moving to California idiots. You're the same kind of person that would have judged homeless Jews or Gypsies en masse during Hitler's rein, no doubt.
ReplyDeleteI like eggs on Tuesdays.
ReplyDeleteGuys guys , can we just all be friendly with everyone , jesus , this why we are in the mess we are in , can't we just have a grown up conversation adn converse instead of spamming evryones ideas , i know many people are dumbshits and are very stupid , how bout we just try and enlighten them
ReplyDeleteLaw is not a moral issue...now I have heard it all. What do you think laws are based on?
ReplyDeleteAnd then you go on to make assertions about what you THINK I would think about homeless Jews or Gypsies, and still you claim I AM the one distorting the issue.
Remember what you said here:
"Oh well, most of the people in California are idiots anyway."
Better get off your high horse, you made the exact type of statement I did!
For the record, laws are supposed to be based on moral issues. Illegal immigration is like entering someone's property and then squatting there. Were you invited? if not, then it's illegal, because it's basically theft.
ReplyDelete"Law is not a moral issue...now I have heard it all. What do you think laws are based on?"
ReplyDeleteLaws are decisions made by a small group of human beings used to apply to a large group of human beings. They imply only a relative morality, which is often times but hypocrisy. Such morality is opinion, or quite simply as a tool. In other words, law does not equal RIGHT just because it is. Understood?
"And then you go on to make assertions about what you THINK I would think about homeless Jews or Gypsies, and still you claim I AM the one distorting the issue."
Based on your comments, yes.
"Remember what you said here:
"Oh well, most of the people in California are idiots anyway."
Better get off your high horse, you made the exact type of statement I did!"
Not the exact type of statement, no. But I was also not entirely serious about it so much as I was using hyperbole.
You on the other hand admit to being an over-generalizing xenophobe.
"For the record, laws are supposed to be based on moral issues."
"Supposed to be based on" does not mean they are moral.
"Illegal immigration is like entering someone's property and then squatting there. Were you invited? if not, then it's illegal, because it's basically theft."
No, it isn't. No one owns the water, the air, or the land of part or entire continents. Governments merely claim it as theirs. Again a small group of people consenting with one another about an idea.
or ideas, and populations, some of which agree and some who don't, who are enforced to abide by the laws (notions) of the law makers (opinionated old white men with power).
ReplyDeleteIt is sad to say, but as a supervisor of 80 employees. 60 of them did not belong. They are the hardest workers I have ever had.
ReplyDeleteWe all better help each other out, before it is to late. How far in Debt do you think we can get. Only a matter of time before the whole house of cards fall.
Yes, the stock market is up. Have you ever seen some one old before thay die? They start to go down hill fast. Then for a day they seem to turn around. Then bam they are gone. Guess what folks, This small bull market that you see.........hang on to your hats.
So basically you take the nonsense argument that "people aren't illegal" as your own.
ReplyDeleteWow, I guess all those governments who claim to have, you know, national sovereignty and borders and such -- they are all completely wrong, and you have all the answers, no? Are borders meaningless? Is national sovereignty, culture, and national identity non-existent? Regardless of what you may think of the law, these things actually matter to people and are worth protecting.
So does the concept of private property. Many people have had their property trashed by illegals on their way through from Mexico. Google it.
"Not the exact type of statement, no. But I was also not entirely serious about it so much as I was using hyperbole. "
Wow that's nothing but a chickenshit cop-out. Hyperbole? Try hypocrisy.
I think you are just barely starting to catch on. Yes, borders are meaningless, light bulb.
ReplyDeleteAre culture and national identity non-existent? Well that is a moronic question. The better question to ask is is it wise to allow culture limit you as a defining princicple? Is national identity really that important? If it is then perhaps you would fit better in a nationalistic form of government. Your national fervor, intolerance and bitterness seems to prescribe it.
"It is sad to say, but as a supervisor of 80 employees. 60 of them did not belong. They are the hardest workers I have ever had.
ReplyDeleteWe all better help each other out, before it is to late. How far in Debt do you think we can get. Only a matter of time before the whole house of cards fall."
That is the attitude more of us will need to have. When it reaches the point that governments break down and/or food and energy becomes scarce, we will have to be working together rather than against one another. Where you were born won't really matter when it comes to trading a case of beans for a pair of shoes or a donkey.