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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (79863)	3/11/2007 11:33:26 AM
From: Perspective	Read Replies (1) \| Respond to of 110194

<Whenever I read something like that I think the spoos will open the next day down 4%.> The problem is that in order for the market to actually go DOWN, somebody has to do something different than what they've been doing. It requires a change in behavior. Are the forces that have been buying going to stop buying? Is it going to stop the major source of cash flow right now - corporate buybacks? No. Is it going to prod any of the complacent public to actually question the wisdom of having their entire retirements tied up in stocks? Hell no, Wall Street - the "experts" - are still telling them that stocks are the only way to go for the "long haul". And the folks running that OPM don't give a rats ass - they don't care if they lose people's 401k's - they're just trying to match their benchmarks. I think the market has likely gone from a leading mechanism to more of a lagging mechanism as the source of buying has shifted from investors to price-insensitive flows from corporate buybacks and the games played by hedge funds. It may be that until after the economy has tanked enough to dry up corporate liquidity, or until hedge fund liquidity is finally reduced, that nothing really matters. Of course, the blowing up of subprime may produce the recession that finally hits corporate cash flow, and more directly, it may be sapping hedge fund liquidity. BC

To: orkrious who wrote (79863)	3/11/2007 1:48:18 PM
From: Tommaso	Respond to of 110194

At some point the market will drop so far that it will sink with good news instead of rising with bad news. The most distant horizon for most investors is the year 2000, when the tech/dot.com mania began to blow up. Most managers seem to imagine that the decline of 2000-2002 was a great bear market, from which we will continue to rise to ever higher plateaus. Aactually we are still in a 25-year bull market that has been repeatedly resuscitated by the Federal Reserve that has allowed floods of poorly-secured credit. Well, there I go mixing metaphors so it is time to stop writing.