Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (43888)	1/5/2006 7:19:51 AM
From: Chispas	Read Replies (5) \| Respond to of 116555

Fiend Commentary - CRB Reaches All Time High The old closing high was set back in November 1980. You would think that this would be a reasonably significant event but of course it doesn't mesh with the popular delusion that there are no inflationary pressures. Of course gold also closed near its highest level since 1980 and has doubled coinciding with the Fed's ongoing liquidity blitz starting prior to the phantom Y2K crisis. I'm sure future economists will wonder how it could be commonly believed that inflation and over consumption would not be the result of billions upon billions of dollars floating around the world. Momentum for the Dow continues to build although Wednesday's rally was more subdued. The index traded flat but had a late burst to push it back near 10,900. Volume on the NYSE was heavy again with another day of solid breadth. Bonds rallied modestly but perhaps ominously the dollar continued to slide even among all the optimism from the Fed and Wall Street. Speaking of optimism, it has apparently exploded at the start of the new year. Market analysts are almost universally looking for higher stock prices for 2006. Of course when has the consensus been bearish before the start of a new year. It would seem that analysts are even more bullish than they were before the start of 2005. Let's run down a quick list of forecasts that popped up in front of me: Jim Cramer -- bullish? No surprise. I didn't get an exact forecast but he recommends 85% of your portfolio to go towards stocks with 10% in bonds and just 5% cash. Elaine Garzarelli -- I haven't heard from her in years. She unwisely forecasted that the Dow would close at 12,400 at the end of 2005. Now for 2006 she is looking for Dow 14,150 and the S&P 500 to hit 1,635. The following group comes from a USA Today article: Ed Keon -- from Prudential is looking for the S&P 500 to break its old record and close at 1530. A 22.6% gain for the year. Tobias Levkovich -- from Citibank is looking for gains because he feels that "sentiment is negative." Huh? Looking for the S&P 500 to finish above 1,400. Henry McVey -- from J.P. Morgan was bearish in 2004 and 2005 but has apparently capitulated for 2006 and is now looking for gains. Also looking for S&P 500 of 1,400. Stuart Freeman -- wants folks to boost stock exposure because earnings and valuations will expand. Hmmm...even as the economy is slowing and inflation is picking up? S&P 500 of 1,400. Abby Joseph Cohen -- Grandma Bull is back and it is no surprise that she is bullish and looking for the S&P 500 to finish in the 1,400s. Liz Ann Sonders -- Only looking for modest gains for the year but is long term bullish. Hugh Johnson -- usually one of the more vociferous Bulls but now he is only looking for modest gains. Ah jeez, Chip Dickson, Tom McManus, and Mike Ryan--all bullish but only looking for single digit gains. Richard Bernstein -- not really bullish or bearish. He is looking for another flat year. Now for the Bears: Abhijit Chakrabortti -- Looking for an S&P 500 of 1,125. Wow, just one bear in a group eleven. With a high level of optimism to start the year in the face of numerous uncertainties, it isn't difficult for me to remain bearish for yet another year. I still firmly believe that we have not yet seen the worst of the bear market. Folks are nuts if they think that it will be back to the glory days of the 80s and 90s after just a few years of losses. It has never worked that way throughout history. Periods of exuberance are always followed by periods of despair. With the extreme excesses seen in the last decade I expect an equivalent amount of despair. Oh, a quick note. Bear Stearns & Co. jumped on the Google bandwagon with a $550 price target. Ok, now we just have to wait for a $700 price target. With all this craziness going on it is making me more bearish than I have been in a few years. The sentiment just reeks of major long term top. fiendbear.com