Most every market strategist, prognosticator and biz-media reader has been saying how markets “have discounted the negatives” of the European situation and our weak economy.
What if it was the other way around? What if the markets have discounted some type of positive outcome from all this wrangling? What would the market do on the conclusion of the “deal”?
Knowing that many market averages have just sprinted 15-20% higher, “hoping” for a positive outcome, do you think it would be to “buy the news” or would it be the other way around?
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Very sobering thought…
Doug Kass
Have We Reached an Understanding?
12:55 p.m. EDT
Has the market discounted the negatives?
The one question that every bear should ask as we go into “the most important weekend” is this: Has the market discounted the negatives that appear to be relatively well understood?
another 10% above us if we get a euro deal
You don’t think that’s somewhere in the 12% run we’ve already had?
doubtful given where we are in the calendar…depends on the deal, however. Only a really solid “deal” would send us shooting higher. That is probably not all that likely.
who knows,could be a good diversion for bac, they go down, jp morgue picks up the depositor base,the rest fails from toxic waste, the taxpayer gets slammed again, and none sees it coming for monday open,because euro hasnt picked out what cumbabun they want to wear in the casket. cause once again sarko and merckel are still playing pick up sticks
Long bias. People wearing rose colored glasses rationalizing why the market should go higher.
You are right for playing devil’s advocate because there could be a swift and hard kick to the balls for many if and when something gets done in Europe.
I’m bearish, however I ‘should’ have gotten long as soon as the Euro Tarp rumors started at the beginning of Oct. You can always put a stop-loss order at the year’s lows, but what if we do pull out of this? I’ll have missed a big move.
UP FOREVER
With Doc copper in a downtrend and bonds screaming murder I feel you are correct sir.
One rumor after another is all Europe can do.
There is still a long way to go.
Rumors and announcements with no real action should continue. (IMHO)
But as long as areas of the european bond market continue to function. IE: rates go up and the bids come in as big money that needs to be allocated and “sovereign/government money” chase yield…
I don’t see any REAL action from governments and central planning authorities. Just more rumors and announcements.
This market is like one big game of chicken and everyone is waiting for the proverbial “blink”.
The whole situation reminds me of this Animal House quote. “Flounder. You fucked up! You trusted us!”
Paul the psychic octopus says we are in a sideways market for a loong time.
When Greece got it done ugly in late June, for some reason we bought the news. When we got it (the debt ceiling deal) done ugly, we sold the news with a vengeance (or maybe that was just the tippees front running the debt downgrade). This time, I think it really matters how they do the deal. I Don’t think a complete make-believe whitewash with lots of guarantees and totally circular “backing” will fly. Somehow, the ECB must accept the fact that devastating austerity measures across the Eurozone won’t work, and that there must be a combination, including a change enabling the ECB to be for the Euro what the Federal Reserve is for the dollar – they have to be able to print money.
Since I put the odds of them coming to that conclusion by Monday below fifty-fifty, the markets should be disappointed, but how Mr. Market then screws the greatest number is still subject to debate.
Nothing has changed. ‘They’ have no choice. Trillions more of Euros, Dollars and Yen are inevitable and will find their way into the markets.
Buy and Hold is back!
I don’t read your blog everyday, but I did happen upon your dismal outlook when the DJIA was 1,000 point lower than it was today. I just STARTED my short position today, which is how it works…you buy the bottom, and sell the top. Prechter doesn’t get it. Mauldin doesn’t get it. Every poster on every message board for every stock, doesn’t get it…and neither did you. I also started collecting dirt cheap solar stocks last week, waiting until that sector was oversold and left for dead. That’s what you do, I’m told, by guys like Buffett. If the market is 80% HFT and algorithms, who cares about the news of the day?