Investment Outlook
Sell Stocks in May and Go Away
The old Wall Street saying “sell stocks in May and go away” may have more than the usual ring of truth to it this year.
The unleashing of massive liquidity into the world’s financial system, lead by the United States Federal Reserve Bank, has brought about a heady sense of euphoria among investors. The quarter of a basis point cut in the federal funds rate to 2% announced at 14:15 hours on Wednesday afternoon was enough to cause yet another celebration on Wall Street with the Dow advancing some 189.87 points to close at 13,010.00 on Thursday. This sizable rally occurred even though the Fed indicated that the aggressive round of interest rate easing was near an end.
1May2008 | taipan | 0 comments | Continued
New Bull Market Surge Underway?
One might wonder if a new bull market surge underway will be lasting as the stock market has put on quite a performance over recent trading sessions.
Friday’s trading sessions on the NYSE and the NASDAQ were attention getting amazing. CitiGroup reported a huge $13 billion write down for the first quarter and that it was cutting 9,000 jobs. That was taken as good news as it might be the last of the bad news and Citi’s stock surges. What optimists the current largely untested in a bear market group of money managers are.
19Apr2008 | taipan | 0 comments | Continued
Beware the Bear Market Ebb Tide
Investors would be wise to beware the Bear Market ebb tide that is currently just getting underway.
The old Wall Street saying that a rising tide lifts all boats is even more true in reverse. Once the tide starts flowing out it becomes a dangerous self reinforcing force.
Those investors who still think that the government and Federal Reserve Bank will still somehow save the economy from a severe recession are just not aware as to how severe and dangerous the challenges overhanging this market are. They also underestimate the speed at which unpleasant events unfold to the downside. Many years of price appreciation can be wiped out within just a few months.
27Mar2008 | taipan | 0 comments | Continued
Financial Stocks to Remain Under Pressure in 2008
Look for current rally to fizzle and for financial stocks to remain under pressure in 2008.
While the perhaps heroic, certainly desperate actions of Ben Bernanke and the Federal Reserve bank have brought some relief to the Wall Street investment banks, commercial banks, and mortgage companies look for the relief to be very short lived.
In my opinion, the problems with the world’s financial system, with the United States in the lead position, are just far greater than the solutions. In the end we will be lucky to avoid a financial meltdown.
The desperate nature of the Fed’s recent actions should give us an idea as how close to the financial abyss we truly are. Exchanging government treasuries for toxic waste mostly worthless subprime mortgage and CDO paper and the like seems to be a bad exchange to me.
24Mar2008 | taipan | 0 comments | Continued
Return of the Mean Market Mr Bear
The return of the mean market Mr Bear is certainly exciting but I expect for most investors and traders the excitement will be mixed with a lot of pain.
After cheering up investors yesterday the return of the mean market Mr Bear didn’t take very long. Only one day after making a 420 point one day gain on the Dow averages, the best one day moon shot in over five years, the market gave back about 70% of the gain, closing down about 293 points on the day.
What can you say about such market volatility?
19Mar2008 | taipan | 0 comments | Continued
US Dollar Panic Selling Underway
For those of you who have been long US dollars this year it must seem like US dollar panic selling is not only underway but has been around for awhile. But now I’m talking about the rout in the dollar going hyperbolic. That’s quite a difference from merely being in a long term downtrend.
The dollar’s quick move to below 100 Yen and to the north side of 158 against the Euro has been painful for dollar bulls and for many others, like oil exporters, who price their products in dollars.
However, the move has not quite gone hyperbolic into a full scale panic - yet. With the moves that the US Federal Reserve Bank has been making we are probably very close to a complete collapse of the dollar which will bring on the hyperbolic stage.
19Mar2008 | taipan | 0 comments | Continued
Hello Eugene,
Thanks for taking the time to read the post and for your comment.
Sadly, most Americans are still in a ...
Quite right,too.
When confronted by such experts I immediately ask why, if they're so clever, they're working ...
A very interesting and informative post, Taipan, even if depressing.
I'm certain I don't fully understand all the intricaties of ...
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