Chris Lau - Seeking Alpha

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Wednesday, June 03, 2009

Market Unable to Sell-Off...

Below is a comment posted from a blog post on xtrends. This entry is in contrast to news media posts from, say, Reuters. Reuters consistently ends negative news posts with "this could be a sign that the economy is improving"/"it might be a sign the market has bottomed."

http://xtrends.blogspot.com/2009/05/inability-to-sell-off-triggered-quant.html#disqus_thread
I now see the bears getting bulled up...they are now even talking about a secular bull now...investor sentiment almost at 11/07 peak...this is all just the part of the process...sure we could run to 1000-1100 on SPX after a modest correction but that will be it!...we will not enter a new secular bull from here...in my eyes it is almost an impossibility.

Am I a permabear?...more yes than no...but if we dip to 750-820 on SPX will I be short?...no...prob favor being long at that point really...but there is a big difference between a IT bear/bull vs LT bear/bull...the ones that come late to this bear mkt rally will get killed...I can tell you from economic sense why I think we will make new lows within the next yr and perhaps Ill list some but another reason is this, if you search on the net you will see how the elites have planned most of this financial crisis...why is it that insiders from Bilderberg already knew about the runup in commodities and eventual collapse many many months before it happened...they told about the subprime collapse, credit crisis, stock mkt collpase yrs before it happened...wanna know what Geithner said this month at Bilderberg...if they should create a long lasting stagnation/depression or a quick violent depression creating a new system...this will take time...credit and debt is contracting and the dollar will run up soon enough...the mkt will collapse for round 2 when this happens...Atilla will ultimately be right about this one....the elites said they will bring this mkt down even further and eventually collapse our dollar...how else are they going to pay the asians and middle east back unless they pay back with devalued dollars?...so what the bulls will eventually find out the hard way is this, the govt and elites are not trying to bring our economy back, they want a new system where they can control it even further.

Mark my words, soon from now, the govt will talk this mkt down...at first it will be confusing because for the past 3 months they have been fudging the number and lying to us with their green shoot garbage but son from now, they will take the other side and may will be puzzled why they will do this unless you understand their final endgame.

But here are some triggers.


1. CRE will blow up any way you look at it...they were leveraged way more that RRE...many bought CRE with 1% down...many will need to refinance and wont be able to...banks arent stupid they will not lend using crazy criteria anymore...if you look at many CRE building selling right now, they are already off 30-50% from the top...that is reality.

2. so where will the money come from to fuel this new bull?...70% of GDP consumer spending...we get money from home equity lines(gone), credit cards(personal credit to contract 4T in next 2 yrs), jobs(losing 500-600K jobs per month, real unemployment 18% right now), stocks(dont need to say anythere about this one)....ok, so tell me, where will the money come from?.

3. corp and state pension obligations will blow up...CA is bankrupt...PERS plans will fess up they cannot pay soon...I can see the riots and protests from the teachers, firemen and cops already...corp's will soon fess up they cant pay either...you screw with someones money and they will react.

4. interest rates have to go up as the past month has shown...Feds said they were buying treasuries but rates rising instead of falling..people arent stupid...using debt to pay off debt is dumb...Feds printing money to give to the banks via govt is kinda dumb when you consider the private banks are the feds!...high rates will kill RE and borrowing...gas and food prices will rise while assets such as stocks and RE will remain supressed...a hyperinflationary depression is what I see.

5. we need to move away from paper pushing but this will take time...we have given away manufactoring over the past 2 decades...the middle class is being squeezed now...the good jobs are leaving or gone...but out of the 12T committed by the govt about 200B committed to infrastructure so all is well...when will people realize that 95% of the money going to bail out bankrupt institutions that need to go away...the weak must die and replaced by the smart and strong...you will not solve any probs until this tragedy is resolved...forget about Friedman, Keynes and etc...Minsky will ultimately be proven correct...but in the process of learning this, we and our children will pay.
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