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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: GROUND ZERO™ who wrote (90241)	9/9/2009 5:26:34 AM
From: Real Man	Read Replies (2) \| Respond to of 94695

I do think so. I am concerned about the effect of putting the 600 Trillion OTC derivatives shadow banking system into light - err, real markets. This is kinda like a mine field, if things don't go smoothly, they will tend to blow up. Another thing that happens in October - December is ... the Fed will stop printing. So, in general, I would expect the markets to go up into January 2010 on that basis, but I'd be careful then. Overall, that is the biggest Ponzi scheme ever. It is a right step to bring it out of the shadow into real market, and it is the right step to do so when there are few signs of stress (derivatives are now overliquified). However, I would be far more comfortable if the size of that thing was much smaller. The government tries to disarm a mine field with 100 Megaton mines littered all over it. Yes, I am careful -g-

To: GROUND ZERO™ who wrote (90241)	9/9/2009 6:08:24 AM
From: Real Man	Read Replies (1) \| Respond to of 94695

The current financial system and the government/Wall Street connection caused the crisis. It must be reformed, and there must be pain after the necessary reforms are implemented. So far we have seen some reforms, and some significant pain, but I don't think it was sufficient to get out of the economic slump and start a new secular bull market, which I would define as a bull in real terms (the falling dollar is bearish!) We need a few more years, more reforms, more pain after reforms, etc. That does not mean we can't see a cyclical recovery now and stocks going higher, and we likely will, but it will be accompanied by a great deal of inflation, for now, and the real bottom of the secular bear that started in 2000 still lies ahead of us.