Finacials Bubble

Discussion in 'Stocks' started by lowhangingfruit, May 8, 2009.

  1. At what level do the financials break down? 400% in in 8 weeks. Give me a break. Maybe I'm missing something. I have not heard of any positive news that would allow for such a run up.

    As far as the rest of the market is concerned, I don't even know why were at the current levels we are now. There has been no news or reports that say we are better off now than we were 6 months ago. In my line of work (construction in California) there are very few projects that are starting or in the works. The architects are working on far fewer new projects than normal. These jobs will not be ready for construction until the next years build cycle.

    In residential construction, the banks are happy to refinance your house for you, as long as you don't want to take money out. This does not bode well for people remodeling or making additions to their homes.

    As far as I'm concerned the rest of this year is going to suck for construction. Which leads to my final point. As construction goes, the economy goes.

    Best of luck
  2. ElCubano


    If only it would be that easy..that's all I'm going to say. :D
  3. My theory is Goldman Sachs, and others who've received government money, are driving up the financials by purchasing Dow and S&P futures contracts in the billions of dollars near resistance levels where protective stops are, causing buying flurries from short covering. They unload into the panicked short sellers and reload for the next round.

    The reason: Banks need to raise capital but congress has tightened their belt, so the banks will need to make secondary stock offerings to recapitalize. Driving up the share price at the expense of short sellers, and making the short sellers recapitalize the banks...a perfect evil plan.
  4. sumosam


    I totally agree with this....the more shorts, the more we stay in the uptrend. According to EWI, sentiment indicators are 82% bullish...we don't crash til we get into the 90's.....can see this taking at least another 2 weeks.....remember oil from last year?

    I finally I was down .... way down. Had I hung on, due to the parabolic move, I would have been nicely rewarded.

    This is typical of bear market rallies.....we were severely, severely oversold. And yes, GS is moving this market to some degree, but in an intermediate bull, one buys dips.
  5. 100% agree this is all a plan that was devised months ago to rocket the stocks so they could do 100's of billions of secondaries.when these crash it will be a amazing
  6. S2007S


    I'm thinking the same thing, that's the whole reason behind the rally in the financials, they actually waited an entire week to release the stress test which at that point financials rallied even hard helping them out with with secondaries, its all manipulation, mean while every believes the economy has done a complete 180 and is now in a "V" shaped recovery.
  7. "Increased interest rates as a liquidity drain method for the impact of quantitative easing is simply too stupid to believe.

    Interest rates as a monetary tool are "killed" by quantitative easing."

    quoted from Jim Sinclair's website.

    No Volcker to come to the rescue this time around.

    tighten your seatbelts.
  8. Your correct, the shorts are adding the fuel. Same thing happened in 2003 as the market pulled up off the matt and rallyed everyone thought oh great now I can short. This was after it fell from 11000 to 7500, rallyed up to 8000 and everyone wanted to short.

    Well the market kept pushing higher and higher as the shorts finaly gave up and went long in 2004 then the market moved sideways for a year.

    Sooner or later they will get burned enough and quit. Then will will trade sideways.