Buffett Doubts Euro Survival; Says System Is Flawed "...â17 countries in the world gave up the right to issue bonds in their own currency. That is 100 degrees away from being able to issue them in your own currency like the United States,â he said. âThe situation there is fundamentally different.â" http://www.cnbc.com/id/45382630 What is funny is, having being able to issue bonds would probably have put them in a far worse situation. At least, there is some hope they can turn things around since their debt, while big, isn't what it would be if they had borrowed even more! On the other hand, the Chinese would have had alternatives to our bonds, and we probably would have been forced to have more fiscal discipline. The situation is dire, but this is Monday Morning QB'ing.
The lift off the low of about 1183 is not to be taken as a good sign. It is in fact probable. The huge sell off will come sometime this week.
"..."We think the fiscal drag from just not having that stimulus is about 1.5%," he told me alluding to the $1.2 trillion in automatic spending cuts the stalemate triggers. "So if you're expecting 1% growth, and you get that 1.5% drag, the U.S. goes back into recession. We will now have fiscal drag coming out of the U.S. and Europe at a time when the global economy is struggling a bit to keep firing on all cylinders..."" http://www.cnbc.com/id/45402567 The whole notion of an "official" recession as two negative growth quarters is absurd to me, but it is what it is. By all imaginable measures the world is in recession NOW, with some countries facing depressions. US markets are no where near caught up with that notion.
"No Deficit Deal: US at Risk for Downgrade, Stock Correction" "...âFailure to reach agreement on at least the minimum required savings will reflect poorly on Congress and the S&P 500 could fall by 10 percent to 1100,â said David Kostin, Goldman Sachs equity strategist, in a note. âThe wide range of possible outcomes on both the super committee process and the unstable political economy in Europe drives our view that investors should assume the worst while hoping for the best.â..." I say it corrects 10% no matter what. The SC event (of no resolution) was already priced in. Are these guys kidding? How many times do you have to get slapped in the face to believe that government, or at least Congress, is in cemented stalemate? I tell you, these people either have short memories, or are eternal optimists.
I think its funny that Optimistic FV is now 100 handles below the actual index. So much for intraday trading with it.