Minyanville offers 35 reasons why the March lows were an
excellent trading opportunity but not the ultimate bottom.
minyanville.com
1) Resistance at S&P 1405 and DJIA 12,800 (along with an
incessant pattern of lower highs across sector indices)
remains in place. While sideways action above support
is “basing,” similar action under resistance is “churning.”
2) Remember how many pundits called a bottom in tech all the
way down the slippery slope? Ultimate lows occur when people
stop trying to catch the cusp and sell positions as a function
of frustration.
3) Maltese dogs are still favored over Rottweilers by the
elite Park Avenue crowd.
4) Ben Bernanke continues to insist we’re not in a recession.
Admitting you have a problem is the first step toward solving
it.
5) Hank Paulson has yet to melt a reporter’s face with his
cold, hard stare.
6) The International Monetary Fund told us last week that this
is the worst financial crisis since the Great Depression.
7) Nobody held a benefit for the second-homeless yet.
8) We never saw true capitulation through the lens of denial,
migration and panic.
9) $500 trillion in derivatives tie the global machination
together, which is why the Bear Stearns' bankruptcy would have
led to “financial Armageddon.” Given the interdependency of
financial assets in our finance-based economy, how can we
intelligently assume that it was a “one-time event?”
10) Jimmy Cayne can still afford Twinkies and Skittles.
11) We just had the biggest non-farm payroll decline in five
years and the size of the unemployment rate increase, from
4.8% to 5.1%, never occurred in post-war history without the
economy being in the throes of a recession.
12) Homebuilders have yet to offer two-for-one deals.
13) Fannie Mae (FNM) and Freddie Mac (FRE) have yet to be
nationalized.
14) Franklin Raines is still collecting $1,000,000 year to
play golf.
15) The S&P declined 32% during the ten post-war recessions
and the latest lethargy only measured 19% from the October
highs to the March sighs.
16) While rallies typically begin when recessions are at their
midpoint, how can we assume that we’re in a shallow recession
given the magnitude of debt and the underpinnings of
derivatives?
17) Merrill Lynch (MER) employees have yet to tape Susan B.
Anthony coins to the windows of their corporate offices.
18) The financials historically bottom below book value. On
the March lows, the S&P 500 financials had a valuation of
about 1.3 times book.
19) Angelo Mozillo still has a tan.
20) During the 1989-1991 recession, approximately 25% of the
financial universe disappeared. The tally for this recession
is less than 7%.
21) You can tell someone you work in finance while attending a
cocktail party and they won’t grunt and walk away.
22) Few banks have incurred the kind of provisioning charges
that go along with a mild recession, let alone a full-blown
credit crisis.
23) Alan Greenspan is still getting paid to speak.
24) If the market can’t rally with a weaker dollar, what’s it
going to do when the greenback rallies?
25) Due to the liquidity injection by the Federal Reserve, the
largest firms are still growing and risk is being concentrated
into fewer and fewer hands.
26) Bernanke hasn't broken into tears on Capitol Hill during
congressional testimony.
27) ETF’s haven’t launched on Fool’s Gold or Cubic Zirconia.
28) President Bush hasn't held a press conference to declare
that we’ve won the war against foreclosures.
29) BusinessWeek hasn't predicted a Depression.
30) I gave my broker an order to buy the bottom and I’m still
waiting for a fill.
31) China hasn’t bought the Chrysler Building.
32) January was down more than 5% and only once in history has
that happened, when the low for the year occurred in the first
quarter.
33) The level of the debt in the system—even though the IMF
approximates close to $1 trillion will be written off by
financial institutions—is unsustainably high relative to the
declining economic activity.
34) Traders are buying upside calls like they’re going out of
style.
35) You’re still reading this! |
